Why so cheap? The four suburbs with median unit prices sub $100,000

RP Data’s statistics revealed four suburbs across Australia where the median price was listed under $100,000. 

Property Observer couldn’t help but ask “Why are they so cheap?”

Digging a little deeper, we decided to discover just why these median recording prices were so suppressed.

Of course, small regional areas – as these tend to be – are usually more volatile in their medians due to the infrequency of transactions, particularly when looking at units. Some of these areas have very few apartment blocks. Investors are always urged to understand what the median price is, and how it is affected by the type of properties that transact over a period. Here are four things to know about the figure before relying on it.

Some areas will be cheap due to their location - far from any employment hubs - while others will have a different makeup that ensures their prices are recorded low. There's a reason that you're unlikely to have heard of some of these four areas - they're not all bustling hubs that property investors are used to looking at. However, this doesn't mean they don't have their opportunities - while re-sale may be a tricky situation and something to consider, the yield figures are strong on paper and at least one listing seems to suggest that rental returns may be attractive.

• Gin Gin, Queensland: $41,000

The tiny rural township Gin Gin, about 48 kilometres inland from Bundaberg, is the cheapest across the country when looking at the area’s median price for units, according to RP Data.

Houses in the area were recorded at $216,000.

Current listings suggest that it may have been a month of cheaper sales for Gin Gin, with apartments on the market for around the $200,000 mark. The cheapest offerings are blocks of land from $33,500 – including some in an eco-park.

According to the 2011 Census, the suburb of Gin Gin had just 157 people, while the state significant area had around 5,000.

It seems that infrequent sales are skewing the median - with just seven recorded by RP Data to calculate their most recent median.

• Mission Beach, Queensland: $69,000

Tourist township Mission beach in the Cassowary Coast Region is the lowest priced beachside apartment currently listed at $150,000.

The median house price is set at $342,000.

Property Observer did find a number of $60,000 sales on Sandy Close and Iluka Close for blocks of land that had been tagged as units over June and July that may have skewed the median. There was also a $50,000 sale on Sandpiper Close. These appear to be part of Oasis Mission Beach – Iluka Close was part of Stage Two.

Again, just five sales were recorded for Mission Beach units. It appears that this figure is highly unusual, and not indicative of what you'd be paying for a unit - with a gross rental yield statistic at 25.34% and rent at $335 per week (which aligns with what is currently seen in rental listings), it was a struggle to find a unit under $100,000 that would return this figure.

As a state suburb, the 2011 Census recorded just 765 people in residence

• Risdon Park South, South Australia: $84,000

It appears that sub-$100,000 options are certainly on the cards for those looking to buy in Risdon Park South’s surrounding suburbs in Port Pirie.

At present no listings for the immediate Risdon Park South area were found. Current listings include an $89,900 “maisonette home” or three-bedroom, one-bathroom unit in Port Pirie. However, it is under offer at the moment.

Meanwhile, also in Port Pirie, a one-bedroom, one-bathroom offering for $99,000, which markets itself to investors or retirees, is available.

Port Pirie is the larger township, and as of the 2011 Census Risdon Park South was home to 1,975 people.

It seems a number of duplexes, including one on Hutchinson Street for $75,000 and one on Plenty Street for $80,000, may be keeping the median price down. One property listed in the area, for $85,500, is a solid brick maisonette offering.

In total, 12 unit sales were noted by RP Data. They recorded the median house price at $275,000.

• Hamilton, Victoria: $85,000

Currently, in Hamilton, there is one listing under $100,000 – a one bedroom, one bathroom flat asking for $95,000 on Moore Street, currently rented at $120 per week. Two-bedroom units span from $122,000 upwards.

Hamilton’s median house price sits at $197,000.

Located 300 kilometres west of Melbourne, or a three to four hour drive, it’s best known as a sheep grazing and agricultural area, however as a state suburb is recorded as housing 10,104 people in the 2011 Census data.

Just 12 unit sales were recorded. Suggesting a 13.46% gross rental yield, on $220 weekly median advertised rent for units, it appears that while in reality the yield may still be strong - you'd be looking for closer to the $200,000 bracket in a purchase to achieve the $220 rent.

Keen for more data? You can peruse our free suburb data here.