Investor magazines' 2011 unit hotspots are more misses than hits two years on
The Queensland mining towns of Gladstone, Toowoomba and Chinchilla account for three of the five locations that have delivered median unit growth above inflation (around 5% over two years) when measured by both RP Data and Australian Property Monitors (APM) – the two information providers used by Your Investment Property and Australian Property Investor in compiling their Top 100 lists.
In line with Property Observer’s analysis earlier this week of the 21 collective detached housing hotspots which appeared in both magazines 100 'best buy' suburbs of two year's ago, analysis of collective unit hotspots also reveal that very few have delivered any meaningful growth to date.
The other two are Paddington, the trendy inner Brisbane suburb and Baulkham Hills, about 31 kilometres north west of the Sydney CBD and part of the Greater Western Sydney growth corridor.
Property Observer looked at the movement in medians of both RP Data and Australian Property Monitors (APM) to also see how the two major data providers differed on the same location.
Similar analysis found just four hotspot markets where house prices had delivered inflation-beating returns to investors over the same period.
Averaging out results across both lists, Gladstone is the standout with 27% price growth between 2011 and 2013.
Two points are worth mentioning:
Firstly, that most astute property investors would take a long term view of 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.
Secondly, astute investors would also be aware that investing in a suburb showing strong capital growth does not necessarily mean your investment property will perform in line with the overall suburb.
You could pick a turkey investment among a so-called ‘hotspots’. Equally, you could make an astute selection in a suburb that has not performed well.
It comes down to the exact street location (even sometimes what side of the street your property sits), the type of property you choose, what you pay for it, whether it appeals to tenants, the cost of maintenance and many other factors.
Hotspot guides can be good starting points if you're looking for a suitable investment, but always take the recommendations with a grain of salt and due your own research and due diligence.
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:
RP Data figures
| Suburb | State | Median unit price 2011 | Median unit price 2013 | % change over two years | Hit or miss? |
1. | Ainslie | ACT | $680,000 | $728,000 | 7% | HIT |
2. | Townsville | Qld | $473,000 | $399,000 | -15.6% | MISS |
3. | Gladstone | Qld | $388,000 | $475,000 | +22.4% | HIT |
4. | Rockhampton | Qld | $389,000 | $325,000 | -16.4% | MISS |
5. | Toowoomba | Qld | $217,000 | $345,000 | +58.9% | HIT |
6. | Chinchilla | Qld | $293,000 | $310,000 | +5.8% | HIT |
7. | Paddington | Qld | $433,000 | $492,000 | +13.6% | HIT |
8. | NSW | $475,000 | $485,000 | +2.1% | MISS | |
9. | Baulkham Hills | NSW | $479,000 | $520,000 | +8.5% | HIT |
10 | Bathurst | NSW | $212,000 | $227,000 | +7% | HIT |
11. | Port Macquarie | NSW | $290,000 | $265,000 | -8.6% | MISS |
12. | Geraldton | WA | $265,000 | $212,000 | -20% | MISS |
13. | Broadmeadows | Vic | $334,000 | $265,000 | -20.6% | MISS |
14. | Thornbury | Vic | $385,000 | $377,000 | -2% | MISS |
15. | Warrnambool | Vic | $260,000 | $242,000 | -6.9% | MISS |
16. | St Kilda | Vic | $476,000 | $440,000 | -7.5% | MISS |
17. | Brunswick | Vic | $420,000 | $416,000 | -0.9% | MISS |
18. | Balaclava | Vic | $453,000 | $466,000 | +2.8% | MISS |
19. | Port Noarlunga | SA | $219,000 | $260,000 | +18.7% | HIT |
20. | Kensington | SA | $363,000 | $404,000 | +11.2% | HIT |
Source: Australian Property Investor magazine, Your Investment Property magazine, RP Data
APM figures
| Suburb | State | Median unit price 2011 | Median unit price 2013 | % change over two years | Hit or miss? |
1. | Ainslie | ACT | $690,000 | $715,000 | +3.6% | MISS |
2. | Townsville | Qld | $443,000 | $393,000 | -11.2% | MISS |
3. | Gladstone | Qld | $319,000 | $475,000 | +32.8% | HIT |
4. | Rockhampton | Qld | $330,000 | ?? | ?? | ?? |
5. | Toowoomba | Qld | $281,000 | $301,000 | +7.1% | HIT |
6. | Chinchilla | Qld | $295,000 | $385,000 | +30.5% | HIT |
7. | Paddington | Qld | $399,000 | $460,000 | +15.2% | HIT |
8. | NSW | $478,000 | $492,000 | +2.9% | MISS | |
9. | Baulkham Hills | NSW | $443,000 | $510,000 | +15.1% | HIT |
10. | Bathurst | NSW | $216,000 | $220,000 | +1.8% | MISS |
11. | Port Macquarie | NSW | $295,000 | $265,000 | -10.1% | MISS |
12. | Geraldton | WA | $290,000 | n/a | ?? | ?? |
13. | Broadmeadows | Vic | $337,000 | n/a | ?? | ?? |
14. | Thornbury | Vic | $383,000 | $370,0000 | -3.3% | MISS |
15. | Warrnambool | Vic | $232,000 | $230,000 | -0.9% | MISS |
16. | St Kilda | Vic | $480,000 | $447,000 | -6.8% | MISS |
17. | Brunswick | Vic | $415,000 | $435,000 | +4.8% | MISS |
18. | Balaclava | Vic | $455,000 | $450,000 | -1% | MISS |
19. | Port Noarlunga | SA | $220,000 | n/a | ?? | ?? |
20. | Kensington | SA | $411,000 | n/a | ?? | ?? |
Source: Australian Property Investor magazine, Your Investment Property magazine, Australian Property Monitors
