Real estate blacklist reveals riskiest city suburbs to buy property

June 2024 · 2 minute read

Home seekers and investors have been cautioned against units and houses in a mix of once popular capital city suburbs as housing experts warn of more interest rate hikes to come.

New analysis by property research group DSR Data revealed outer city apartments and houses near new estates were among the worst suburbs to buy property in the current climate.

This was due to a higher risk of price falls after purchase, which would mean those buying with smaller deposits faced the increased likelihood of losing money if forced to sell.

Included in the list of riskiest suburbs for purchasers in each capital were also “lifestyle” suburbs that experienced a pandemic-induced boom only to recently fall out of favour with new buyers.

Many of the other areas deemed to be poor markets for purchasers in each capital had common themes, according to the DSR research, which took into account various demand and supply indicators, sales volumes, and market cycle timing.

SEE THE WORST SUBURBS IN EACH CAPITAL BELOW

The suburbs were often situated in the outer suburbs, where a surge in higher-density apartments has been observed, notably in Sydney’s Campbelltown and Penrith regions.

DSR Data analyst Jeremy Sheppard said most of the capital city areas on the worst suburbs list had an excessive supply of available homes, surpassing the underlying buyer demand.

Some were also lifestyle precincts – often by the coast – that attracted sea-changers and tree-changers during the early pandemic.

“They’re over supplied and overpriced. Two things that will knock demand out of any market,” Mr Sheppard said.

A few notable appearances on the list were certain suburbs of Victoria’s Mornington Peninsula, along with select parts of Adelaide’s southern beaches and the coastal north of Brisbane.

Cate Bakos, president of the Real Estate Buyers Agents Association said parts of the Mornington Peninsula were especially problematic choices for new buyers because they were still adjusting to the aftermath of Covid lockdowns – a period when they were much more popular.

WORST PROPERTIES TO BUY IN EACH CAPITAL CITY

Sydney: Hazelbrook houses

See full list of riskiest Sydney suburbs

Melbourne: Mornington units

See full Melbourne list

Brisbane: Burpengary houses

See full Brisbane list

Adelaide: Daw Park houses

See full Adelaide list

Perth: Mosman Park houses

See full Perth list

Hobart: Austin’s Ferry houses

See full Hobart list

Source: DSRData.com.au

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