Top 10 highest-risk suburbs to buy property in 2020
- Gosford, NSW, 2250
- Mascot, SW, 2020
- Rouse Hill. NSW, 2155
- Darwin, NT, 0800
- Surfers Paradise, QLD, 4217
- Fortitude Valley, QLD, 4006
- Adelaide, SA, 5000
- Clayton, VIC, 3168
- Docklands, VI, 3008
- Box Hill. VIC, 3128
“[Gosford] topped the list due to a number of factors, including the recent bushfire risk, oversupply of units and that units unsuitable for families were not in high demand,” says RiskWise Property Research CEO Doron Peleg.
“It is hard to convince prospective buyers that this is the best investment they can make when there are plenty of other options available. Another at-risk area is the suburb of Mascot with 1,061 units in the pipeline, and where news of the construction defects impacted the entire suburb,” says Doron.
“Areas outside of Sydney and Melbourne, such as Darwin, experienced overall weakness in the property market due to low population growth (the Northern Territory was the only state in Australia that experienced population loss in 2017-18). Darwin units delivered -33.7 per cent capital growth over the last five years.”
Apartments are high risk
He said while apartment prices in Sydney and Melbourne were enjoying price rises, this was not the case in high-supply areas, and areas affected by defect scandals.
“The best case scenario in these areas is they are simply underperforming the market, but the worst case scenario is they are actually losing money,” Mr Peleg said.
“For example, while Domain’s latest House Price Report shows in the 2019 December quarter prices rose 4.3 per cent, this was not the case in suburbs with high oversupply and particularly those affected by construction defects, such as Mascot where prices fell 4.6 per cent to $880,000. In Homebush West, where the Centenary Park building is located, prices also fell 9.3 per cent to $565,000. These areas not only have the risk of being in the Danger Zone due to oversupply, but also construction defect risk. The number of apartment sales in Sydney Olympic Park fall dramatically by 75 per cent following the defects identified in Opal Tower with buyers showing little interest for apartments across the suburb.
So, if you’re planning to buy a new property in 2020, it might be wise to avoid these areas for the time being.