In a surprising twist, property prices in high crime suburbs are beating their city’s median, new research has revealed.
Over the last 10 years, Sydney’s median property price has grown by 69.2 per cent, according to research from RiskWise Property Research.
The south-west suburb of Liverpool has seen property prices surge a whopping 108.1 per cent – nearly 40 per cent more than the growth of the median.
Bankstown, Granville, Merrylands, Punchbowl and Auburn have also outperformed the market.
In Melbourne, the 10-year capital price growth has also been 69.2 per cent.
Suburbs like Frankston, Craigieburn, Ascot Vale and Brunswick have outperformed the market by more than 10 per cent.
“Despite the stigma that’s typically attached to areas with crime issues and the potential challenges that go with that over the short term, over a reasonable timeframe this has tended to be outweighed by the combined benefits of affordability, convenience of location, and gentrification, from a housing market performance perspective,” BuyersBuyers co-founder Pete Wargent said.
While buyers aren’t exactly seeking out crime hotspots, the positives are really driving up house prices over time.
According to RiskWise chief Doron Peleg, land scarcity and an undersupply of houses in the two capital cities has also driven strong demand to high crime areas.
“Our nationwide research actually found gentrifying suburbs with high crime typically deliver strong price growth and outperform the local benchmark,” Peleg added.
“This is also consistent with the international trend where areas that had been notorious enjoyed gentrification and major price increases.”
It’s a different story for unit prices, however, with Melbourne units in high crime areas tending to underperform the market.
“The ample supply of units in popular areas over Melbourne over this recent construction cycle has kept entry prices relatively affordable, and generally speaking apartment buyers have not needed to compromise so much by moving to high crime areas,” Wargent said.
House prices across Australia dipped 0.1 per cent - their smallest decline since May this year.
CoreLogic describe the dip as a “striking turn in housing market sentiment”, but flagged an end to JobKeeper and the decreased JobSeeker boost would pose significant headwinds for the sector.
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