Victoria, NSW, Queensland dominate the hot list
A panel of property experts has released a list of 100 Australian suburbs primed to withstand market uncertainty brought about by the RBA’s aggressive interest rate hikes.
Billed as “Australia’s best real estate prospects in 2023,” the suburbs in realestate.com.au’s inaugural Hot 100 list were chosen based on growth drivers such as affordability, family appeal, location, amenity, infrastructure and investment prospects. Gentrification activity, population growth, and demographic change were also part of the panel’s key considerations.
A 12-person panel of industry experts compiled the Hot 100 list. They included agency group heads, buyer’s agents and researchers. Among them were Ray White Group managing director Dan White, PropTrack economist Anne Flaherty and BuyersBuyers co-founder Pete Wargent.
“Despite the rapid increases in rates through 2022 and subsequently reduced borrowing capacities and lower home prices, there are still plenty of suburbs that offer great opportunities,” said PropTrack director of economic research Cameron Kusher (pictured above left). “That’s why it’s imperative that anyone thinking of buying does their own research to understand what drives a local market and how it is likely to evolve over the coming years.”
Even with this favourable outlook, Kusher told investors looking for “quick gains” to temper their expectations.
“Remember that housing should be seen as a long-term asset class because of its illiquid nature, and like any asset class, the value of a property will fluctuate over time,” he said. “It’s about purchasing the right property at the right price, rather than buying or selling because that’s what the herd is doing.”
Victoria, New South Wales, and Queensland dominate the top 100
Victorian suburbs accounted for 29 of the top 100 spots, while NSW and Queensland had 24 suburbs each. The list also featured nine South Australia suburbs, seven in Western Australia, five in the ACT, and one each for Tasmania and the Northern Territory.
Kusher said the prevalence of Victorian suburbs “may seem surprising given the larger price falls to date but remember that migration is lifting in the state”.
Additionally, he said the prevalence of NSW and Queensland suburbs on the listed pointed to the medium- to long-term fundamentals of these markets, where supply was low and demand strong.
The Hot 100 list, which was released on December 14, includes Victoria’s Altona, Alfredton, Balwyn North, Berwick and Bundoora, plus NSW’s Alexandria, Arncliffe, Ashfield and Cessnock. Queensland’s Boondall, Bli Bli and Burleigh Heads were also part of the list, as were South Australia’s Blakeview, Brooklyn Park and Christies Beach.
Key trends for 2023
According to PropTrack economist Anne Flaherty (pictured above right), a close examination of the top 100 suburbs highlighted several trends to watch out for in 2023.
“Many suburbs were selected based on their affordability, which is a key concern of some buyers currently active in the market,” Flaherty said.
“Liveability was another key driver of selection, with references to amenity, infrastructure, and family appeal. Since the onset of COVID, people place higher importance on lifestyle. And opportunities for future growth were also important, with many of the experts choosing stand-out suburbs based on their solid investment prospects, a growing population, or undergoing gentrification."
A previous PropTrack report warned that house prices could fall as much as 15% by the end of 2023.
“By the end of this year, we expect the cash rate to rise to between 2.5% and 3%, with some further increases in early 2023,” Kusher said back in July. “Thereafter, we expect rates to remain on hold with the potential for them to be reduced in late 2023 or early 2024.”
