A report has attempted to predict the best suburbs to buy property in Australia, with some unexpected results.
The Well Home Loans Green Shoots Report has identified the top 20 suburbs in Australia that are likely to see prices go up in the next few years, using a methodology that seeks to isolate those that are on the cusp of accelerating growth.
Some of the names might be well known to property investors, such as Glenelg in Adelaide and Wynnum in Brisbane, where many are predicting prices to grow ahead of the 2032 Brisbane Olympics.
Others, such as Mount Johns in Alice Springs and Seville Grove on the edge of Perth, might not jump out to investors.
Scott Spencer, CEO of Well Home Loans, said that it was the methodology that made the difference.
“The key indicators that it looks at are inventory levels, so how the levels of supply and demand are on the market,” he explained. “It looks at the number of days that properties are on the market, which can help understand how popular areas have been. It also looks at median asking prices and that into account. Each of those major indicators gives it a different viewpoint.”
While these are the places that may yet spike, it is important to note that the market is hard to predict because of the pandemic-induced uncertainty.
“What they’re trying to factor in as well is sustainability, and trying to isolate whether something is an anomaly,” said Spencer. “The way that people are moving at the moment has really accelerated from ‘I’d like to live somewhere close to where I work’ to ‘I’d like to live where I want to be’. "
“The report tries to work out whether the data is an anomaly, a Covid-related thing, and will it slow down whenever we get to a post-Covid normal. For us, we haven’t been back to the office since March last year and a couple of our staff have moved to where they always wanted to be, and made sure that they added an extra bedroom so that they could have an office.”
It certainly provides food for thought for those looking to buy an investment property, as discerning the suburbs with likely property price rises is usually informed by what has already happened rather than what could happen in the future.
“For us, these are suburbs that don’t traditionally come up in the news very often,” said Spencer. “That’s one of the good things about the report: it takes a different set of indicators than most of the larger places.”
“It looks forwards rather than looking backwards. You’ll see most reports look at what has happened in the last x period of time, whereas this is trying to look at what might potentially happen in the future.”
“Looking at all the different areas across Australia, I don’t think many would be the popular suburbs that most people would think about.”