How have the investor magazine hotspots fared two years on?
Two years ago Property Observer reported that out of the collective number of '100 best suburb to buy' housing hotspots named by investment magazines Your Investment Property and Australian Property Investor, only 21 featured in both magazines' lists. We also have a look at how the magazines fared in picking their hotsptos for units.
Analysis of the performance of detached houses in these 21 hotspots reveals that very few are returning anything meaningful to investors while some have seen their median values fall sharply.
There are just four locations that have delivered returns in excess of inflation (around 5% over the past two years).
Property Observer looked at the movement in medians of both RP Data and Australian Property Monitors (APM), just to also see how the two major data providers differed on the same location.
Three of them – Townsville, Gladstone and Chinchilla - are in Queensland and have strong ties to the mining sector.
The fourth is the regional city of Bathurst, around 160 kilometres from Sydney in the NSW Central Tablelands, picked for its affordability and high yields, with RP Data recording a 9.8% rise in median values and APM a 5.2% increase.
Among the worst performers over the past two years have been Melbourne locations including Broadmeadows, St Kilda and Balaclava along with Paddington in Brisbane and Kensington in Adelaide.
Most astute property investors would take a long term view on their investments – indeed some of these non-performers may turn around in the coming years.
However, many investors would expect to see signs of capital growth in so-called hotspots over a two-year period and certainly not the declines recorded in some locations as the tables below show:
The figures below are sourced from the 2011 and 2013 hot 100 and top 100 editions of Australian Property Investor magazine and Your Investment Property respectively:Suburbs in bold have achieved capital growth in excess of 5% over the the past two years according to both RP Data and APM:
RP Data figures
| Suburb | State | Median house price 2011 | Median house price 2013 | % change over two years | Hit or miss? |
1. | Ainslie | ACT | $711,000 | $687,000 | -3.3% | MISS |
2. | Townsville | Qld | $369,000 | $555,000 | +50.4% | HIT |
3. | Gladstone | Qld | $439,000 | $595,000 | +35.5% | HIT |
4. | Rockhampton | Qld | $192,000 | $201,000 | +4.6% | HIT |
5. | Toowoomba | Qld | $270,000 | $270,000 | 0% | MISS |
6. | Chinchilla | Qld | $325,000 | $370,000 | +13.8% | HIT |
7. | Paddington | Qld | $788,000 | $745,000 | -5.4% | MISS |
8. | NSW | $852,000 | $850,000 | 0% | MISS | |
9. | Tempe | NSW | $713,000 | $700,000 | -1.8% | MISS |
10. | Baulkham Hills | NSW | $621,000 | $645,000 | +3.8% | HIT |
11. | Bathurst | NSW | $273,000 | $300,000 | +9.8% | HIT |
12. | Port Macquarie | NSW | $400,000 | $395,000 | -1.24% | MISS |
13. | Geraldton | WA | $360,000 | $375,000 | +4.1% | HIT |
14. | Broadmeadows | Vic | $380,000 | $315,000 | -17.1% | MISS |
15. | Thornbury | Vic | $718,000 | $700,000 | -2.5% | MISS |
16. | Warrnambool | Vic | $317,000 | $313,000 | -1.2% | MISS |
17. | Vic | $860,000 | $707,000 | -17.7% | MISS | |
18. | Brunswick | Vic | $689,000 | $640,000 | -7.1% | MISS |
19. | Balaclava | Vic | $916,000 | $715,000 | -21.9% | MISS |
20. | Port Noarlunga | SA | $365,000 | $353,000 | -3.2% | MISS |
21. | Kensington | SA | $650,000 | $595,000 | -8.4% | MISS |
Source: Australian Property Investor magazine, Your Investment Property magazine, RP Data
APM figures
| Suburb | State | Median house price 2011 | Median house price 2013 | % change over two years | Hit or miss? |
1. | Ainslie | ACT | $688,000 | $682,000 | -0.8% | MISS |
2. | Townsville | Qld | $395,000 | $439,000 | +10.2% | HIT |
3. | Gladstone | Qld | $398,000 | $480,000 | 20.6% | HIT |
4. | Rockhampton | Qld | $205,000 | $196,000 | -4.3% | MISS |
5. | Toowoomba | Qld | $271,000 | $275,000 | -1.4% | MISS |
6. | Chinchilla | Qld | $277,000 | $377,000 | 36% | HIT |
7. | Paddington | Qld | $754,000 | $718,000 | -4.7% | MISS |
8. | NSW | $820,000 | $850,000 | +3.65% | HIT | |
9. | Tempe | NSW | $710,000 | $714,000 | +0.5% | MISS |
10. | Baulkham Hills | NSW | $606,000 | $630,000 | +3.9% | HIT |
11. | Bathurst | NSW | $285,000 | $300,000 | +5.2% | HIT |
12. | Port Macquarie | NSW | $392,000 | $380,000 | -2% | MISS |
13. | Geraldton | WA | $372,000 | $380,000 | +2.1% | MISS |
14. | Broadmeadows | Vic | $386,000 | $320,000 | -20.6% | MISS |
15. | Thornbury | Vic | $713,000 | $674,000 | -5.4% | MISS |
16. | Warrnambool | Vic | $310,000 | $304,000 | -1.9% | MISS |
17. | Vic | $822,000 | $652,000 | -20.6% | MISS | |
18. | Brunswick | Vic | $686,000 | $625,000 | -8.8% | MISS |
19. | Balaclava | Vic | $868,000 | $715,000 | -17.6% | MISS |
20. | Port Noarlunga | SA | $366,000 | $360,000 | -1.6% | MISS |
21. | Kensington | SA | $530,000 | $570,000 | +7.5% | HIT |
Source: Australian Property Investor magazine, Your Investment Property magazine, Australian Property Monitors