Investor Special Report and 2022 top suburb picks

We have released our property market outlook, and top suburb picks for investors for 2022.

The property market moves into downturn phase

Australia’s housing market will digest the prospect of rising interest rates over the next six months, leading to a downturn that will present some opportunities for counter-cyclical investors.

The Australian economy has rebounded far more quickly than anyone could have dared to hope but combining the rebound in demand with supply chain disruptions means that the second half of 2022 will see some of the highest headline inflation prints in approximately three decades.

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  • Get an in-depth state-by-state analysis
  • Compare our top 10 suburb picks

The prospect of the cash rate target potentially rising from close to zero to 3 per cent by the end of this year will be a serious handbrake on housing market sentiment and activity, not least because so many younger borrowers have never experienced interest rate hikes before, let alone the fastest tightening cycle since 1994.

Our best estimate is that the property market downturn will continue for as long as borrowers fear rising mortgage rates, led by Sydney and Melbourne, and this is likely to mean for at least the remainder of 2022.

The flip side to this is that the underlying housing market fundamentals are strengthening, with immigration visas set to be fast-tracked to address Australia’s skills shortage, the lowest unemployment rate in 50 years, and incomes now rising.

The underlying housing market fundamentals are strengthening, with immigration visas set to be fast-tracked, the lowest unemployment rate in 50 years, and incomes now rising.

Top suburb picks

We have now released our Investor Special Report for 2022-3, assessing the outlook for each of Australia’s states and territories. Using our unique housing market analysis tools, we have not only taken a macro view in our Investor Report, but we have also identified some of our favourite suburb picks and investment hotspots.

New South Wales top suburb picks

In New South Wales, we expect there to be a sharp rebound in sentiment and activity in early 2023, especially in the sub $1.5 million price brackets, as the long-discussed stamp duty reform kicks in for first homebuyers from January.

All of our suburb picks for houses and units, therefore, reflect this, as we believe the property market recovery will be driven from then entry-level price points upwards.

Suburb Region Postcode Property type No. of properties Median price ($) 
Charlestown Newcastle 2290 House 4,362 $874,043 
New Lambton Newcastle 2305 House 3,644 $1,072,312 
Umina Beach Central Coast 2257 House 5,626 $1,170,769 
Bateau Bay Central Coast 2261 House 4,153 $1,067,630 
Woy Woy Central Coast 2256 House 3,216 $1,010,846 
Moss Vale Shoalhaven 2577 House 3,260 $1,088,656 
Ulladullla Shoalhaven 2539 House 2,786 $999,673 
Mittagong Wollongong 2575 House 2,145 $1,080,602 
Nelson Bay Hunter Valley 2486 House 2,486 $1,059,037 
Albion Park Illawarra 2527 House 4,134 $921,756 
Houses – budget up to $1M

Suburb Region Postcode Property type No. of properties Median price ($) 
Randwick Eastern Suburbs 2031 Unit 10,111 $1,204,902 
Maroubra Eastern Suburbs 2035 Unit 6,525 $1,018,000 
Narrabeen Northern Beaches 2101 Unit 2,664 $1,332,929 
Freshwater Northern Beaches 2096 Unit 2,201 $1,290,867 
Drummoyne Inner West 2047 Unit 3,912 $1,249,934 
Dulwich Hill Inner West 2203 Unit 3,835 $859,275 
Neutral Bay North Sydney 2089 Unit 4,958 $1,398,399 
Mosman North Sydney 2088 Unit 8,063 $1,277,051 
Surry Hills Inner South 2010 Unit 7,587 $985,685 
Darlinghurst Inner South 2010 Unit 5,893 $1,172,404 
Units – budget up to $1M

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Melbourne top suburb picks

The Melbourne market has been significantly disrupted over the past couple of years, with extended lockdowns and COVID restrictions and decline in the population as residents headed interstate to south-east Queensland.

The relative underperformance of the Melbourne market means that there are some attractive deals on offer for counter-cyclical investors in suburban houses. Some counter-cyclical investors are now looking at investment grade units in Melbourne after a decade of underperformance, particularly where they can find assets with a point of scarcity.

The relative underperformance of the Melbourne market means that there are some attractive deals on offer for counter-cyclical investors in suburban houses.

Suburb Region Postcode Property type No. of properties Median price ($) 
Burwood East Inner East 3151 House 3,378 $1,303,234 
Blackburn South Inner East 3130 House 2,288 $1,345,287 
Cheltenham Inner South 3192 House 5,933 $1,334,079 
Chelsea Inner South 3196 House 1,636 $1,247,282 
Highton Geelong 3216 House 5,915 $1,024,287 
Belmont Geelong 3216 House 4,824 $811,405 
Glenroy North West 3046 House 5,109 $909,772 
Keilor East North West 3033 House 4,553 $1,039,600 
Reservoir North East 3073 House 12,556 $1,025,038 
Preston North East 3072 House 9,164 $1,283,961 
House – budgets up to $1.2M
Suburb Region Postcode Property type No. of properties Median price ($) 
Kew North East 3101 Unit 5,042 $848,098 
Doncaster East North East 3109 Unit 4,199 $856,240 
Camberwell North East 3124 Unit 3,428 $854,014 
Carnegie South East 3163 Unit 6,393 $645,017 
Caulfield North South East 3161 Unit 4,583 $715,943 
Cheltenham South East 3192 Unit 4,498 $701,077 
Pascoe Vale North West 3044 Unit 4,152 $661,352 
Glenroy North West 3046 Unit 4,350 $580,354 
Springvale Inner East 3171 Unit 3,212 $560,074 
Glen Waverley Inner East 3150 Unit 4,325 $875,777 
Unitis – budget up to $750K
South-east Queensland top suburb picks

In south-east Queensland, the rental market remains extraordinarily tight following the fastest net interstate migration to the state in Australia’s history, which is continuing. The state has benefited from remote and flexible working arrangements more than any other state, and there are some excellent opportunities to buy houses in Brisbane, Gold Coast, and Sunshine Coast.

Price growth has been strong over the past 18 months in Queensland, so investors need to be discerning, buy carefully, negotiate hard, and take a long-term view, perhaps out to the 2032 Brisbane Olympics.

Suburb Region Postcode Property type No. of properties Median price ($) 
Aspley Brisbane North 4034 House 3,999 $942,448 
Wavell Heights Brisbane North 4012 House 3,660 $1,208,391 
Brighton Brisbane North 4017 House 3,547 $875,220 
Chapel Hill Brisbane West 4069 House 3,569 $1,247,925 
Kenmore Brisbane West 4069 House 3,359 $1,066,637 
Robina Gold Coast 4226 House 5,989 $1,137,119 
Southport Gold Coast 4215 House 4,987 $859,936 
Buderim Sunshine Coast 4556 House 8,978 $1,120,966 
Tewantin Sunshine Coast 4565 House 3,853 $1,023,357 
Maroochydore Sunshine Coast 4558 House 3,517 $963,249 
Houses – budget up to $1M
Suburb Region Postcode Property type No. of properties Median price ($) 
New Farm Inner Brisbane 4005 Unit 5,448 $737,786 
Bulimba Inner Brisbane 4171 Unit 2,007 $697,020 
Kedron Brisbane North 4031 Unit 1,753 $432,166 
Carseldine Brisbane North 4034 Unit 1,035 $469,385 
St Lucia Brisbane West 4067 Unit 3,203 $534,313 
Indooroopilly Brisbane West 4068 Unit 3,018 $506,093 
Taringa Brisbane West 4068 Unit 3,003 $473,354 
Maroochydore Sunshine Coast 4558 Unit 7,019 $699,609 
Mooloolaba Sunshine Coast 4557 Unit 4,369 $726,935 
Buderim Sunshine Coast 4556 Unit 2,852 $586,337 
Units – budget up to $500K

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South Australia top suburb picks

After a relatively quiet decade, a looming rental crisis and relative affordability are driving a tremendous surge in interest from investors looking to buy in Adelaide.

Two key features of the past couple of years have been a ‘race for space’ and water as a drawcard for property buyers. Some of Adelaide’s beachside suburbs tick both of these boxes and from relatively attractive price entry points as compared to the larger capital cities.

Suburb State Postcode Median house price ($) 12-month price growth (%) 
Kilburn SA 5015 $472,500 28% 
Christies Beach SA 5165 $460,000 18% 
Hallett Cove SA 5158 $600,000 15% 
Seaford SA 5169 $595,000 30% 
Moana SA 5169 $580,000 21% 
Semaphore SA 5019 $925,000 10% 
Semaphore Park SA 5019 $650,000 14% 
Exeter SA 5019 $722,500 30% 
Modbury SA 5092 $491,000 12% 
Valley View SA 5093 $521,000 23% 
Houses – budgets from $450K

Looking to invest but don’t know how to start or where to buy? ​

Download our Free Property Investor Report to get all the insights you need to know

  • Understand the macroeconomic environment
  • Get an in-depth state-by-state analysis
  • Compare our top 10 suburb picks

Counter-cyclical opportunities

Average household sizes declined through the pandemic, and despite a large volume of dwellings under construction, there is going to be tremendous pressure on Australia’s housing stock over the next few years as immigration ramps up again.

As the population rises towards 350,000 to 400,000 per annum by the end of next year, and as borrowers realised that mortgage rates are still relatively low in absolute and historic terms, we believe that the second half of 2022 will prove to be an attractive period to buy for investors seeking an inflation hedge as rents soar.

There is an excellent opportunity to buy with far less competition and to negotiate hard on quality assets for the long term. Of course, borrowers need to factor in that mortgage rates will inevitably rise from here, and to take a long-term view of investment property as an asset class.

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