Hottest 100 suburbs for 2023 revealed

Realestate.com.au’s first “Hot 100” list released on Thursday, compiled by industry experts including Ray White managing director Dan White and PropTrack economist Anne Flaherty, identifies 100 suburbs around the country with the best growth prospects in 2023.

It’s billed as an independent overview of likely market performance in the coming year and beyond, with suburbs nominated based on “various mid- and long-term growth drivers, including family appeal, gentrification activity, infrastructure investment, the level of amenity and affordability”.

“Victorian suburbs are most prevalent on the list, which may seem surprising given the larger price falls to date, but remember that migration is lifting in the state,” said Cameron Kusher, director of economic research at PropTrack.

He added that Victoria’s punishing Covid lockdowns throughout 2020 and 2021 mean property price growth in Melbourne has been more moderate than the other capitals.

“New South Wales and Queensland suburbs are also prevalent on the list, which speaks to the medium- to long-term fundamentals of these markets, where supply is low and demand is strong,” he said.

Twenty-nine of the top 100 were Victorian suburbs, comprising a mix of inner-city, outer-suburban and regional areas.

NSW and Queensland each had 24 suburbs with a similar mix, South Australia accounted for nine spots, Western Australia seven, ACT five, and Tasmania and Northern Territory each had just one suburb in the list.

For buyers looking for a bargain, the most affordable suburb was Mandurah in WA’s Peel region, an hour south of Perth, where the median house price was $350,000.

“It’s super, super cheap,” said Ms Flaherty.

The seaside suburb is home to an older demographic of mainly 64- to 74-year-olds.

“It boasts strong population growth, affordable homes, and an attractive seaside lifestyle,” said property buyer Kate Hill from Adviseable.

“There are some transport improvements taking place in the area that will improve connectivity, like the $110 million new Mandurah Bridge and the $80 million Lakelands train station.”

The Hot 100 list also includes some suburbs that might raise eyebrows, including Sunshine West in Melbourne.

Ms Hill admits the area doesn’t have the best reputation and has been known in the past for its high crime rate – but says that is slowly changing.

She said affordability pressures in markets closer to the city are seeing buyers pushed out, bringing with them demographic change.

“This part of Melbourne will benefit from being near the route of the Melbourne Airport Rail Link, which will improve connectivity,” Ms Hill said. “The Victorian government has also devised a planning vision for Sunshine to be a National Employment and Innovation hub.”

Ms Flaherty noted “gentrification is a really big one in terms of why suburbs were selected”.

“The innermost western suburbs in Melbourne are doing really well,” she said.

Mr Kusher said despite the gloomy headlines about price falls, there were locations around the country expected to defy the broader market trends.

“That’s why it’s imperative that anyone thinking of buying does their own research to understand what drives a local market and how it is likely to evolve over the coming years,” he said.

The Reserve Bank raised the official cash rate by a quarter of a percentage point this month to 3.1 per cent, marking the eighth consecutive rate rise.

Rapidly rising mortgage repayments, combined with soaring inflation, are now dominating Australians‘ worries going into 2023, a survey by Canstar found.

Worryingly, some two-fifths of owner-occupiers and more than a quarter of investors said they were not prepared for higher interest rates.

“The cash rate could reach as high as 3.85 per cent next year, pushing the average variable rate for existing borrowers up to 6.73 per cent and adding since April more than $1130 to monthly repayments on a $500,000 loan over 30 years,” Canstar group executive of financial services Steve Mickenbecker said this week.

RBA governor Philip Lowe last month apologised to Australians who took out home loans based on his assurances that rates were unlikely to rise until 2024.

“I’m sorry that people listened to what we said and then acted on that and now find themselves in a position they don’t want to be in,” Dr Lowe told a Senate estimates hearing.

Ms Flaherty said the 100 suburbs in the list were bucking the broader market trend due to young buyers being pushed out.

“If you think about interest rates, for the average buyer the amount they can borrow has declined by about 25 per cent,” she said.

“They are looking a bit further afield. We’re seeing a growing cohort of buyers priced out of inner and middle-ring suburbs, a lot of that first homebuyer demographic is searching in these more specific up-and-coming areas. That means a lot of these areas aren’t seeing the price declines we’re seeing in the broader market.”

HOT 100 SUBURBS

New South Wales

• Alexandria, Arncliffe, Ashfield, Cessnock, Claremont Meadows, East Tamworth, Frenchs Forest, Glenmore Park, Hurlstone Park, Kingsford, Kingswood, Marrickville, Matraville, Mayfield, Mona Vale, New Lambton, Paddington, Prestons, Quakers Hill, South Penrith, St Clair, Turramurra, Tweed Heads, Yamba

Victoria

• Alfredton, Altona, Ballarat Central, Balwyn North, Belmont, Berwick, Bundoora, Cranbourne, Dandenong North, Deer Park, Ferntree Gully, Footscray, Forest Hill, Frankston, Geelong West, Glenroy, Hadfield, Heidelberg Heights, Highett, Kangaroo Flat, Keilor East, Kennington, North Melbourne, Pakenham, Reservoir, Ringwood, Sunshine West, Sydenham, Taylors Lakes

Queensland

• Bli Bli, Boondall, Bracken Ridge, Burleigh Heads, Crestmead, Deception Bay, Eagleby, Glenvale, Goodna, Harristown, Kearneys Spring, Kelvin Grove, Mermaid Waters, Morayfield, Nambour, Petrie, The Range, Redbank Plains, Rothwell, Sippy Downs, Springfield Lakes, Toowong, Woolloongabba, Yamanto

South Australia

• Blakeview, Brooklyn Park, Christies Beach, Craigmore, Kensington, St Marys, Thebarton, Torrensville, Woodcroft

Western Australia

• Butler, Carlisle, Cottesloe, Joondalup, Mandurah, Subiaco, Wembley

ACT

• Curtin, Narrabundah, Red Hill, Scullin, Watson

Tasmania

• North Hobart

Northern Territory

• Bayview

Source: Realestate.com.au