Finder’s Real Estate Investment Index Reveals Suburbs With Highest Growth Potential

As Australia’s property market heads into uncharted territory, some suburbs will weather the storm better than others, according to a new index from Finder.

The new from the Finder Real estate investment index uses a range of data inputs to predict price stability in each suburb of major Australian cities, including Sydney and Melbourne, with Brisbane, Adelaide, Perth and Hobart due out next week.

The index shows that homes in Cammeray, Redfern and Wahroonga in Sydney have the highest potential for price stability.

In Melbourne, homes in Alphington, Aberfeldie and Carnegie show the highest potential, according to the index.

Graham Cooke, head of consumer research at Finder, said there’s nothing quite like Finder’s real estate investment index available for free on the market.

“Australians love property, but for many, knowing where to invest is the hardest part.

“We developed the index as an interactive tool to help Australians understand the investment potential of suburban areas in their city.”

Sydney: Top Rated Suburbs by Property Type

Suburb Median price Suburban rating (/100) Market demand factor Demographic factor Property Factor
Houses
cammeray $3,495,000 100 40 35 25
Wahronga $2,467,500 97 34 37 25
red fern $1,880,000 97 39 33 25
Apartments
Waverton $1,405,000 96 42 34 21
Rozelle $1,397,500 95 34 37 25
Paddington $1,150,000 95 34 35 25
Source: Finder Real Estate Investment Index

Melbourne: Top Rated Suburbs by Property Type

Suburb Median price Suburban rating (/100) Market demand factor Demographic factor Property Factor
Houses
Alphington $2,251,000 92 24 34 35
Aberfeldie $1,830,000 91 25 34 32
Carnegie $1,770,000 91 25 30 35
Apartments
Aberfeldie $675,000 91 22 34 35
Yarraville $770,000 91 23 36 32
McKinnon $1,140,500 91 25 32 34
Source: Finder Real Estate Investment Index

Suburbs are scored out of 100, with a high score indicating very high expected performance and 0 indicating very weak or negative market performance.

The final score is calculated based on 3 factors: market demand, population development (including income, income growth and unemployment) and real estate (historical growth in house prices and current prices).

Waverton, Narraweena and Davidson apartments in Sydney scored highest in terms of potential market stability.

In Melbourne, units from Aberfeldie, Yarraville and McKinnon rank first.

Cooke said the real estate investment index is intended to be an indicator of relative market strength, rather than real estate prices themselves.

“The best performing suburbs in the index are those that are most likely to hold their value, rather than suddenly increase in price.

“Our index is intended to highlight potential suburbs in your investment area that might be worth a closer look.”

Interestingly, half of Sydney residents (50%) expect property prices in their area to rise over the next 12 months, according to Finder’s Consumer Sentiment Tracker.

In Melbourne, more than half of residents (56%) expect property prices in their area to rise over the next 12 months.

Cooke said real estate investing is a way to build your wealth.

“Although real estate is generally considered a lower risk asset than other options such as stocks, as with any investment, it does carry a degree of risk, especially in today’s market.

“Before taking the plunge, you need to carefully weigh the benefits and risks to decide whether or not this will be a viable investment for you,” Cooke said.

Find out which suburbs are set for strong price growth in Sydney and Melbourne.