Real estate in Australia saw some interesting changes in 2022, and the year 2023 is bringing some good bargains for home buyers. So, if you’re wondering if Australia is a good place to invest in property in 2023 or when Australian house prices will crash, you’re in the right place.
The regional locations occupied the top three spots in 2022, but in 2023, the capital cities will have a prominent place in the leaderboard due to rapid population growth.
Whether you’re planning to buy or build a property in Australia, the most important thing is choosing the right location. In this post, we’ll explore whether Australia is a good place to invest in property.
Best suburbs to invest in Australia
Is Australia a good place to invest in property? The answer is yes. Over the decades, the country has seen major population growth including the further gentrification of suburbs on the city fringe.
You can invest anywhere, but it is better to invest in the most promising suburbs for investment in Australia. Factors including population growth, sales volume, rental growth, vacancy rates, spending, price growth, and infrastructure amenities determine the best locations. Below are the best places to invest in Australia in 2023:
Best Sydney suburbs
- Coogee
- Kingsford
- Kensington
- Maroubra
- Neutral Bay
Check out available properties for sale in Sydney.
Top Melbourne suburbs
- Caulfield
- Elsternwick
- Ormond
- McKinnon
- Bentleigh and East Bentleigh
Check out available properties for sale in Melbourne.
Best Brisbane suburbs
- New Farm/Teneriffe
- Ascot
- Highgate Hill
- Wilston
- Ashgrove
Check out available properties for sale in Brisbane.
How to choose the best investment location
Investing in a property is a big decision, and you must consider many factors before choosing a location. Are you looking for the best country towns to live in Australia for your investment? Or looking for coastal areas?
To invest in the right property, you must look for the neighbourhood, distance from the stores, population growth, business services, community facilities, price growth, and recreational facilities. To choose the best places to invest in Australia in 2023, you should:
Consider the types of properties
Generally, there are three types of properties: A-grade homes, B-grade properties, and C-grade properties. The A-grade homes are investment-grade properties and are the most expensive. Plus, they provide lots of facilities and a luxurious lifestyle.
The B-grade properties are also good for investment but have less-than-perfect neighbourhoods and not as good facilities as A-grade properties. The C-grade properties are those that most home buyers avoid because of lesser facilities and cheap properties.
Plan your budget
Your budget is one of the most important factors to consider when choosing a location. Before choosing a place to invest in Australia, you must consider your budget. For instance, if you choose an A-grade neighbourhood but don’t have enough money to purchase it, it will not be a worthy investment. In this case, even if you get a loan, you might not be able to handle the huge monthly payments.
Evaluate the risks based on research data
Another important factor you must consider before investing is calculating the risk involved. It is important to calculate risks in real estate and make sure your investment is worth it. The following are a few factors that determine risk:
- Property taxes can rise which may affect property prices
- The property market conditions can change
- You can end up having a property with title defects
- Expensive repairs can cost a lot for existing homes
- Interest rates can change according to fluctuations in the regional property market
- There might be delays in construction or development
- Rental growth may decrease due to changes in the market
Property valuation
Property valuation includes several factors, such as house prices, listing prices, taxation, and insurance. You must compare your property with other properties in the neighbourhood with similar properties.
Also, you should calculate the land cost and construction cost if you plan to build a property. Another important factor to consider is the liquidity of the property. You must ensure that the portion of your home equity is easily convertible into cash when required.
Expected cash flows and ROI
When you invest in a property, your main aim should be a good return on investment (ROI). Cash flow is the amount your property will give after paying the expenses. You must look for properties with an expected increase in intrinsic value after appreciation. Renovation is also important to consider if it adds to the property’s overall value.
Fluctuations in property markets
Real estate is a volatile market, which means it goes through frequent rises and falls. However, some competitive property markets are more volatile than others. Low volatility is good for an investment property because you can predict the property value and future capital growth and cash flows for rental purposes. Additionally, you must consider the economic trends and the regional property market conditions of the area where you invest.
Wrapping up on investing in Australia
The best places to invest in Australia in 2023 include the capital cities.
To choose the best location for investment, you must consider three important factors: your budget, location, and property type.
As a home buyer, you must consider your plan and calculate the risks involved in the investment.
