Australia’s top FOMO suburbs: the once-cheap suburbs now worth a ton

Adam Smith 20 September 2017 NEWS

Couple looking shocked at house prices

If you'd invested in these suburbs five years ago you could have made hundreds of thousands of dollars.

FOMO means the fear of missing out. While we all have regrets, Australia's out of control property boom makes for some really frustrating "what if?" stories. For those would be investors who never bought, we've crunched the numbers and found the suburbs in every capital city that have seen the biggest gains.

  • A quick note on methodology

Rather than focus on expensive, high-growth suburbs, we examined suburbs across every capital city that had a median house price of $500,000 or less back in 2012, making them affordable suburbs for investors. We've ranked them in order of the dollar value of capital gain.

Read on and weep, or skip ahead to your city.

Sydney

It doesn't take a genius to know an investment in Sydney five years ago would have paid huge dividends. But the harbour city has been expensive for investors for some time. We looked at suburbs the average investor still could have accessed back in 2012.

Sefton in the Canterbury-Bankstown area comes out on top, not just for Sydney but for the whole of Australia. A $455,000 median-priced house in 2012 would be worth $920,000 today. That's an incredible $465,000 in capital gains. Assuming a 20% deposit of $91,000, you'd be looking at $374,000 of profit, not counting anything you paid in holding costs.

Melbourne

Melbourne has typically run second to Sydney when it comes to the capital growth stakes, but property values in the city seem to be showing more resilience compared to Sydney.

The most recent CoreLogic Hedonic Home Value Index showed quarterly growth of just 0.3% for Sydney, compared to 1.9% for Melbourne. You'd certainly be smiling if you'd bought in the southeast suburb of Notting Hill back in 2012. The median price for a house back then was $480,000, compared to $929,000 now. That's a gain of $449,000. Less a 20% deposit of $96,000, you'd be looking at a $353,000 profit, excluding any holding costs.

Brisbane

Brisbane has been a comparatively sluggish market over the last year. With its 3% annual growth for the year to August 31, it lags behind five of the other seven capitals.

Regardless, there were still great investment opportunities in the city back in 2012. For instance, $496,000 would have bought you a median-priced house in the southern suburb of Sunnybank in 2012. That same house would now be worth $747,500 for a healthy capital gain of $251,500. Once you subtract the 20% deposit of $99,200, you'd be looking at a profit of $152,300 minus holding costs.

Canberra

Canberra has been a quietly strong performer for some time. While Sydney, Melbourne and even Hobart grab headlines for their capital growth, Canberra has managed to chalk up solid capital growth of 8% for the year to August 31.

The nation's capital has seen particularly strong growth for units. Campbell, nestled at the foot of Mount Ainslie, has performed particularly well. A $469,000 median-priced unit bought in 2012 would be worth $900,000 today for a capital gain of $431,000. After accounting for a 20% deposit of $93,800, you would have profited $337,200 excluding holding costs.

Adelaide

Adelaide has been a decent performer over the last year. August's CoreLogic figures show a 5.2% annual rise in median prices for the year to August 31.

The beachside suburb of Seacliff has performed especially well, specifically for units. A median-priced unit in 2012 would have cost a very reasonable $385,000. Today that unit would have grown in value to $700,000 for a $315,000 capital gain. Minus a 20% deposit of $77,000, you'd be looking at a profit of $238,000, not counting any holding costs.

Perth

Perth has copped a beating following the end of the resources boom. House prices in the WA capital have yet to find a floor, dropping 0.8% in August for a 2.8% annual decline.

In spite of its struggles, the city has still had pockets of profit. Wandi, 27 kilometres outside the Perth CBD, has seen strong capital growth since 2012. The suburb's median house price was $315,000, compared to $525,000 today. That equals a capital gain of $210,000. After accounting for a 20% deposit of $63,000, you would have seen a profit of $147,000, excluding holding costs.

Darwin

Like Perth, Darwin has seen its property market struggle of late. Median dwelling prices were down 4.2% for the year to August 31, making it the nation's worst-performing capital city.

But, like Perth, there are still suburbs that have escaped the rest of the city's fate. The rural outer suburb of Bellamack saw the strongest percentage growth in median house prices of any suburb on our list. Starting from a low base of $221,500 in 2012, median house prices have swelled to $612,500 for a capital gain of $391,000. Considering a 20% deposit of only $44,300 would have gotten you into the housing market back in 2012, the total profit of $346,700 excluding holding costs seems pretty impressive.

Hobart

Hobart has been one of the housing market's good news stories. Median prices in the Tasmanian capital are still affordable compared to the rest of the country, and are growing at a strong pace. Median prices were up 13.6% for the year to August 31, the most of any capital city.

The southwest suburb of Dynnyrne has been Hobart's top performer of the past five years. The median house price in Dynnyrne in 2012 was $417,500, and has grown to $610,000 today for a $192,500 capital gain. A 20% deposit for a median-priced house in 2012 would have run $83,500, leaving you with a $109,000 profit, not counting holding costs.

If reading this makes you feel like you've missed the property investment boat don't despair. There are still plenty of good areas to invest in, in both capital cities and regional centres. Check out our property investment loans page to compare your financial options, or read up on investment strategies with our guide.

The data for this piece comes from CoreLogic and was analysed by finder's resident data expert Marc Menz. Words by home loans editor Adam Smith.

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