Australias Properties Under 400K

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    Australia's 40 hottest suburbs under 400k

    October 26, 2011, 12:38 pm By Vanessa de Groot Yahoo!7

    Now is the prime time to buy, but where should capital city investors looking to get in low behunting for property?

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    With experts claiming that now is the prime time to buy, but where should capital cityinvestors be hunting for property? To help you narrow down your search, Australian PropertyInvestor Magazine reveals 40 metro suburbs under 400k set to outperform.

    There are still many areas in Australia's capital cities that are undervalued and the currentmarket conditions are adding to the opportunity for investors to make long-term gains inthese areas, with prices having softened. (More From Yahoo!7 Finance:Australia's HottestSuburbs Under 500k)

    The 40 hot suburbs API has listed might be more affordable for property because they'vesuffered a stigma in the past, or perhaps just been overlooked because other suburbs weremore attractive, but that doesn't mean they don't have the potential to grow. Quite theopposite, in fact! We all know that many ugly duckling suburbs out there have turned intoreal estate swans, even if once upon a time it was hard to foresee.

    Before buying though, all investors must do their own independent research into an area todetermine if it's right for their investment goals. And be selective of where you buy in eacharea there are parts of some suburbs that are expected to perform better than others, socaution needs to be exercised in order to maximise the growth potential.

    South Australia's capital city Adelaide dominates this affordable metro hotspots list, with 15inclusions, while Perth, Hobart and Brisbane also have a good showing. All the capital citieswere represented by at least one suburb. (More From Yahoo!7 Finance:Buying vs Renting Which Will Make You Richer?)

    Please note, all data has been provided by RP Data. For houses the search radius was within11 kilometres of capital cities (narrowed to five kilometres for Darwin, Canberra andHobart), while for units the search radius was within five kilometres of each capital city. Thehousing type that each suburb was picked for is noted below.

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    SNR = statistically not reliable. Demographic data is current as per the Australian Bureau ofStatistics 2006 Census. (More From Yahoo!7 Finance: Which Aus City Is A Playground ForThe Rich?)

    JUMP TO YOUR STATE:

    NEW SOUTH WALES

    VICTORIA

    QUEENSLAND

    WESTERN AUSTRALIA

    SOUTH AUSTRALIA

    TASMANIA

    ACT

    NORTHERN TERRITORY

    NEW SOUTH WALES

    Potts Point, NSW

    Distance from Sydney GPO: 1 kilometre

    Property type: UnitMedian unit price: $390,000

    Weekly median advertised rent: $415

    Gross rental yield: 5.5%

    Population: 6878

    Proportion of rented properties in the suburb: 44.2%

    Proportion of units: 90.2%

    Situated on the Sydney Harbour waterfront, Potts Point is just east of the Sydney CBD.

    The suburb was included in the St George/RP Data National Property Hotspots Report 2011released earlier this year.

    Compared to surrounding suburbs Potts Point represents "extremely good value", accordingto the report, and it's one of the most affordable suburbs within five kilometres of Sydney'sCBD, if not the most affordable, with one of the strongest indicative gross rental yields.

    As well as being affordable, close to the city and close to a large variety of amenity, aboveaverage population growth in Potts Point suggests potential supply issues may place upward

    pressures on prices and the area may see further densification take place.

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    While RP Data is confident in Potts Point's potential for growth, Patrick Bright of EPSProperty Search warns investors to look at what they're buying. He says Potts Point unitshave a low median price compared to the rest of Sydney because it has a lot of one-bed andstudio apartments; property types he believes are not good performers when it comes tocapital growth and aren't easy to finance.

    View Property For Sale In Potts Point

    VICTORIA

    Flemington, VIC

    Distance from Melbourne GPO: 5 kilometres

    Property type: Unit

    Median unit price: $385,000

    Weekly median advertised rent: $290

    Gross rental yield: 3.9%

    Population: 7376

    Proportion of rented properties in the suburb: 53.8%

    Proportion of units: 54.4%

    It's where the Melbourne Cup is held every year, but Flemington has other drivers that couldsee its residential property market race ahead. It used to be home to heavy industry, but inrecent years gentrification has transformed it into a sought-after spot.

    There's good public transport in Flemington, with buses, trams and trains, and there's alsoplenty of amenity with shops, restaurants, cafes, bars and clubs.

    Michael Yardney, director of Metropole Property Investment Strategists, describesFlemington as a "good suburb close to the CBD". He says apartments in the suburb makegood investments, but warns that one must be selective. Some pockets have social issues andare crammed with public housing, particularly in the form of high-rises.

    "Choose an apartment in a block in one of the leafy streets and one surrounded by houseswhere there'll be lots of owner-occupiers rather than the patches of the suburb that are

    dominated by apartments."Carlton, VIC

    Distance from Melbourne GPO: 2 kilometres

    Property type: Unit

    Median unit price: $275,000

    Weekly median advertised rent: $390

    Gross rental yield: 7.4%

    Population: 12,050

    Proportion of rented properties in the suburb: 68.5%

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    Proportion of units: 78.1%

    There's no doubting that Carlton offers culinary bliss with its famous Lygon Streetrestaurants, but when it comes to property there are two trains of thought and Carlton'sinclusion on this hotspots list will be somewhat controversial.

    Some property professionals warn against investing in the suburb for reasons including thatit's had low average capital growth in the past and there's a potential oversupply of smallapartments, many of which are one-bedroom and student accommodation.

    But despite these concerns, RP Data believes it's got good potential, naming Carlton as ahotspot for units in the St George/RP Data National Property Hotspots Report 2011 releasedearlier this year.

    The report recognises that over the past decade unit prices have experienced nominal growthof 2.9 per cent annually on average, but it notes that over the 12 months to November 2010

    units recorded superior price growth of 9.7 per cent and, according to the report, "Carlton isin a solid position to support future price growth".

    Apart from being close to the city, just north of the CBD, the hotspots report notes Carltonbenefits from significant amenities, including high quality public transport and shoppingfacilities.

    It says the rental market within Carlton is "extremely strong" and with affordable prices, itprovides yields upwards of seven per cent, which are quite attractive to investors.

    "The nearby universities will continue to support rental demand within the suburb, as will theproximity to the CBD," it reads, adding that the suburb has experienced average populationgrowth well above that of most areas of Melbourne.

    View Property For Sale In Carlton

    QUEENSLAND

    Rocklea, QLD

    Distance from Brisbane GPO: 9 kilometres

    Property type: HouseMedian house price: $317,500

    Weekly median advertised rent: $340

    Gross rental yield: 5.6%

    Population: 1500

    Proportion of rented properties in the suburb: 32.1%

    Proportion of houses: 92%

    There's no doubt many people will turn their nose up and raise their eyebrows upon hearing

    the mention of Rocklea in this list. But that's been the case for many 'ugly duckling' suburbsin the past that have then gone on to become sought-after property swans.

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    Yes, Rocklea is largely industrial and was badly battered during the January floods inBrisbane, so it's a little stigmatised. But that doesn't mean investors should strike it off theirlist, or that it doesn't have potential for residential property price growth.

    Terry Ryder ofHotspotting.com.au points out that Rocklea has one of the best long-term

    capital growth rates specifically the average annual rise in median house prices over the past10 years in the Brisbane metropolitan area.

    "The list of leading growth suburbs for Brisbane is dominated by three areas: Ipswich City,Logan City and the industrial southwest precinct of Brisbane City, including places likeRocklea, Acacia Ridge and Archerfield," he says.

    "These places have a lot of industrial property but the housing there is affordable and thereare train links to the city. It shows, again, that 'ugly real estate' attracts plenty of strongdemand if there are attractions like affordability and rail connections.

    "Rocklea has a capital growth average of 15 per cent per year over 10 years, which isexceptional."

    While Rocklea has potential for growth, investors looking to buy in the suburb must do theirresearch diligently, especially in light of the recent floods.

    View Property For Sale In Rocklea

    Greenslopes, QLD

    Distance from Brisbane GPO: 5 kilometres

    Property type: Unit

    Median unit price: $363,750

    Weekly median advertised rent: $335

    Gross rental yield: 4.8%

    Population: 8088

    Proportion of rented properties in the suburb: 50.7%

    Proportion of units: 48.4%

    "This area has good potential for future growth," says Property Searchers director and buyersagent Scott McGeever, about the inner south Brisbane suburb of Greenslopes.

    He lists a multitude of reasons for this, not least of which is the fact that Greenslopes is welllocated, being close to the city, public transport specifically the bus, having access to theEastern Busway and the M1, which is a major highway.

    The suburb also has good amenity with a shopping mall, notes McGeever, and the StonesCorner shopping and caf strip is close by. There are plenty of tenants in Greenslopes,especially with the Greenslopes Private Hospital.

    View Property For Sale In Greenslopes

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    Cooparoo, QLD

    Distance from Brisbane GPO: 5 kilometres

    Property type: Unit

    Median unit price: $375,000

    Weekly median advertised rent: $350

    Gross rental yield: 4.9%

    Population: 13,800

    Proportion of rented properties in the suburb: 42.9%

    Proportion of units: 46.1%

    McGeever points out that Coorparoo is well located and residents have two types of publictransport to choose from bus and rail.

    McGeever advises investors to look for units in well-located older and smaller complexes, setamong single housing areas.

    Colliers International research analyst in Brisbane Alex Beer points out that Coorparoobenefits from its proximity to the Pacific Motorway and Gateway Motorway for access to theGold and Sunshine Coasts, it has an abundance of parks, reserves and sporting fields and isclose to leading Brisbane secondary and tertiary education institutions.

    View Property For Sale In Coorparoo

    Windsor, QLD

    Distance from Brisbane GPO: 4 kilometres

    Property type: Unit

    Median unit price: $385,000

    Weekly median advertised rent: $360

    Gross rental yield: 4.9%

    Population: 6164

    Proportion of rented properties in the suburb: 45.1%

    Proportion of units: 37.7%

    The well-positioned suburb of Windsor already has good accessibility to the Brisbane CBDwith both bus and train public transport options and McGeever points out that the NorthernBusway that's currently being built in Brisbane's north cuts through the suburb, which willonly enhance its accessibility.

    Beer says Windsor also benefits from its connectivity to the north, with the GatewayMotorway; the south, with the Clem 7 tunnel; and the west, with the Inner City Bypass andsoon-to-be-constructed Legacy Way. In addition, Windsor has the benefit of being close tothe Royal Brisbane Hospital, says McGeever.

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    Investors should look at older six-pack unit developments in this suburb, he says, set amongstareas that are dominated by houses, where there's a nice residential feel.

    View Property For Sale In Windsor

    Spring Hill QLD

    Distance from Brisbane GPO: 1 kilometre

    Property type: Unit

    Median unit price: $386,000

    Weekly median advertised rent: $430

    Gross rental yield: 5.8%

    Population: 4835

    Proportion of rented properties in the suburb: 44.6%

    Proportion of units: 71.9%

    Situated on the fringe of Brisbane's CBD, Spring Hill will fare well when it comes to futurecapital growth, believes National Property Research director Matthew Gross.

    He says it has all the hallmarks of a solid investment suburb you can walk to the city, or ifyou don't want to walk it's a cheap cab fare; it has access to all the amenity of the CBD andthe nearby fringe suburb of Fortitude Valley; it's got good public transport with both bus andrail; and it's got education precincts all around it.

    View Property For Sale In Spring Hill

    In Pictures: Absurd Places For Rent

    Annerley, QLD

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    Distance from Brisbane GPO: 5 kilometres

    Property type: Unit

    Median unit price: $388,000

    Weekly median advertised rent: $350

    Gross rental yield: 4.7%

    Population: 9571

    Proportion of rented properties in the suburb: 49%

    Proportion of units: 40.6%

    Gross describes Annerley, just south of Brisbane's CBD, as a "great suburb".

    "Annerley is one of those sleeper suburbs," he says. "It doesn't get a lot of notice there'smore focus on Greenslopes, Stones Corner and Woolloongabba, yet Annerley in manyrespects is in a better position than all of those. I like it a lot."

    Gross notes that Annerley is close to South Bank and West End, where there's plenty ofamenity, especially in the way of entertainment; it's close to educational facilities; and there'sa few hospitals nearby. It's also got good access to the city via the M1 and buses via theSouth East Busway.

    View Property For Sale In Annerley

    WESTERN AUSTRALIA

    Wembley, WA

    Distance from Perth GPO: 5 kilometres

    Property type: Unit

    Median unit price: $290,000

    Weekly median advertised rent: $310

    Gross rental yield: 5.6%

    Population: 9613

    Proportion of rented properties in the suburb: 34.3%

    Proportion of units: 36.1%

    There's an enormous diversity of housing in Wembley, according to Reaffirm senior propertyadviser Simon Moore.

    There are many homes worth more than $1.5 million in the suburb, he says, but at the otherend of the spectrum there are many high-rise complexes with units valued at well below$300,000, reflecting a time when social housing programs saw the development of flat style

    public housing en masse in certain areas.

    Moore notes that Wembley is one of the more sought after suburbs of Perth on the border of the

    'western suburbs' area.

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    "Wembley has the advantage of bordering the inner city suburb of Subiaco, home to one...