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Australia’s best under-$500,000 capital city growth suburbs: LocationScore

New research has identified suburbs in each capital city priced under $500,000 where rising demand is primed to push values higher.

Property research site LocationScore.com.au have studied eight key demand drivers across the nation’s capital cities to help unearth 24 affordable locations where buyers are ready to drive values up.

“These are the markets where demand exceeds supply, making price gains more likely,” LocationScore’s Director of Research Jeremy Sheppard said.

Mr Sheppard took the top rated LocationScore data and hand-picked three suburbs in each capital with the best prospects for sub-$500,000 buyers.

“These suburbs appear to be at the start of a value growth phase and are priced accessibly so budget-conscious investors can take advantage.

“There’s no doubt affordability is a key measure when buyers are looking to invest.

“Our analysis proves you don’t need a war chest of millions to find real estate gold in our large cities.”

LocationScore analysed suburbs in every Australian capital city where the median house or unit price was under $500,000.

It then scored each suburb and sector out of 100 based on eight key indicators* that quantify demand, supply and growth prospects – highlighting those where relative demand is really ramping up.

“We always suggest investors use LocationScore as a short-listing tool for moretargeted  research.”

Mr Sheppard filtered results further, looking to remove any outcomes that could be subject to statistical anomaly.

“Based on this mix, we’ve listed the three affordable suburbs in each capital city with the greatest potential, so low-price buyers can stake their claim on the market as well as make the most of any future price growth,” Mr Sheppard said.

CITY-BY-CITY ANALYSIS

SYDNEY

StateSuburbPost CodeProperty TypeLocationScore (out of 100)LocationScore ratingMedian price
NSWRICHMOND2753Units66Good$441,996
NSWJAMISONTOWN2750Units60Maybe$422,348
NSWLAKEMBA2195Units59Maybe$427,617

There has been a lot said about Sydney’s unaffordable housing market, but LocationScore has unearthed three suburbs where you can purchase property below $500,000, be within a commutable distance of major employment and have above average prospects for price growth.

“They provide an excellent opportunity for those at the price conscious end of the market to take advantage of the Harbour City,” Mr Sheppard said.

Richmond is positioned just 20 kilometres north west of Sydney’s second CBD, Parramatta, and is able to take advantage of the conscious uptick in infrastructure spending that will see this region continue to grow.

And with a unit median price of just over $440,000, it’s a relative steal in Sydney terms.

“Affordability-motivated buyers will continue to make Richmond a ‘must watch’ suburb,” Mr Sheppard said.

“Similarly, Jamisontown, which is 31 kilometres west of Parramatta, can lay claim to being one of Sydney’s most affordable addresses with excellent growth potential in a region that’s on the up.”

For those looking closer to the Sydney city centre, Lakemba units priced at a median of $427,617 offer an interesting option according to Mr Sheppard.

“Sellers are in no panic and buyers are making decent offers,” he said.

“And when you consider Lakemba is just 13 kilometres from the heart of town, you can see why it’s popularity will only improve,” he said.

Mr Sheppard said the unit markets in Richmond, Jamisontown and Lakemba were healthy with demand still ahead of supply.

“Sellers are getting the prices they ask for more often than not in these locations, so expect growth to marginally exceed the national average.”

MELBOURNE

StateSuburbPost CodeProperty TypeLocationScore (out of 100)LocationScore ratingMedian price
VICHALLAM3803Units73Good$400,031
VICKINGSVILLE3021Units72Good$363,313
VICHEIDELBERG WEST3081Units69Good$486,289

Melbourne has put on a promising performance over recent years, so finding affordable property with potential is becoming tough, according to Mr Sheppard.

That said, Melbourne has three excellent prospects within easy reach of the city’s CBD.

Hallam at 32 kilometres south west of the CBD and 15 kilometres from Port Phillip Bay has a unit median of $400,031.

It has easy access to the city centre via rail and road networks, he said.

“Hallam is a sellers’ market so buyers will need to move quickly, but for those who do get in, the next few years look bright,” he said.

“We expect to see Hallam experience good capital growth in the immediate future.”

Kingsville sits just nine kilometres west of the city with a very affordable unit median of $363,313.

“Kingsville’s close proximity to town and low buy-in price may be why demand exceeds supply,” Mr Sheppard said.

“Older style units in walk up complexes offer excellent potential and strong returns, although there are a number of new apartment projects in the suburb, too.”

Heidelberg West is 10 kilometres to the northeast of Melbourne central and has a unit median of just $486,289.

“The northern sector of Melbourne has been a hot growth zone and LocationScore analysis shows Heidelberg West will continue to see good news for property buyers,” he said.

“Heidelberg West, along with Hallam and Kingsville, has also seen extraordinarily good auction clearance rates – a sure sign buyers are taking notice.”

BRISBANE

StateSuburbPost CodeProperty TypeLocationScore (out of 100)LocationScore ratingMedian price
QLDDEAGON4017Houses66Good$486,165
QLDCAPALABA4157Houses66Good$486,739
QLDINALA4077Houses63Good$373,783

Brisbane’s steady-as-she-goes rising market is likely to continue, according to LocationScore.

An increase in interstate migration numbers might help ramp up the inner-city’s pricier real estate beyond the reach of affordability-motivated buyers, too, said Mr Sheppard, so finding affordable prospects further out could prove critical for purchasers.

For those looking to get in and enjoy some upside potential, Deagon in the city’s north is an excellent prospect.

“There’s been a resurgence of interest in Brisbane’s established northern suburbs – particularly those in proximity to water,” he said.

“Deagon has all the right ingredients for growth with gentrification under way and good public transport options available, and with a median house price of just $486,165 it’s easy to see why prices look set to continue rising.”

Capalaba to the west of town is another area worth watching.

Part of the popular Redland Shire, Capalaba’s comprehensive retail and convenience facilities have been driving demand for housing.

“For those who want to be part of the Brisbane growth story but still need to be well below $400,000, housing in Inala will also fit the bill,” Mr Sheppard said.

“The development of the comprehensive Springfield community nearby means Inala property owners can take advantage of new transport infrastructure, plus retail and community facilities, as well as easy access to major roadways.

“And with a median house price of $373,783, most market participants will find something within their budget.”

PERTH

StateSuburbPost CodeProperty TypeLocationScore (out of 100)LocationScore ratingMedian price
WACRAIGIE6025Houses59Maybe$438,413
WASHENTON PARK6008Units59Maybe$444,500
WAMORLEY6062Houses53Maybe$486,129

Perth’s market is coming back to a natural balance after softening dramatically during the past two years, and bargain-hunting buyers will find plenty of potential in Craigie, Shenton Park and Morley, according to Mr Sheppard.

“Craigie houses, at a median of $438,413, are an enticing opportunity for buyers. It’s just 10 kilometres north of the CBD and within a stone’s throw of the beach.

“The Mitchell Freeway and Whitfords train station are close by and offer excellent transport options as well.”

Shenton Park housing is similarly priced at $444,500 and sits west of Subiaco – just five kilometres from the CBD.

“Apart from its central location and excellent facilities, Shenton Park is home to Shenton College, as well as a teaching and rehabilitation hospital, a health science campus of Curtin University, and two private hospitals.”

Morley is positioned eight kilometres northwest of the CBD, so it’s also quite central.

“Morley’s housing median of $486,129 is very attractive, and with established commercial, retail and transport options on hand, residents are well serviced.”

ADELAIDE

StateSuburbPost CodeProperty TypeLocationScore (out of 100)LocationScore ratingMedian price
SAQUEENSTOWN5014Houses73Good$397,887
SAINGLE FARM5098Houses71Good$336,729
SAALBERT PARK5014Houses69Good$439,519

Cautious optimism is probably the best way to describe real estate markets in the City of Churches, according to LocationScore, and affordability will continue to see a number of suburbs thrive, with value growth expected to be well above average.

“Queenstown, Ingle Farm and Albert Park are all hot prospects with increased relative demand,” Mr Sheppard said.

“Queenstown is just 10 kilometres north of the CBD and moments from the foreshore – and with housing below $400,000, why wouldn’t affordability buyers be looking to get in?”

Albert Park is similarly positioned, while Ingle Farm is 12 kilometres north west of town.

“These three suburbs are sellers’ markets, so buyers do need to move quickly. There is strong demand from buyers yet not enough properties to give them time to be choosey,” Mr Sheppard said.

“That said, I expect good capital growth in the immediate future for all these addresses.”

HOBART

StateSuburbPost CodeProperty TypeLocationScore (out of 100)LocationScore ratingMedian price
TASMORNINGTON7018Houses87Excellent$332,461
TASWARRANE7018Houses81Excellent$286,953
TASGEILSTON BAY7015Houses76Good$420,832

There’s no doubt Hobart has been an outstanding performer over the past year or so. It’s stunning natural attributes, strengthening economy and overall affordable real estate have all played into the mix and boosted prices.

“For those who are concerned they’ve missed the Hobart growth period – good news! We’ve found three locations with brilliant upside.”

Mornington houses have a median price of just $332,461 and with a LocationScore of 87 out of 100, their price growth potential is excellent.

“Warrane has terrific numbers highlighting likely gains in property value. For a start, houses have a median of just $286,953, so why wouldn’t affordability-driven buyers be flocking to the area?”

Geilston Bay is another Hobart suburb set for value increases, according to LocationScore.

“Positioned on the banks of the River Derwent, the suburb is a five-kilometre boat ride for Hobart’s centre.”

CANBERRA

StateSuburbPost CodeProperty TypeLocationScore (out of 100)LocationScore ratingMedian price
ACTCHARNWOOD2615Houses82Excellent$460,825
ACTNGUNNAWAL2913Units76Good$412,991
ACTO'CONNOR2602Units71Good$486,886

Canberra’s property market has been a consistent performer and while real estate can be relatively expensive, there are pockets of affordability with strong potential.

“Among one of the most promising locations across the country for sub-$500,000 property is housing in Charnwood,” Mr Sheppard said.

“With a median of $460,825, buying in isn’t too taxing for most investors.”

Charwood is 15 kilometres north of the CBD toward the urban fringe of the capital.

For unit buyers, both Ngunnawal ($412,991) and O’Conner ($486,886) should also be on the radar, according to LocationScore

DARWIN

StateSuburbPost CodeProperty TypeLocationScore (out of 100)LocationScore ratingMedian price
NTWOODROFFE830Houses61Maybe$386,238
NTGRAY830Houses53Maybe$364,044
NTLARRAKEYAH820Units50Maybe$447,033

Darwin’s property success has faded over recent years as major projects finished up and employment demand softened, according to Mr Sheppard.

“Our analysis indicates Darwin’s market overall has some way to go in its current soft phase,” he said.

Despite this, there are suburbs locals should consider if they’re keen to invest under $500,000 and enjoy potential capital gains on the back of reasonable demand.”

Woodroffe is situated in Palmerston – the region’s ‘second capital city’ – and has houses priced at a median of $386,038.

Houses in Grey and units in Larrakeyah also offer reasonable prospects, Mr Sheppard said.

He said sellers in these three suburbs aren’t panicking and buyers are making reasonable offers.

“The markets are healthy, but growth really is a long-term prospect.”

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