Top 34 suburbs worth buying into before negative gearing changes
New research has found 34 suburbs around the country that are worth investing into before the Labor Party’s potential negative gearing changes are introduced to the market.
The analysis, conducted by Sell or Hold, found the top suburbs in major cities across the country with a yearly growth forecast of over 5 per cent, which found each result pointed to established houses being a better investment for growth.
Jeremy Sheppard, head of research at Sell or Hold, claimed that investors gravitate to properties with higher changes of long-term capital growth, which tend to have lower yields.
It is these property types that will take the biggest hit to their prices if the Labor government wins at the upcoming federal election and introduces its negative gearing policy, which will not allow new purchases of existing property types to be negatively geared.
“Investors should buy properties because of their capital growth potential over the long term, not because they can claim negative gearing benefits for a temporary period of time,” Mr Sheppard said.
“Negative gearing currently offers the owner a legal taxation deduction for anyone who invests in income-producing assets, including established property.
“However, those investors quickly start paying tax when their property becomes positively geared after only a few years – something that Labor seems to not want to talk about.”
The suburb that saw the highest annual growth prediction was Adelaide’s Parkside with an expected rise of 7.8 per cent over the year.
“Parkside is only a few kilometres south of the Adelaide CBD, plus it borders the southern park lands, so it might be the reason why houses in that suburb are in strong demand from buyers,” Mr Sheppard said.
Following this was Brisbane’s Belmont with growth expectation of 7.6 per cent, followed by Mansfield and Stafford Heights, also located in Brisbane, which both have growth prediction of 7.2 per cent.
Demand was high for these two latter suburbs due to Mansfield having Mansfield State High School, which is held in high regard, and Stafford Heights due to its gentrification and renovations of post-war properties.
Despite Sydney and Melbourne’s recent declines, Mr Sheppard added there are still some suburbs set for high growth.
“Woronora might be some 27 kilometres from the Sydney CBD, but it is also located on both sides of the picturesque Woronora River, which is why so many people want to live there,” he said.
“Likewise, in Caulfield North in Melbourne, which is one of the city’s premier suburbs, partly due to Caulfield Park, which is 26 hectares in size and has a number of playgrounds and sport fields.”
The full list of 34 housing markets that are predicted to be hit hardest by Labor’s proposed negative gearing changes, according to Sell or Hold, are:
|
Area |
Suburb |
Median house price |
Yield (as a percentage) |
Annual growth forecast |
|
Canberra - Queanbeyan |
Florey |
$633,056 |
3.91 |
6.3 |
|
Canberra – Queanbeyan |
Nicholls |
$822,483 |
4.09 |
6.3 |
|
Canberra – Queanbeyan |
Holder |
$680,741 |
4.13 |
6 |
|
Canberra – Queanbeyan |
Amaroo |
$671,222 |
4.22 |
6 |
|
Canberra – Queanbeyan |
Palmerston |
$629,081 |
4.22 |
6 |
|
Sydney |
Woronora |
$1,065,535 |
3.45 |
6.2 |
|
Sydney |
Leichhardt |
$1,362,692 |
2.95 |
6 |
|
Sydney |
Drummoyne |
$1,950,245 |
2.27 |
5.5 |
|
Sydney |
North Narrabeen |
$1,431,059 |
3.19 |
5.7 |
|
Sydney |
Marrickville |
$1,356,440 |
2.88 |
5.5 |
|
Brisbane |
Belmont |
$687,452 |
3.65 |
7.6 |
|
Brisbane |
Wilston |
$972,139 |
2.8 |
6.9 |
|
Brisbane |
Mansfield |
$673,776 |
3.77 |
7.2 |
|
Brisbane |
Stafford Heights |
$603,610 |
3.99 |
7.2 |
|
Brisbane |
Stafford |
$621,850 |
3.63 |
6.9 |
|
Adelaide |
Parkside |
$798,040 |
3.19 |
7.8 |
|
Adelaide |
Highgate |
$889,678 |
3.5 |
6.9 |
|
Adelaide |
Beulah Park |
$797,289 |
3.04 |
6.7 |
|
Adelaide |
Findon |
$513,091 |
3.71 |
6.9 |
|
Adelaide |
Rosslyn Park |
$840,090 |
3.06 |
6.5 |
|
Hobart |
Tranmere |
$705,145 |
3.92 |
6.4 |
|
Hobart |
Mount Nelson |
$619,604 |
4.2 |
6.4 |
|
Hobart |
Sandy Bay |
$917,306 |
3.6 |
5.2 |
|
Hobart |
South Hobart |
$658,118 |
3.97 |
5 |
|
Melbourne |
Caulfield North |
$1,695,551 |
2.36 |
6 |
|
Melbourne |
St Kilda East |
$1,228,295 |
2.9 |
6 |
|
Melbourne |
Ivanhoe |
$1,319,188 |
2.26 |
5.5 |
|
Melbourne |
Flemington |
$931,328 |
3.08 |
5.7 |
|
Melbourne |
Maribyrnong |
$940,028 |
2.79 |
5.5 |
|
Perth |
Mount Hawthorn |
$892,196 |
2.98 |
6.1 |
|
Perth |
Willetton |
$697,337 |
3.06 |
5.6 |
|
Perth |
Doubleview |
$718,522 |
3.4 |
5.6 |
|
Perth |
Floreat |
$1,316,702 |
2.94 |
5.4 |
|
Perth |
Wembley |
$979,859 |
3.15 |
5.4
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