New research commissioned by mortgage lender Well Money has revealed the quality locations across NSW where buyers and investors hold sizeable bargaining power over vendors.
House and unit markets and discounted suburbs that were experiencing stagnant demand over the past decade were listed then ranked based on the number of years’ profit (from lowest to highest) that vendors would sell at a 10% discount.
Topping the list of suburbs where conditions were most favourable to buyers and investors was Alstonville, which posted a net price gain of 165% over the past decade, with a median asking price of $901,600 in December 2022, The Daily Telegraph reported.
A vendor selling a property at a 10% discount in the Northern Rivers town would only lose out on a year’s profit.
The research featured investment-grade suburbs where properties saw at least 45% price growth over the past decade, meaning vendors could afford to sell for a 10% discount.
“Buyers hold a negotiating advantage in each of these suburbs right now, because vendors have enjoyed capital growth of at least 45% over the past decade,” said Scott Spencer, Well Money CEO. “Another reason why buyers have the edge in these suburbs is because market conditions have been turning in their favour, as demand relative to supply has been falling.”
Ranking second on the list was Valla Beach, situated to the north of Nambucca Heads, which saw a net price gain of 147% over the past decade. It has the lowest median asking price for houses on the list, at $560,000, and sellers could see only a year of profit lost if sold at a discounted price.
Of the 20 suburbs that are buyer and investor friendly, only two unit markets made the list.
One was Kellyville Ridge which saw an 89% net price gain over the past decade, has a median asking price of $508,250, and could see a vendor losing one and a half years of profit if they sold their unit at a discounted price. The other was Kingswood, which experienced a 118% net price gain with a median asking price of $958,000.
“All of the suburbs have low inventory levels, which will put upward pressure on price growth, and low vacancy rates, which will put upward pressure on rental growth,” Spencer told The Daily Telegraph. “Interest rates have been rising and will probably increase even further in the first half of 2023, so investors need to budget for higher repayments. It’s risky to enter the market if you don’t believe you’d have the capacity to cope with higher interest rates.”
Here are the top 20 suburbs where buyers have the advantage:
- Alstonville
- Valla Beach
- Kellyville Ridge
- Kariong
- Figtree
- Carrington
- Lawson
- Kingswood
- Spring Farm
- Charlestown
- Elderslie
- Medowie
- Wadalba
- Fern Bay
- Braidwood
- Woongarrah
- Claremont Meadows
- Hamlyn Terrace
- Prestons
- Terranora
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