Around $300k

There’s no need to set­tle for a poky stu­dio even in one of the big­ger cities. If you know where to look, you can find great value with the prom­ise of strong growth.

Money Magazine Australia - - COVER STORY | 100 SUBURBS | SET TO BOOM -

It’s al­ways in­ter­est­ing to watch the ex­pres­sion on peo­ple’s faces in Syd­ney and Mel­bourne when you talk about be­ing able to buy great prop­er­ties at this price point. In most cases they think all they can get for their money at best might be a one-bed­room stu­dio in one of the big­ger cities. This is so far from the truth and, as demon­strated, you can even buy houses in some of our cap­i­tal cities, and our data is sug­gest­ing this might be worth con­sid­er­ing!

Glenorchy, Tas­ma­nia 7010 – houses

This sub­urb is about a 20-minute drive north of Ho­bart’s CBD. Its Lo­ca­tionS­core was 82 at the end of June 2018. The Lo­ca­tionS­core is con­sid­ered “good” if it is over 62 and “ex­cel­lent” if above 77.

The Lo­ca­tionS­core for Glenorchy houses has risen from the mid 60s about three years ago into the low 80s now. The rise has been an al­most straight line with very lit­tle volatil­ity.

The stand­out sta­tis­tics that have led to such a high score in­clude fast sell­ing times, low dis­count­ing and high yields.

Three years ago it typ­i­cally took about four months to sell a house in Glenorchy. Now it takes less than four weeks.

Dis­count­ing is around 0.25%. That means sell­ers will turn their nose up at any­thing but the most gen­er­ous-sound­ing of­fers.

The yield is over 5.5% and the va­cancy rate is a miserly 0.33%. With in­ter­est rates be­ing so low, many in­vestors are likely to have a prop­erty that is com­fort­ably cash flow pos­i­tive.

One neg­a­tive about Glenorchy, though, is the higher pro­por­tion of renters to owner-oc­cu­piers at 43%. The coun­try-wide av­er­age is un­der 30%. It’s noth­ing alarm­ing but keep in mind that some streets may have trou­ble spots.

Whit­ting­ton, Vic­to­ria 3219 – houses

This sub­urb of Gee­long is about an hour and 20 min­utes from Mel­bourne’s CBD. The house mar­ket at the end of June had a Lo­ca­tionS­core of 82. From mid 2015 to mid 2017 the Lo­ca­tionS­core has been un­der 75. It’s only been in the past nine months that things have started to re­ally heat up.

None of the met­rics were truly out­stand­ing for June but al­most all of them were com­fort­ably bet­ter than the na­tion­wide av­er­ages: quick sell­ing times, low dis­count­ing, very healthy yield and a low per­cent­age of stock on mar­ket.

Auc­tion clear­ance rates are a bit patchy, with low vol­umes re­cently. But they have tripled from the same time two years ago to the end of June, to an im­pres­sive 84%.

Online search in­ter­est has risen from about 30 a year ago to nearly 150 now. That’s more than dou­ble the Aus­tralian av­er­age.

The per­cent­age of stock on mar­ket has been quite volatile for the past three years. This is nor­mal for thinly traded mar­kets where sup­ply is tight. Stock lev­els have more than halved from three years ago, now down to 0.36% – well be­low our bench­mark of 1%.

How­ever, Whit­ting­ton does have a higher pro­por­tion of renters to owner-oc­cu­piers than is con­sid­ered “good”. Ideally, we want it as low as pos­si­ble but 30% is the pass mark and Whit­ting­ton’s is sit­ting at over 40%. We wouldn’t have cause for alarm un­less it was as high 60%. Find­ing good streets shouldn’t be a prob­lem.

Ber­riedale, Tas­ma­nia 7011 – houses

A lit­tle fur­ther north of Ho­bart than Glenorchy is the sub­urb of Ber­riedale. At the end of June, Ber­riedale’s house mar­ket had a Lo­ca­tionS­core of 82.

Prices have grown by about 25% in the past 18 months with the Lo­ca­tionS­core up from the mid 70s. Although the growth has taken a breather for a few months, the sup­ply and de­mand met­rics in­di­cate there’s even more to come.

Houses are sell­ing in about a month on av­er­age. Go back just two years and they were tak­ing four months.

A va­cancy rate of 2% to 3% is con­sid­ered a bal­anced mar­ket. But the va­cancy rate for houses in Ber­riedale was less than 0.5% at the end of June 2018 – no room at the inn. This helps to ex­plain yields ap­proach­ing a dizzy­ing 6%.

Stock on mar­ket is chron­i­cally low at 0.42% and the num­ber of online searches con­ducted in June reached fever fig­ures at 180 per prop­erty avail­able.

Just a word of warn­ing about the Ber­riedale hous­ing mar­ket, though. It only just squeezed into con­sid­er­a­tion for this re­port due to a lower than ideal sta­tis­ti­cal re­li­a­bil­ity score of 60%.

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