In his recent column in Switzer, John McGrath discusses the benefits of buying in the inner suburbs of your city.
Here’s what he said:
Want to buy a home or investment in the inner city?
So does pretty much everyone else, so odds are you’re going to pay a premium.
Statistics from Domain Group published earlier this year showed house price growth within a 10km radius of Sydney’s CBD had outstripped growth in outlying areas over the past decade by a significant margin, with average prices up 71.5% in the inner ring compared to 48.4% in the middle to outer rings.
No surprise here.
Buy a property in the inner ring, hold it for the long term and you’re onto a winning strategy.
Supply is restricted in the inner city and there is no end of demand from both local and overseas buyers who want to live close to the action.
Right now though in the shorter term, statistics indicate there is more price growth happening in the middle to outer ring areas and that’s just normal market forces at work – we have a boom, the inner ring gets too hot; and people start adjusting their location criteria and go further out for better value.
If you’re still looking to buy a house or apartment in Sydney’s inner ring – or within 10km of any other capital city in Australia, a new report from CoreLogic RPData might help.
It reveals the Top 5 most affordable suburbs in your city’s inner ring.
Here is CoreLogic’s analysis of the locations of these affordable suburbs:
Sydney – all of the most affordable suburbs for houses are located south of the city close to the airport. For units, it is a bit more varied with suburbs south, east and west of the city.
Melbourne – the most affordable suburbs for houses are all over the city except the south. Unit suburbs are scattered all over too.
Brisbane – the most affordable suburbs for houses are typically in the south, the one exception is Keperra in the north-west. For units, three suburbs are south and two are north
Adelaide – the most affordable suburbs for houses are all north of the city. Unit suburbs are also all north except for Brooklyn Park.
Perth – the most affordable suburbs for houses and units are all north of the city.
Hobart – the most affordable suburbs for houses are on the eastern bank of the river except for Goodwood. Most unit suburbs are north of the city.
Darwin – the most affordable suburbs for houses and units are all north of the city.
Canberra – all of the most affordable suburbs for houses are situated in the Belconnen area. For units, all suburbs except Downer are either in the Woden Valley or Belconnen districts.
Apartments versus houses
One of the most important things to note here is how much more affordable inner city apartments are compared to houses.
Look at Sydney. The most affordable suburb for houses is Turrella in Sydney’s south with a median price of $839,676.
The median unit price in the most affordable suburb for apartments, Eastlakes, is almost half that at $484,487.
Apartments are no longer the poor cousin of houses and there is a lot of price growth to be had in this sector of the market in future years, especially given our ageing population.
If you’re an owner-occupier, you’re purchasing more for lifestyle reasons than capital growth so obviously you’ll pick the type of property that best suits your needs.
But if you’re an investor, don’t consider apartments an inferior choice to houses, especially in the inner ring.
That 10km radius around your CBD is prime investment territory.
So I believe you can buy with confidence.