John Edwards' 10 house and unit suburbs expected to outperform for the next five years
New research released this morning from Residex, the research arm for Onthehouse, has listed 10 suburbs for expected house growth and a further 10 for unit growth that they believe will perform over the next five years.
Property market growth, overall, is expected to be steady over 2014, however some areas, particularly those in the inner ring, will potentially prove lucrative.
The findings show promising areas in every capital city's inner ring for investors.
John Edwards, founder of Residex, said that the findings show promising areas in every capital city's inner ring for investors.
“We are expecting to see Sydney and Melbourne’s growth rates slowdown in the next six months and in other national markets next year. Although inner ring areas often fall into the least affordable class compared to their suburban neighbours, the data indicates there are still opportunities for savvy investors, in the right suburbs," he said.
“From a national perspective, I’m expecting to see commentary from the RBA later this year that will affect consumer sentiment and again moderate growth. This will mean changes in the recent strong national growth trends. Property investors will need to be cautious about which suburbs they invest in – particularly in inner city areas, which will deliver a very mixed range of returns."
He also noted that stable growth "never occurs in a linear way", with a fall expected to be seen in growth numbers by the end of the year, with two to three years of minimal to zero growth. By 2018, strong growth is expected to re-emerge, along with the results of the suburbs below to 2019.
Overall, units are predicted to bring in lower returns than houses should. Inner ring suburbs will bring an average of 4% to 8% over the next five years, with Melbourne dominating the top five.
“Melbourne is defying past predictions. My feeling is that there is an oversupply of property, especially units, but demand is currently being propped up by three main factors: property developers are managing their units well; international buyers are supporting new unit sales; and higher public confidence is being driven by factors like good clearance rates at auction," Edwards said.
“Anybody buying property over the next 12 months needs to be aware of the growth patterns, now more than ever it is important to do solid research around the market to back up your decisions with data and insight.”
See over page for the top predicted growth suburbs
Source: Residex/Onthehouse
What are your thoughts on these suburbs' growth potential?