HOTSPOT OPPORTUNITIES PREDICTED …

In the final RP Data Property Pulse report for 2008, RP Data’s leading property analysts - Tim Lawless and Cameron Kusher, combined  to deliver their 2009 Property Hotspots Report Predictions, covering towns and cities around the country where they believe will present opportunities in 2009 for new buyers and investors.

2009 Snapshot Hotspots Results

New South Wales has 5 city house hotspots, 5 city units and in the regions it has 3 hotspots
Victoria – 5 hotspots for houses, 5 for units and in the regional area it has 2
Queensland has 10 city house hotspots,10 for units and in the regional areas it has 6 regional hotspots
South Australia has 2 regional hotspots
Western Australia has 1 regional hotspot
Tasmania has 1 regional hotspot.
Mr Lawless commented that while the world experienced erratic economic behaviours during 2008, the Australian property market proved its resilience by showing only modest value falls in most capital cities. 

Across the nation, median dwelling values declined by 1.24 per cent during 2008 to October, with house values falling by 1.55 per cent and unit values declining by just 0.29 per cent.  By comparison, share market values fell by around 40 per cent over the same period.

However, Mr Lawless believes that despite its proven resilience, the residential market is likely to be relatively flat for the majority of 2009.

“As ongoing economic uncertainty takes hold and people become more cautious about the fallout, factors such as rising unemployment will continue to have a dampening effect on residential property value growth.”

“In saying this, I do believe there are a variety of factors that will act as market drivers such as falling interest rates, increasing affordability, rising rental rates, improving investment yields and a shortage of housing,” Mr Lawless said.

Based on the RP Data Hotspots Report for 2009, the markets that are most likely to record good capital growth over the next 12 months are those that hold that ‘driver’ appeal. Mr Lawless believes that first home buyers and investors will be the first to jump on these suburbs.

However, for the first home buyer, the opportunity to buy is relatively short with the bonuses in the current First Home Owners Grant closing at the end of the 08/09 year.

Investors who take advantage of the strong buying conditions are likely to be competing against first home buyers where, simultaneously, both groups will be targeting low entry point properties showing strong yields and where there is potential for long-term capital growth.

Looking at the upper end of the property market, RP Data’s Cameron Kusher believes that it will be the affluent-type markets that is likely to languish as we see a greater curb in demand based on economic factors such as  poor company profits, lower than expected bonuses, and severe pain in the equities and financial markets.

“As a result of these changes in the top end, holiday homes and tourism-driven investments will be affected and in many cases, there will be a lot more forced sales,” Mr Kusher said.

The 2008 RP Data Hotspot selections focus on both houses and units.

The selection is based on ‘strategic affordability’ and identifies those suburbs that represent good value for money based largely on location, necessities and social options.

Please note, the hotspot selections are based on what we deem will be the best performing areas during 2009 and as such, not all states and territories have had areas deemed to be hotspots for 2009, hence those areas aren’t included.

 Sydney 2009 hotspots

Suburbs likely to outperform during 2009
Granville – is one of the most affordable suburbs in which to purchase a house within 20km of the Sydney CBD, the current median house price of $345,000 represents strong relative value. The suburb is strategically located just minutes from Parramatta, which has an abundance of retail and commercial amenity. The suburb has a lot of smaller cottages which appear to be unrenovated, renovation of these properties is a great way to add value and build equity. The suburb also reaps the benefits of its own train station, which services a number of lines including the North Shore and the Blue Mountains, for private car access, the Great Western Highway and the Western Motorway are within close proximity to Granville.

Macquarie Park – is part of one of Sydney’s most exciting new precincts and is situated approximately 12km from the Sydney CBD. The Macquarie Park region incorporates the Macquarie University, a major shopping centre plus an expanding commercial office precinct. During 2008, three new train stations have opened in the local area adding to the significant appeal and access to Macquarie Park and the suburb itself is growing into a self contained community however, it is still very close to the Sydney CBD.  Units within the suburb represent an affordable price point in a very strategic location.

Toongabbie – is located approximately 25km from the Sydney CBD. The house offering within Toongabbie is diverse, however, the vast majority is low-set timber or fibro houses on large blocks of land which appear to have substantial renovation and extension potential. In recent years, a new shopping complex has been developed in the suburb and it includes a Woolworth’s supermarket.  Toongabbie enjoys the benefit of a railway station within the suburb and quality access to the CBD via the nearby Great Western Highway and Western Motorway. Toongabbie is located in an enviable location, less than 6km from a major retail and working node at Parramatta and just 5km from Baulkham Hills.

Greenwich – is a residential suburb located on Sydney’s Lower North Shore just 4km from the Sydney CBD. The suburb is very strategically located close to major office markets and retail precincts at Crows Nest, North Sydney, Sydney and Chatswood. Greenwich itself also enjoys elevation which affords properties excellent views and many units enjoy these views. Greenwich units are generally older walk-up-style units which, in most instances, have strong internal renovation potential and will tend to have lower body corporate fees. Train amenity is found nearby in the adjacent suburb, Wollstonecraft whilst ferries can be caught from Greenwich Ferry Wharf to Circular Quay in the Sydney CBD.

Ultimo – is situated approximately 2km from the Sydney CBD and is a suburb which is well and truly dominated by unit development. The suburbs unit offering is mixed, however, it has a large presence of converted factories. The rental market within the suburb is very strong due to the proximity to the CBD, the University of Technology Sydney and Sydney TAFE, the strength is reflected in the current average gross rental yield of 6.4 per cent. Retail amenity is located close by in Sydney CBD, Pyrmont and Broadway whilst transport amenity is also afforded within the suburb by the Sydney Light Rail Stations at Paddy’s Market and Exhibition System whilst the suburb is within walking distance to Sydney’s Central Railway Station.

Chippendale – is an inner-city suburb of Sydney, located less than 3km from the Sydney GPO. The current median unit price at $372,000 shows strong relative affordability, especially for a suburb which is adjacent to Sydney’s Central Railway Station.  The unit offering within the suburb is varied and includes older terrace and warehouses that have been transformed into units as well as modern unit complexes. As to be expected rental demand in the area is very strong due to its excellent location and proximity to a number of nearby universities and TAFEs. Retail amenity is abundant both within the CBD and in nearby Broadway.

West Ryde – is located less than 13km north-west of the Sydney CBD. The suburb is a well established residential area and the current median house price of $635,000 shows strong relative affordability when compared with surrounding suburbs. The housing offering within West Ryde is very diverse and includes federation homes, face brick houses, fibro houses and cottages, the fibro houses and cottages, in particular, are likely to have strong renovation potential. The suburb has its own retail amenity within and access to other parts of Greater Sydney is very good via the train station within the suburb. The suburb is also close to the growing commercial areas located at Macquarie Park and Sydney Olympic Park, highlighting the strategic nature of the suburb.

Canada Bay – is a well established residential area that fronts on to the Parramatta River. On an annual basis the suburb sees few house sales but the current median price represents good relative affordability when considering prices in surrounding suburbs and the waterfront positioning of the suburb. Most of the local amenity is situated in the nearby suburb of Drummoyne and the closest rail amenity is found within Burwood less than 2km from the suburb. By private vehicle, access to the suburb is good via the Great Western Highway.

Crows Nest – is located just 4km from the Sydney CBD on Sydney’s Lower North Shore. The suburbs housing offering is dominated by federation houses and long established cottages, most with significant character. The current median house price of $930,000 is substantially more affordable than most nearby suburbs where virtually all median house prices are above $1 million. Crows Nest has its own retail and commercial precinct and is located close to a number of others, such as the Sydney CBD, North Sydney and Chatswood. For ease of transport, the suburb also has its own train station and the Warringah Freeway and Pacific Highway also run through the suburb.

Chiswick – enjoys a waterfront location on the Parramatta River situated between Five Dock Bay and Abbotsford Bay.  The suburb is located approximately 7km from the Sydney CBD and many units are located on the river or enjoy quality view. The unit offering is dominated by older product, however, in most instances these are situated on the water and the older nature of these building means that in most cases Body Corporate fees will be cheaper. Nearby retail is located in the suburbs of Concord, Burwood, Drummoyne and Strathfield. Whilst Chiswick doesn’t have rail amenity, it does have a ferry terminal and ferries run to Parramatta and to Circular Quay in the Sydney CBD from the terminal.

 Melbourne’s 2009 hotspots

Suburbs likely to outperform during 2009

 Deer Park– is a strategically located, affordable residential suburb situated less than 20km from the city. The suburb represents an appealing price point at $255,000 and is in the growth region of Melton. It is one of the few suburbs in the area to have its own train station and is also strategically located on the Western Highway and the Western Ring Road. The house offering within the suburb is varied, most properties are long established and made from brick, timber or fibro, in particular, the fibro and timber houses are likely to have significant renovation potential. The suburb is also beginning to see a significant injection of new housing stock, which should offer a lift to the area as it is likely to mean the injection of greater amenity for the suburb.

Kensington – is a suburb of inner Melbourne, situated just 5km from the CBD. The current median house price of $540,000 represents one of the most affordable suburbs within the 5km ring of Melbourne’s CBD. The suburb is very well catered to for public transport amenity with three train stations within the suburb (Kensington, South Kensington and Macauley). By private vehicle, the suburb is easily accessed via the Western Link. The housing offering within the suburb is dominated by timber cottages on small blocks; many are likely to have substantial internal renovation potential. The proximity to the CBD means there is an abundance of retail amenity nearby and along Racecourse Road at Flemington there are a number of restaurants cafes and bars. A smaller retail strip is also found on Belair Street within Kensington.
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Collingwood – is an inner suburb of Melbourne which is located adjacent to the Melbourne CBD and less than 3km from the Melbourne GPO. The current median house price within Collingwood represents strong affordability, particularly when compared to neighbouring and nearby suburbs. The house offering is dominated by cottages on very small blocks or converted old buildings, many of the cottages are likely to have internal renovation potential. Public transport to the suburb is excellent with Collingwood having its own train station as well as tram amenity along Smith and Gertrude Streets and Victoria Parade. The proximity of the suburb to the CBD means that there is substantial retail amenity, within Collingwood and neighbouring suburbs, such as Fitzroy, there are numerous bars and restaurants.

Reservoir – is situated approximately 12.5km north of the Melbourne CBD. The suburb is a long established residential area and the housing offering is dominated by fairly basic face brick houses and houses built from fibro. The suburb in recent years has also begun to witness substantial new development of higher density properties. The suburb has its own train station which affords public transport to the area as do a number of bus services. The suburb is well catered to for retail amenity with shopping centres in a number of adjacent suburbs. Meanwhile, the neighbouring suburb of Preston has a small retail strip along High Street, whilst there is a substantially greater offering within neighbouring Preston.

Oakleigh East – sits approximately 15km south-east of the Melbourne CBD in a long established residential area of city. The suburb shows strong affordability relative to other nearby areas. The housing offering within Oakleigh East is varied but brick homes with either face brick or rendered concrete are overwhelmingly the dominant house type. Oakleigh East has little in the way of retail amenity, however, neighbouring Oakleigh has a significant retail precinct with numerous shops, restaurants supermarkets and other retailers. Access by private vehicle to Oakleigh is good via the Princes Highway and while Oakleigh East has no train amenity, train stations are found in the neighbouring suburbs of Oakleigh and Huntingdale.

Flemington – is situated only 4.5km from Melbourne’s CBD and is home of the Melbourne Cup at the Flemington Racecourse. Flemington has a couple of independent supermarkets situated on Racecourse Road, where there are also an abundance of restaurants with cuisine from many nationalities as well as being home to a number of bars and clubs. Units within Flemington represent an affordable market entry point. Flemington has its own train stations (Newmarket and Flemington Bridge), while the race track has two stations which operate when major events are being held. Buses also service the suburb and trams run along Racecourse Road, Epsom Road and Union Road affording direct access to the CBD.

Carlton – is located directly north of the Melbourne CBD. The suburb has an extremely diverse ethnic make-up, largely driven by the fact that it is located so close to the Parkville campus of the University of Melbourne. However, many immigrants are also permanent residents of the suburb. The unit offering is dominated by student accommodation product which generally provides excellent returns for owners at an affordable price. Carlton is home to both a Coles and Safeway supermarket. Within Carlton there are a significant number of restaurants and bars most of which are located along Lygon Street. These numerous restaurants add to the significant appeal to the suburb. Units within Carlton are very affordable at a current median price of $324,000 and are returning a very strong average gross rental yield of 6.1 per cent.

Brunswick West – represents an affordable inner-city unit option for first home buyers, situated just 7km from the Melbourne CBD, the current median price of $314,000 is extremely affordable. The suburbs unit offering is dominated by older ‘walk-up’ style units that generally enjoy a more affordable price tag and lower body corporate fees. In most cases, they have significant internal renovation potential. By private vehicle, access to Brunswick West is simple via the Citylink Motorway. Meanwhile, trams afford the suburb public transport amenity via Melville Road and Melville Streets and the adjacent suburb Brunswick, has rail amenity within.

Abbotsford – is located approximately 4km east of the Melbourne CBD. The suburb sits on the Yarra River and is surrounded by exclusive suburbs such as Kew, Richmond, Collingwood and Clifton Hill. The unit price within Abbotsford is significantly more affordable than these more exclusive areas that surround the suburb. The unit offering is generally older units of around two to three storeys with some newer units starting to be delivered over recent years. The closest large-scale shopping centre is situated in Richmond and includes Coles, Hoyts Cinema, Fitness First, Ikea and Kmart. Abbotsford has little in the way of restaurants and cafes, however, surrounding suburbs like Collingwood and Richmond have numerous restaurants and cafes. The suburb is home to a train station (Victoria Park Station) and Collingwood and North Richmond Stations are within walking distance of many properties in the suburb.

Prahran – is located next to the upmarket areas of South Yarra, Toorak and Armadale. Prahran has an abundance of local retail, social and dining amenity. The suburb has an abundance of older units, some contained within heritage buildings, and many of these units have significant internal renovation potential which can significantly boost the property value. The suburb is home to the Prahran markets, which have substantial amounts of fresh produce. The suburb also has a Safeway and Coles. Prahran has its own shopping centre, Pran Central, and a significant supply of retailers along Chapel Street. Also along Chapel Street are numerous restaurants and cafes, as well as numerous bars and nightclubs.  Prahran is extremely well serviced by transport infrastructure. The suburb has its own train station whilst a number of trams service Chapel Street which is within walking distance of most properties with Prahran.

Brisbane 2009 hotspots

Suburbs that are likely to outperform during 2009

Redcliffe – is located approximately 28km north of Brisbane City and sits on a waterfront peninsula.  The suburb is well located and shows an affordable pricing relativity when compared to suburbs which are situated an equivalent distance from the CBD but located away from the ocean. Redcliffe has an abundance of amenity with a number of restaurants and shops situated both within the suburb and in neighbouring suburbs. Many houses in Redcliffe have substantial renovation potential which is a great way to add to the capital value of the property.

Salisbury – is situated around 9km south of the Brisbane CBD and is a suburb which has pockets of residential and industrial uses, however, both are clearly defined in their locations. The suburb has its own train station and is serviced by a number of main roads which provide good access to the suburb.  Salisbury’s housing market has a dominance of post-war homes and many of these properties are unrenovated with substantial scope for renovation.

Keperra – sits approximately 10km north-west of Brisbane’s CBD and is positioned between a number of hills and mountains affording a pleasant ‘green’ outlook. Keperra has its own shopping centre and within the adjacent suburb, Mitchelton, there is also a major shopping centre. The suburb has its own train station and the housing offering within the suburb is dominated by older, unrenovatd post-war homes many of which are ripe for renovation.

Coopers Plains – is found to the south of the Brisbane CBD, approximately 11km away, adjacent to Salisbury. Coopers Plains has a lot of industry within the suburb, however, it is clearly separated from the pockets of housing. Coopers Plains enjoys quality access around Greater Brisbane via a number of main roads servicing the suburb as well as enjoying the benefit of rail amenity within the suburb. The house offering is dominated by unrenovated post war homes which have significant potential for renovation.

Zillmere – is located around 11km north of the Brisbane CBD and is a long established residential area.  The suburb shows strong relative pricing when compared to nearby areas, largely due to the fact that many of the houses are post-war homes which have seen little or no renovation. The suburb has its own train station and the suburb is easily accessed via Gympie and Sandgate Roads. Zillmere is also located close to Westfield Chermside, one of Brisbane’s largest shopping centres, as well  as a substantial amount of strip retail along Gympie Road  at Aspley.

Chermside West – is situated less than 10km north of the Brisbane CBD, within a well established residential area. Chermside West’s house offering is dominated by older properties varied between brick, timber and fibro houses on large blocks of land; many of these properties appear to have significant renovation potential. Chermside West is adjacent to a major retail centre in the adjacent suburb, Chermside which is also home to a growing office market. Whilst Chermside West doesn’t have any rail amenity, buses run from the suburb to Chermside where there is a major bus interchange and the area will benefit from the Northern Busway which is currently being built.

Rocklea – is the most affordable suburb within a 10km radius of the Brisbane CBD, situated approximately 9km from the city centre and with a current median house price of $340,000. Rocklea is probably best known as an industrial suburb, however, there is a pocket of housing within the suburb that is well insulated from the heavier land uses. The vast majority of houses within Rocklea are a renovator’s delight. An investment in an area such as Rocklea, particularly for a first home buyer, could reap big rewards if they are able to do some renovations to the property. Rocklea enjoys excellent access via Ipswich Road, has its own train station and has many working nodes in and around the suburb.  The suburb shows significant affordability compared with other surrounding suburbs.

Banyo – is located less than 12km north of the Brisbane CBD and is a suburb which has a fairly even split of residential properties and commercial/industrial properties. The suburb is strategically located close to the Gateway Motorway and Sandgate Road and has two train stations within the suburb. The suburbs housing offering is well and truly dominated by older, unrenovated houses with significant renovation potential meanwhile, over recent years some new developments have appeared offering new quality housing.

Mount Gravatt East – is situated in an elevated position approximately 9km south of the Brisbane CBD.  The elevated position affords many properties quality views while the house offering is quite varied with many properties having renovation potential. The suburb is serviced by Cavendish and Logan Roads which afford good access. The suburb doesn’t have rail amenity, however, many buses service the area and the proximity to the South East Busway located in the adjacent suburb means that access to the city is very easy.

Loganholme – sits just to the north of the Logan River, approximately 28km south of the Brisbane CBD and strategically located between Brisbane and the Gold Coast. The suburb’s housing offering is dominated by long established houses on large blocks, many have the option to be renovated but are also able to be comfortably lived in as is. Loganholme sits adjacent to the M1 Motorway and is just minutes from major retail at the Logan Hyperdome, as well as being within close proximity to Beenleigh.  While the suburb doesn’t have a train, access by private vehicle access is excellent via the M1 Motorway and a number of train stations are found within close proximity affording access to Brisbane and the Gold Coast.

Wooloowin – is located less than 7km from the Brisbane CBD and sits within a long established residential area of Brisbane. Wooloowin currently represents the most affordable unit buying within a 10km radius of the Brisbane CBD. The suburb has two train stations and is adjacent to Albion a suburb which is seeing significant new development which will incorporate an injection of retail, commercial and residential into the local area. The unit offering is dominated by older-style walk-up units which have the potential for internal renovation; the smaller stature and lack of facilities mean that Body Corporate fees are generally lower making these properties particularly appealing for first home buyers.

Annerley – is a long established residential area is located less than 5km south of the Brisbane CBD. The Annerley unit market is quite diversified with many older walk-up units, however, recent years have seen an injection of newer unit and townhouse stock also. The suburb has significant strip retail found along Ipswich Road, while additional retail is found within the neighbouring suburbs of Woolloongabba, Yeronga and Fairfield. The suburb is afforded excellent access via Ipswich Road and the South-East Freeway whilst the proximity to the Freeway means it also benefits from the South-East Busway. Many buses also run to and from the city via Ipswich Road and nearby train stations are found at Buranda and Fairfield. The suburb also enjoys strong rental demand due to Princess Alexandra Hospital being located within.

East Brisbane – is a well established inner-city residential area, which fronts on to the Brisbane River and is located less than 3km from the CBD. The unit market is well and truly dominated by older ‘six-packs’ with little amenity meaning that Body Corporate fees are generally lower. On the river front some new, high-quality unit developments have begun to appear over recent years. Access to the suburb is good via Vulture Street and Shafston Avenue and public transport availability to the CBD is good via a number of bus services and the CityCat ferry service which stops at Mowbray Park. The proximity to the CBD means that retail is in abundance within close proximity, while the suburb also has convenience retail within.

FortitudeValley – lies adjacent to the Brisbane CBD and is Brisbane’s largest entertainment precinct.  The unit offering within the suburb is mixed ranging from art-deco units to older walk-ups right through to modern high quality units.  Current average gross rental yields within Fortitude Valley are very strong sitting at 6.4 per cent. The proximity to the CBD means that amenity is in abundance whilst the suburb also has numerous shops, restaurants, bars and nightclubs. Most buses service the suburb and the vast majority of trains service Fortitude Valley Station meaning that public transport access to virtually anywhere in Greater Brisbane is simple from the area.

Camp Hill – is located less than 6km from Brisbane’s CBD and is a well established residential area with quality housing product. The unit market is dominated by older product in smaller product that in most instances has little amenity. This feature provides affordability and helps to ensure Body Corporate fees on the property are generally cheaper. Some areas of the suburb are elevated which means many properties enjoy excellent city views and the area is set to benefit from the completion of the Eastern Busway which will run along Old Cleveland Road and provide excellent public transport to the CBD.

Albion – is situated less than 5km from the CBD and is an area which is set to benefit from substantial new development of residential, retail and commercial currently being undertaken within the suburb.  The unit offering within Albion is dominated by older style units, however, some smaller more modern unit developments have been undertaken during recent years. The elevated terrain of Albion means that many properties enjoy quality city views. The suburb is very well serviced by public transport with many buses servicing Sandgate Road and the suburb having its own train station. A number of restaurants and cafes are found within the suburb and supermarkets can be found in the adjacent suburb, Lutwyche.

Greenslopes – is a very well established residential area which has a substantial supply of units, many of which have been developed over the past 20 years. The unit offering is generally brick construction and walk-up style product meaning that Body Corporate fees are generally much cheaper than those which would be found for buildings with lifts. Greenslopes is strategically located close to the Pacific Motorway and subsequently the South-East Busway. Many buses also service the numerous main roads within the suburb. The suburb has substantial strip retail, particularly along Logan Road and within the Stones Corner precinct.  It also has two supermarkets and a number of restaurants.

Clayfield – has long been established as a blue chip residential suburb located less than 7km from the Brisbane CBD. The unit offering is generally older and this is reflected in the relatively affordable median unit price. These units benefit from affordable body corporate fees making them appealing for first home buyers. The suburb is located close to the well established retail precinct at Racecourse Road, Hamilton, which adds to the appeal as does the proximity to the growing precinct at Nundah. Clayfield has its own train station which affords access to many other areas of Greater Brisbane and a number of bus services run along Sandgate Road also.

Chermside – is a growing medium density residential area which is located approximately 9.5km from the Brisbane CBD. Over recent years, a number of new unit developments have been injected in to this market and compared to new units in the inner city, these properties are priced at very attractive levels, particularly for first home buyers. The suburb is also home to a growing office market and one on Brisbane’s largest retail centres – Westfield Chermside, which affords the suburb significant appeal.  Long term, the suburb will benefit from the development of the Northern Busway and currently the suburb has a large bus interchange which provides significant public transport to the local area and the Brisbane CBD.

Moorooka – is located 7km south of Brisbane’s CBD and is a very well established residential location.  The unit offering within Moorooka is in most instances older unit developments with little amenity but large internal floor spaces with potential for renovation. Moorooka is well serviced by public transport with many buses servicing the suburb, particularly along Ipswich and Beaudesert Roads. The suburb also has its own train station. Retail amenity is abundant with many smaller retailers and a Woolworths supermarket located on Beaudesert Road.

RP Data National Media Release

 Friday 26 December, 200

PRODUCED BY RP DATA’S TIM LAWLESS & CAMERON KUSHER