NSW and QLD have a number of locations that could hold up in value in the event of a recession according to an expert.
Rising interest rates have led to falling property values across the country, however, there are still a number of locations that could experience price growth despite softening economic conditions.
Founder of property advisory Hello Haus, Scott Aggett said that while national property values are down 7.2 per cent over the past 12 months, there will be areas where the right investment will continue to make excellent returns, whether it be for a homeowner or investor.
Mr Aggett said eight suburbs across NSW and QLD look like they should be able to weather an economic downturn, while one location in South Australia also made the list.
According to Mr Aggett, the locations that are likely to hold up best feature a high portion of owner-occupier homes, low days on market, tight vacancy rates and a long-term history of capital growth.
He said East Toowoomba in QLD, located 1.5km east of Toowoomba’s city centre and 90 minutes to Brisbane city, benefits from established infrastructure, the ongoing development of surrounding suburbs, plus planned billions in rail and road network upgrades.
“$730,000 will purchase a three- or four-bedroom character-style home that has been updated and sits on a 600sq m allotment,” Mr Aggett said.
Burleigh Waters was another QLD location that Mr Aggett says will benefit from population inflows.
“This Gold Coast hotspot location has been gaining prominence among prestige homebuyers of late,” he said.
“Rising net internal migration is seeing plenty of southern buyers flock to the area.
“For $1.4 million you can secure a renovated four-bed, two-bath, two-car low-set brick home on a 600sq m lot.”
Mr Aggett said Thornlands in QLD could benefit from the mix of planned infrastructure projects worth over $300 million.
While Reedy Creek is also set to benefit from more than $7 billion in infrastructure spending including the M1 Varsity Lakes to Tugun upgrade.
Across NSW, Mr Aggett said East Albury would perform well given its location and the fact that it’s easy to access roughly 75 per cent of the Australian population.
“There are myriad property types available for purchase from contemporary and established dwellings through to attached housing,” he said.
He also said at a median of $1.725 million, Leichhardt offers a relatively low entry-level into the Inner West of the Sydney property market.
“This suburb is positioned 6.5km east of the Sydney CBD and is set to benefit from billions in infrastructure spending including the $3.9 billion Rozelle interchange and the $750 million Royal Prince Alfred Hospital redevelopment,” he said.
While Lilyfield is another suburb in the Inner West of Sydney, located six kilometres west of the Sydney CBD and fronting the Parramatta River that will continue to attract buyer interest.
“Lilyfield is one of the few suburbs under $2.5 million within 10km of the CBD that has a gross yield over two per cent with high levels of detached house scarcity,” he said.
Outside of Sydney in Wollongong, Bulli is a beachfront address positioned 10km north of Wollongong’s CBD that’s worth paying attention to Mr Aggett said.
“Bulli Beach is a popular destination for beachgoers and a drawcard for new residents,” he said.
“Access to and from Bulli is simple given the Princess Highway traverses the suburb.”
Meanwhile Banksia Park, in South Australia, was the only suburb Mr Aggett named outside of NSW and QLD.
“Positioned 16km north-east of Adelaide’s CBD and set to benefit from over $6 billion in infrastructure spending, including the Adelaide Airport expansion, this suburb is dominated by 30-to-40-year-old brick homes on traditional size allotments,” he said.
“For $655,000 you can buy a three-bed, two-bath home on 700sq m of land.”
Mr Aggett said while there are some dire predictions doing the rounds he feels the economy is far more robust than some analysts would have us believe.
“The Australian property market comprises myriad locations, price points and property types,” he said.
“By selecting the right location and asset, you will hedge against any inflation and enjoy superior returns.”