Yahoo Finance The top suburbs for property investors right now
The top suburbs for property investors in the two biggest cities have been revealed, with Cammeray in Sydney and Alphington in Melbourne flagged as the top suburbs for house price growth.
The median house price in Cammeray in Sydney’s north is $3.49 million, while Alphington in Melbourne’s north-east has an average house price of $2.25 million.
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The June update to Finder’s Property Investment Index also identified the inner-city suburb of Redfern, which has a median house price of $1.88 million, as a top spot for price growth, followed by Wahroonga on the upper north shore, which has a median house price of $2.46 million.
Waverton on the lower north shore was awarded the top suburb for units in Sydney (median price $1.4 million), with Narraweena in northern Sydney and Davidson on the northern beaches taking out the other top spots.
In Melbourne, Aberfeldie in the north-west, which has a median house price of $1.83 million, also topped the list for house price growth. Units in the area are also set for high growth, ranked as the second-best market in the city in this category.
Carnegie in the south-east came in third place, with a median house price of $1.77 million.
Aberfeldie, Yarraville and McKinnon were identified as the best suburbs for unit price growth, as of June 2022, in Australia’s second-biggest city.
Investors and rising interest rates
Richard Whitten, Finder home loans expert, said rising interest rates were hitting borrowers quite hard.
"This is true for investors too. As borrowing gets more expensive, property prices are almost certainly going to fall," he said.
He said falling house prices were likely to hit Sydney hardest because “there's much more room for prices to fall in Sydney”.
“It's also worth noting that more expensive, higher-value properties may be more affected for the same reason."
However, Whitten said if interest rates remained high and the Sydney market cooled down, this would likely work in some investors’ favour.
“An investor with steady income and existing property wealth will be well-placed to make advantageous investment choices," he said.
"Less-cautious, more over-extended investors may find themselves struggling to pay off expensive loans when the value of their investments is falling.”
How Finder’s Property Investment Index works
The index takes several data points into account to predict how much property prices in these areas are likely to grow.
This includes market demand, which is based on sales turnover, average days on the market, vacancy rates, building approvals and distance from the CBD.
Population is also considered, including growth rates, income growth and unemployment rates.
The index also factors in historical property price growth and current property prices.
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