Recently while researching for my upcoming book, Whistle Blower, I decided to look into the performance of some of the key markets that many property investment firms place their customers into. Typically, these markets are heavily dominated by new builds, creating an oversupply of properties. I knew, as a valuer and property investment professional, that a lot of these markets were overpriced, but even I was shocked at how much these markets have experienced negative growth over the past 12 months.
Shockingly, some of the most popular areas for property investment – based on the recommendations of so-called professional experts – are some of the worst performing markets in the country. Here’s some prime examples:
- Mackay -29%
- Brisbane CBD -5.9%
- Robina (Gold Coast) -8.1%
- Muswellbrook -9.6%
- Docklands (Melbourne CBD) -4.9%
As property investment advisors, it baffles us at Suburbanite why any investment firm would be recommending these locations to their clients. As an investor, would you want your investment to go backwards before it goes up? Of course you don’t!
In total, there were 802 negative growth suburbs for houses and 399 negative growth suburbs for units. This is after ruling out any suburbs with negative growth of less than 1%, as that could just be an anomaly. That means that these areas experienced declines in values typically between 3% and 10%. One area even had a stagging 46% decline in values in just 12 months!
The good news for Suburbanite clients is that there was not a single location on the list of negative growth suburbs where we had purchased properties for our clients. We are able to use our extensive experience to pick markets with solid performance and keep our clients out of risky locations.
As a first time investor, or even as a savvy and experienced investor, this data highlights the value in getting expert advice before buying an investment property. With such an extensive list of suburbs with negative growth – the report of failed investment locations ran to over 26 pages! – it can be difficult to pick the good from the bad. Anticipating a 10%, 25%, or even 46% decline in values is just beyond most investors, and with so many potentially risky markets to invest in, it can be easy to be overwhelmed and make poor choices when you go it alone.
Thankfully, you don’t have to make property investment choices by yourself. Our team at Suburbanite can provide you with independent advice that is based on your unique financial goals. We don’t provide cookie-cutter strategies and we never, ever take money from anyone other than you. That means no kickbacks from developers, no commissions from anyone. We represent you and your interests, always.
So if you want to invest in property without being scared that you’re going to be left with a property that’s declined in value, that you can’t rent out and can’t offload, call us to make an appointment.
You can download a free copy of the 26 page report of 1,100 negative growth suburbs here