2021 | Top growth suburbs in Australia right now
Looking to invest in a property and want to know the suburbs that are currently property growth hotspots in Australia right now?
Despite the unprecedented COVID pandemic, which is far from over, CoreLogic reports that the national market is up +10.6 per cent over the year to date, confounding many pundits who had predicted a bloodbath a little over a year ago. It has not all been plain sailing though, with restrictions and lockdowns hampering real estate activity across the country, and the economy briefly experienced a recession in 2020.
Metro markets also suffered more than their regional cousins, as people took flight for less crowded shores with remote working easing the transition for many. This saw regional markets outperform the capital cities, up +15.2 per cent vs +9.4 per cent for the year to date (YTD).
Dig into the data and the postcodes posting the most impressive year-on-year growth in prices is not in our two biggest capital cities. This is largely down to the COVID influenced ‘flight to regional areas’ phenomenon - but even metro markets have staged a comeback in 2021, driven largely by an uptick in consumer confidence - though much remains fragile about the current recovery.
Before we get into the countdown, let’s start by looking at how you can identify a suburb that is experiencing high growth, specifically what data indicators and factors to track when you begin your research.
How to identify a suburb with high growth potential
Shortlist your investment properties by identifying suburbs and postcodes where as many of the following factors are present, specifically:
Rising property values, preferably stable growth in house prices over a relatively short time frame - typically a few years, though it will depend how long you intend to invest for.
A declining days on market (DOM) metric, is a good sign that there is strong demand in a suburb - as properties don’t list for too long. You do need to know your local market, as DOM varies widely by market and location.
Rising rental yields, which details how much income/rent a property could fetch over a timeframe, as a proportion of its value. Rising rental yields are a good sign that there is strong demand for rental accommodation.
High clearance rates at auctions, which is detailed as a percentage of the number of properties sold over a week/month.
Low vacancy rates indicates there is strong demand for rental property in an area.
You can also track other economic indicators, like government investment in infrastructure or other job creation initiatives that will boost the local economy.
Top 10 growth suburbs in Australia right now
With this knowledge let’s cast out eye over the country’s top 10 best-performing growth suburbs, based on year-on-year performance.
1. Noosa Heads, Queensland 4567
Noosa Heads is part of a cluster of Sunshine Coast hotspots that have found favour with retirees and interstate migrants looking for cheaper property, a laid back lifestyle and better weather. Houses dominate here, with three bedrooms around the $1.3 million median mark, which fetch in the region of $780/week rent. This market is currently ‘hot’ with realestate.com.au reporting that 1321visits per property, versus an average of 859 for the state.
- Median house price: $1,416,000
- Compound growth 5 yrs: +12.5%
2. Bendigo, Victoria 3550
With a median house price over the last year of $550,000, Bendigo is well placed to benefit from the shift to more affordable regional lifestyle locations - and a compound growth rate of +8.5 per cent over five years confirms this potential. These are typically within striking distance of major cities, but with enough amenities and a local economy - here it is tourism, medical services, agriculture, forestry and mining - to make them self sufficient and liveable. You can expect to pay as little as $440,000 for a two-bedroom house here with a rental return of $320/week.
- Median house price: $550,000
- Compound growth 5 yrs: +8.5%
3. Ettalong Beach, New South Wales 2257
Ettalong Beach, on the NSW Central Coast, is another regional location with bright prospects, given its proximity to Sydney though it also has a growing local economy with manufacturers moving to the area. Transport links are great, and it is also close to Erina Fair Shopping Centre - one of the biggest regional shopping centres in the country. With a compound growth of +9.3 per cent over the past five years, prospects for growth are strong, with four-bedroom homes renting in the region of $600/week.
- Median house price: $935,000
- Compound growth 5 yrs: +9.3%
4. Blacktown, New South Wales 2148
If you are after an investment property (house) under the magic $1 million mark in Sydney, Blacktown is your suburb. The main attraction here is median house prices ranging from $690,000 for a two-bedroom house and $845,000 for a four-bedroom house. Houses in Blacktown rent out for $410/week with an annual rental yield of 2.8%, while units rent for $420/week with a rental yield of 3.1%.
- Median unit price: $785,000
- Compound growth 5 yrs: +3.1%
5. Urunga, New South Wales 2455
Urunga is a small town 27km south of Coffs Harbour where the median house price is currently $605,500. If you are a landlord here you can expect to take $380 per week rent from your tenants, for an annual rental yield of 3.3%. Houses have advanced 7.4% over five years, and you can expect a 3 bedroom house to cost $576,000.
- Median unit price: $605,500
- Compound growth 5 yrs: +7.4%
6. Blackburn, Victoria, 3130
Blackburn, a leafy suburb in Melbourne’s east with lots of parks and good schools has proved a drawcard for buyers looking for a family-friendly environment. With a median house price of $1,520,000 you can expect $480/week for an annual rental yield of 1.6%. Units are currently priced at a median of $755,000, and rent for $388/week with a rental yield of 2.7%.
- Median house price: $1,520,000
- Compound growth 5 yrs: +4.8%
7. Wonthaggi, Victoria 3995
Wonthaggi, 137 km south-east of Melbourne in South Gippsland is a former coal town that has worked hard to evolve its economy with a wind farm, salination plant; and the popular Bass Coast Rail Track providing much-needed stimulus to the local economy. The median house price has advanced a very respectable +12.1% over five years for a median of $437,000. You can expect a weekly rent of $365 from a house in Wonthaggi, with an annual rental yield of 4.3%. This is another regional market which is affordable - particularly when compared to prices in many of our capital cities.
- Median house price: $437,000
- Compound growth 5 yrs: +12.1%
8. East Devonport, Tasmania 7310
Devonport in the north of Tasmania is riding on renewed interest from investors and people looking for an alternative to big capital cities, and the suburb of East Devonport is a beneficiary of this trend. The median house price here is just $280,000, and Houses in the suburb rent out for $290 per week, with an annual rental yield of 5.6%. Growth over 5 years is an impressive +6.7 per cent for houses advancing, though units have been stronger over this timeframe, growing +8.0 per cent.
- Median house price: $280,000
- Compound growth 5 yrs: +6.7%
9. Orange, NSW, 2800
Orange deep in the Central Tablelands of NSW has all the rural idyll boxes ticked, which are vineyards, lots of fresh air - and relatively affordable property - for metro investors at least. With a median house price of $530,000 and a compound growth rate of +9.2 per cent over five years - its diversified local economy in education, health and community services makes it a smart bet all round. You can expect in the region of $430/week rent from a house in the town.
- Median house price: $530,000
- Compound growth 5 yrs: +9.2%
10. Temora, New South Wales 2666
Temora, population 4,054, is a small rural town in NSW’s Riverina some 80 km north of Wagga Wagga and 418km from Sydney. Here the main attraction is a median house price of just $305,000, and where you can expect rent of $280/week for a house, for a respectable annual rental yield of 4.8%.
- Median house price: $305,000
- Compound growth 5 yrs: +4.2%