Best performing suburbs over the past ten years

The list of greatest growth suburbs within capital city markets over the past ten years has been well and truly dominated by Perth suburbs, which has 11 of the 20 suburbs which have recorded the greatest level of average annual growth. In Brisbane the best performer was units in Tarragindi with 23.3% growth. Property Searchers' notes that there are in fact few units in Tarragindi - just 140 sales in the past 10 years, and 32 of them, or 23%, have been recent, in new developments and in excess of mid $500,000's. This would distort growth figures.

Inherently, it has been those more affordable suburbs which have witnessed the strongest growth with 13 of the 20 suburbs detailed having a current median price below $300,000. 18 of the 20 suburbs detailed enjoy a median price below $400,000. 

So what can we learn from the best performers of the last ten years?

Many of the suburbs detailed are situated on the outskirts of the capital cities and have seen strong growth, largely due to the fact that in most instances pricing has come from a very low base ten years ago. Undoubtedly new development has helped boost prices in many of these areas. However, the cause for concern will likely be the longer term capital growth prospects of these suburbs. Many are a long way from the city centre and have poor public transport amenity limited roads and scarce retail amenity. As capital city populations continue to grow the importance of being situated close to amenity will also grow.

In the regional areas, it is generally the smaller markets and those that have come off a low base that have recorded strongest growth during the last ten years.

Undoubtedly, entering early into an area where new development is set to occur can be a great strategy for making money. However, the important tactic is buying in early and selling at the right time. Whilst many of these outer more affordable areas have seen strong growth over the last ten years, the prospects for capital growth during the next ten years is likely to be much less.

Source: RP Data Property Pulse, 12 March 2010

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