Should you buy a New South Wales cheapie? 22 suburbs under $200,000
If there’s one thing every property investor should know it’s that cheap does not always equal good value; properties and areas are often cheap for a reason.
Previously, we looked at the 40 cheapest property markets across the country, according to RP Data. We warned that median prices in themselves are of limited usefulness. Be sure to understand how this figure is put together before reading median price lists like that in this article. Data like this can be very useful to those who know what they’re looking at. But if you misunderstand what the data is saying, then you can come to some very ill informed conclusions.
A quick gaze over this list proves that some areas may be worth further exploration – offering high rental yields along with their low entry points. However, as Property Observer has regularly explored in the past with cheapie suburbs and double digit yield promises, these on-paper figures do not always stack up in real life.
Some areas also appear to be recording strong dips in their median house prices. This may suggest the areas are in decline, but it may also suggest that the recorded median price is actually lower than the price you will need to put down to secure what you are after in the suburb.
Of the 22 New South Wales suburbs with a sub-$200,000 median price, according to RP Data, over the past three months 17 recorded a decline, no change or an “N/A” result.
A proportion of these areas have limited numbers of sales that their statistics are based on, which is why we have included that figure in brackets after each one. That can mean their prices are quickly skewed due to a few cheaper properties selling.
Six on the list, or more than 25%, recorded fewer than 25 sales, while half of the list (including these areas) recorded fewer than 50 sales. This may call into doubt the veracity of the statistics, or at the very least mean you need to look a little closer.
Our cheapest on the list is Coonamble, with a median price of $112,000. Taking this area on its own sheds some interesting light on why you can’t buy blindly on selected statistics. Situated 575 kilometres north-west of Sydney, the area had fewer than 3,000 people as of the 2011 Census.
An 860 square metre block of land in the area is currently available for $11,000, “following a fire which raged through the weatherboard home on this block.” It is within a “couple of minutes walk to the main street.”
However, Coonamble Mayor and local business owner Allen Karanouh believes there is strength for investors and home buyers in the area. He recently starred in a video series with Ray White Coonamble’s Don Schieb that has been advertised as a listing, sharing the opportunities for those wanting to do a change to a rural lifestyle.
“It has been one of the best performing towns in Australia, for instance in real estate in maintaining a very steady increase in prices, great return on investment and we don’t see many shops closing down,” says Karanouh.
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Schieb explains in the series that investors can buy a house for $60,000 or $70,000 and get $7,000 a year for it in rent – around a 10% return.
“Most of the investors are from Sydney. They look at properties on the internet and quite a number of these places have been sold without inspection,” he says.
He does mention there has been some pain for the region with an abattoir shut in 2001, losing 40 jobs. However, there have been renovations and it’s expected to open again this year.
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Each of these areas is substantially different from the next.
Picture of Coonamble main street courtesy of C. Goodwin/CC BY-SA 3.0.
See over page for the full list of areas. Please click below.
Click on the suburb name to go a more in-depth suburb data page.
$187,000
Three month growth: -10.10%
12 month growth: 3.89%
Average annual growth: 6.99%
Gross rental yield: 5.56%
(Based on 17 sold)
$122,000
Three month growth: -0.71%
12 month growth: -24.46%
Average annual growth: 5.27%
Gross rental yield: 7.46%
(Based on 29 sold)
$147,000
Three month growth: -18.19%
12 month growth: -1.83%
Average annual growth: 11.43%
Gross rental yield: 6.09%
(Based on 12 sold)
$119,000
Three month growth: -0.83%
12 month growth: 0.00%
Average annual growth: 8.87%
Gross rental yield: 9.94%
(Based on 316 sold)
$112,000
Three month growth: 0.00%
12 month growth: -2.61%
Average annual growth: 6.22%
Gross rental yield: 9.29%
(Based on 72 sold)
$185,000
Three month growth: 2.21%
12 month growth: -1.33%
Average annual growth: 2.05%
Gross rental yield: 6.46%
(Based on 209 sold)
$160,000
Three month growth: N/A
12 month growth: 18.52%
Average annual growth: 3.40%
Gross rental yield: 7.15%
(Based on 30 sold)
$175,000
Three month growth: 0.00%
12 month growth: 0.14%
Average annual growth: 3.01%
Gross rental yield: 6.54%
(Based on 151 sold)
$132,000
Three month growth: -10.68%
12 month growth: -6.56%
Average annual growth: 4.31%
Gross rental yield: 7.50%
(Based on 63 sold)
$178,000
Three month growth: -4.05%
12 month growth: -4.05%
Average annual growth: 5.48%
Gross rental yield: 6.74%
(Based on 101 sold)
$190,000
Three month growth: -3.80%
12 month growth: 5.56%
Average annual growth: 3.31%
Gross rental yield: 5.47%
(Based on 14 sold)
$149,000
Three month growth: 16.02%
12 month growth: N/A
Average annual growth: 7.11%
Gross rental yield: 5.78%
(Based on 68 sold)
$130,000
Three month growth: -7.14%
12 month growth: -15.58%
Average annual growth: 4.24%
Gross rental yield: 8.00%
(Based on 24 sold)
$154,000
Three month growth: -4.04%
12 month growth: 4.58%
Average annual growth: 6.47%
Gross rental yield: 6.74%
(Based on 33 sold)
$153,000
Three month growth: N/A
12 month growth: N/A
Average annual growth: N/A
Gross rental yield: 8.52%
(Based on 10 sold)
$130,000
Three month growth: -7.14%
12 month growth: -16.38%
Average annual growth: 1.66%
Gross rental yield: 7.30%
(Based on 17 sold)
$195,000
Three month growth: 11.43%
12 month growth: 21.88%
Average annual growth: 7.46%
Gross rental yield: 7.47%
(Based on 68 sold)
$180,000
Three month growth: -18.18%
12 month growth: -18.18%
Average annual growth: 8.43%
Gross rental yield: 7.80%
(Based on 30 sold)
$195,000
Three month growth: -2.99%
12 month growth: -4.88%
Average annual growth: 2.85%
Gross rental yield: 7.07%
(Based on 130 sold)
$171,000
Three month growth: 1.49%
12 month growth: -7.84%
Average annual growth: 6.51%
Gross rental yield: 5.72%
(Based on 33 sold)
$120,000
Three month growth: -7.69%
12 month growth: -11.11%
Average annual growth: 3.36%
Gross rental yield: 8.67%
(Based on 100 sold)
$130,000
Three month growth: -6.47%
12 month growth: -1.89%
Average annual growth: 7.26%
Gross rental yield: 8.00%
(Based on 112 sold)