Australia’s property market is hiding a secret, and it’s about to turn everything you thought you knew about real estate investment on its head.
While the masses chase prestige postcodes and CBD proximity, a quiet revolution is unfolding in “undercover” markets, delivering eye-watering capital growth that will leave traditional investors scratching their heads.
This is the explosive claim from Terry Ryder, a veteran real estate researcher and director of Hotspotting.
“Some of the oldest, and most inaccurate, beliefs about prices refuse to die,” Mr Ryder writes in his upcoming book.
He argues that the property market is rife with “furphies” – misconceptions that steer investors away from the true growth engines.
These include the long-held beliefs that capital cities always outperform regions, that the biggest cities guarantee the best growth, that proximity to the CBD is paramount, that prime up-market suburbs offer superior price uplift, and that houses consistently grow faster than apartments.
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Hotspotting founder and property analyst Terry Ryder.
“These are all classic pieces of misinformation because research ridicules all of them,” he said.
“However you look at them, the statistics show that cheap outperforms expensive, which means in simple terms that the smaller cities, the outer-ring areas of our biggest cities, regional locations and, more recently, attached dwellings.
“Many may aspire to live in Toorak or Bondi Beach, but that doesn’t translate into high demand because most can’t afford the multimillion-dollar price tags. The bulk of buyer demand goes to the more affordable areas.”
New research from Hotspotting corroborates this perspective, revealing that over the past five years, the most impressive capital growth has been concentrated in Queensland, South Australia, and Western Australia, with ten “undercover” regions emerging as top performers. “However, many buyers have been fixated on Brisbane and Perth as well as more blue-chip suburbs in Adelaide and have missed out on achieving superior results because of it,” Mr Ryder said.
“All of these areas are affordable, with some classified as stigmatised because of the demographics of the people who live there, crime rates, or the region is prone to particular weather events like floods.
“But the results have been extraordinary for buyers who sought out these undercover regions because they understood their market fundamentals and looked past outdated real estate investment tropes.”
Looking to invest? Then don’t cast your eye towards capital cities, Mr Ryder suggests.
Mr Ryder also argues that when making purchasing decisions, many buyers become fixed on irrelevant factors such as income levels, social housing ratios, or the proportion of homeowners versus investors in a suburb.
“One of the great furphies in real estate is that areas with above-average crime rates are bad places to invest,” he asserted.
“Many investors fixate on this and they will reject any location they perceive as being down-market, stigmatised or having high crime.”
Mr Ryder dismisses this as “wobbly thinking,” suggesting it’s a case of “real estate snobs trying to justify an attitude.”
He points to stigmatised suburbs like Wiley Park in Sydney and Inala and Deception Bay in Greater Brisbane, all of which have generated robust capital growth over the past five years. “The reasons why property values rise have little to do with prestige or timeless quality, or proximity to the CBD or swimming pools. It’s not about the best streets in the best suburbs. Instead, Mr Ryder champions the performance of more affordable areas, describing it as a “win-win-win situation for buyers at the affordable end of the market – cheaper prices, higher rental yields and superior capital growth.”
Australia’s Top 10 “undercover” growth areas
Bundaberg, QLD
Mr Ryder highlighted Bundaberg’s exceptional performance, stating: “Bundaberg has 18 markets with 15 per cent-plus capital growth averages, the same number as the much larger Gold Coast City. Two of them averaged above 20 per cent a year.”
Fraser Coast, QLD
The Fraser Coast has also demonstrated significant growth.
“The Fraser Coast has 17 markets with 15 per cent-plus capital growth averages, compared to seven on the Sunshine Coast, including Maryborough, which suffers regular Mary River floods but has averaged 18 per cent per year,” he said.
Geraldton, WA
In Western Australia, the more affordable suburbs of Geraldton have seen rapid appreciation from a low base. Mr Ryder noted: “The cheap down-market suburbs of Geraldton have risen fast from a low base, with Spalding averaging 24 per cent, Utakarra 25 per cent and Rangeway 38 per cent per year.”
Gympie, QLD
Despite its history of floods and being previously stigmatised, Gympie has proven to be a strong performer.
“Gympie has been stigmatised as a problem town, but all its suburbs have averaged 16 per cent to 18 per cent a year over the past five years – despite a history of floods,” Ryder said.
Kwinana, WA
Kwinana, identified as the most affordable precinct in Greater Perth, has seen all its suburbs excel.
“The cheapest and most down-market precinct in Greater Perth, but all of its suburbs have excelled, including five averaging above 20 per cent per year,” Mr Ryder confirmed.
Lockyer Valley, QLD
This cluster of lesser-known towns between Ipswich and Toowoomba, spearheaded by Gatton, has outperformed expectations. Mr Ryder added that the neighbouring Somerset LGA also boasts high achievers such as Esk and Kilcoy.
Murray Bridge, SA
“Hardly anyone outside SA would know of this town, but it has averaged 18 per cent per year over the past five years,” Mr Ryder revealed, showcasing the quiet strength of this South Australian locale.
Playford, SA
Arguably one of the most affordable and stigmatised locations in capital-city Australia, Playford has delivered remarkable results.
“15 Playford suburbs have topped 15 per cent per year, with nine of them above 20 per cent per year. Seven of the Elizabeth suburbs topped 15 per cent. The neighbouring Salisbury LGA also has 15 markets on the list of high achievers,” he detailed.
Port Pirie, SA
This South Australian town has become a magnet for investors seeking affordable housing and high rental yields.
“Risdon Park has averaged 21 per cent and Solomontown 24 per cent a year,” Mr Ryder stated.
South Burnett, QLD
The towns of Kingaroy, Nanango, and Murgon within the South Burnett region have all demonstrated excellent five-year growth, with strong results continuing.
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