Melbourne suburbs give investors best chance to double money in 10 years: RP Data survey

Melbourne has emerged as the Australian city with the greatest number of suburbs offering the potential for property investors to double their money in 10 years if house prices in these suburbs continue to appreciate at current rates.

However, across the country, there are more regional locations offering the probability of investors doubling their money in a decade than in city suburbs, according to the Autumn Investors report from RP Data.

In total, RP Data has identified 263 suburbs across Australia that have recorded average annual value growth of more than 7.2% over the past five years.

According to RP Data, a compounding growth rate of 7.2% over a 10 year period will result in a doubling of the price of an asset.

Based on this calculation, Victoria has had the greatest number of suburbs on the list with 68, of which 38 of these are suburbs in Melbourne.

Melbourne is followed by Sydney with 26 suburbs, Perth with 19 suburbs and Adelaide with 14 suburbs.

Melbourne suburbs that have recorded annual value growth of more than 7.2% over the past five years include Heidelberg West apartments (7.8%), Cairnlea houses (8.2%), Derrimut houses (14.8%) and Clyde houses (12.4%)

Sydney suburbs include Eastern Creek houses (7.4%), Hillsdale apartments (7.9%), Campbelltown apartments (8.3%) and Belmore units (8.5%)

While Melbourne, Sydney, Perth and Adelaide make up the top four regions, the rest of the top 10 comprises regional suburbs, with many having links to the mining boom such as the Hunter region of NSW, the Pilbara region of WA and Mackay and Fitzroy in Queensland.

This re-affirms the point made by hotspotting.com.au’s Terry Ryder on Property Observer that regional locations are where investors should be looking, particurlarly if they are seeking more affordable investment options.

The report found that he majority of suburbs that have recorded annual average value growth of 7.2% or greater are situated in regional areas of the country (55.7%) rather than capital cities (44.3%).

Across most states this same trend has been replicated with only Melbourne (55.9%), Adelaide (77.8%), Darwin (90.9%) and Canberra (100%) recording a greater proportion of suburbs listed within the capital city.

Nearly two-thirds (65%) all the suburbs which made the list made it for houses as opposed to 35% for units, but with RP Data noting that a much greater proportion of the overall housing market nationally is houses as opposed to units which is partially influencing these figures.

The 10 regions with the greatest number of suburbs recording high levels of value growth accounted for 57.5% of the total suburbs across Australia.

This article first appeared on Property Observer.