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The bulletproof property hotspots in every capital city over the last 10 years

Sydney, Australia - 3rd June, 2019: New housing construction on the outer suburbs of Sydney.

When it comes to buying property, there’s a piece of uncontested wisdom that must be followed: location, location, location.

Where you buy a home matters, and while property experts are quick to earmark where the next ‘hotspot’ will be, the track record of some suburbs speak for themselves.

According to research by CoreLogic and the Property Investment Professionals Association of Australia (PIPA), Lakemba in Sydney’s south-west was revealed as the city’s best-performing suburb with average annual growth of 8.4 per cent over the last 10 years.

In Melbourne, Rockbank and Mount Cottrell saw 7.9 per cent annual growth over a 10-year period, while Prospect was Adelaide’s best-performing suburb with annual growth of 3.4 per cent.

Casey, on the outskirts of Canberra, was named as the highest-performing suburb there for annual growth over a 10-year period at 6.4 per cent, and Hobart’s Bridgewater and Gagebrook saw sustained annual growth of 5.2 per cent over a decade.

Growth in Perth was much more modest at 0.6 per cent for the regions of Riverton, Shelley and Rossmoyne, while Darwin’s best-performing suburbs in the last decade – Rosebery and Bellamack – grew by 3.2 per cent each year.

(Source: CoreLogic)

According to PIPA chairman Peter Koulizos, the results demonstrated that a mix of prestige and affordable suburbs performed well over the decade.

“There are submarkets within markets which operate to the beat of their own drums, usually because of consistently strong demand from buyers keen to live or invest in those locations,” he said.

Investing in the housing market is a waiting game that requires a long-term strategy, said CoreLogic head of research Tim Lawless.

“Short-term movements are less important than the longer-term trends, which typically see housing values moving through a cycle where values will rise, fall and track sideways,” he said.

“The past 10 years has seen areas of Sydney and Melbourne outperform most other markets thanks to strong economic conditions and high rates of migration, which has fuelled housing demand, however, such high rates of capital gain have eroded housing affordability and compressed rental yields.”

Where will the best-performing suburbs be in the next decade?

Where Sydney and Melbourne saw high levels of annual capital growth at 5.5 per cent and 4.9 per cent over the last decade, the cities now poised for growth are the ones that are currently more affordable, according to Koulizos.

“Annual growth of between 1.3 per cent to 2.8 per cent over the past decade is part of the reason why so many investors and property investment experts are eyeing Brisbane, Adelaide and Canberra as potentially having the best capital growth prospects over the next 10-year period.”

Sydney and Melbourne has performed so well over the last decade thanks to strong economic conditions as well as high rates of migration that has pushed up housing demand, Koulizos said.

“However, such high rates of capital gain have eroded housing affordability and compressed rental yields … Just as they were over the earlier decade where, for example, mining regions and regional coastal markets where some of the strongest performing areas.”

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