A panel of property experts have identified 100 suburbs around Australia with the best growth prospects in 2023 and beyond.

Suburbs in the inaugural realestate.com.au Hot 100 were nominated based on a range of medium- and long-term growth factors, such as location, investment prospects, gentrification, affordability, amenities, and infrastructure.

It comes amid a gloomy outlook for the housing market with prices expected to continue falling across the country, as higher interest rates increase mortgage costs, weaken confidence and reduce borrowing power.

But Cameron Kusher, director of economic research at realestate.com.au’s data and insights business PropTrack, says there are still plenty of suburbs set to defy those broader market trends.

“That’s why it’s imperative that anyone thinking of buying does their own research to understand what drives a local market and how it is likely to evolve over the coming years,” Mr Kusher says.

“Remember that housing should be seen as a long-term asset class because of its illiquid nature, and like any asset class, the value of a property will fluctuate over time.

“It’s about purchasing the right property at the right price, rather than buying or selling because that’s what the herd is doing.”

The suburbs that made the list

Click through the table below to see the top 100 suburbs identified as having the best growth prospects in 2023 and beyond, as nominated by a panel of property experts, including buyer's agents, researchers, and academics.

New South Wales

24 NSW sales made the list, comprising a mix of inner-city, outer-suburban and regional areas.

For example, Glenmore Park in Sydney's western suburbs was selected for its affordability, infrastructure and investment prospects.

Located near Penrith, property buyer Kate Hill from Adviseable says a low rental vacancy rate is attracting investors in search of strong yields.

“As far as Sydney goes, real estate in Glenmore Park is affordable,” Ms Hill says. 

“Penrith is also undergoing gentrification as the population grows, so future price growth prospects in suburbs like these are solid.”

Closer to the city, the suburbs of Alexandria and Ashfield were nominated for their location, gentrification and changing demographic. 

Outside the capital city, buyers agent Pete Wargent from BuyersBuyers says Cessnock offers affordable entry-level houses in the Hunter Valley and remains within the gravitational pull of Sydney.  

“It’s also about 50km from Newcastle, which is a major growth city in its own right,” he says. 

Victoria

Victorian suburbs accounted for 29 spots in the Hot 100, with a mix of inner-city, suburban and regional suburbs nominated for growth. 

For investors, Kennington in Bendigo is strategically located next to the La Trobe University campus and has seen a 10% increase in asking rents over the past year. 

“The current rental vacancy rate is low and based on typical average prices, landlords can expect about a 4% yield,” says Ms Hill. 

For families, buyers agent Miriam Sandkuhler from Property Mavens says satellite cities like Geelong are becoming increasingly favoured as an affordable alternative to Melbourne, boosting demand for suburbs like Belmont.

“It’s in a convenient location with a high degree of amenity,” Ms Sandkuhler said. “Belmont offers some great housing options, including nice homes on generous blocks, appealing to families and investors.”

 

Queensland

24 Queensland suburbs made the Hot 100 list, with a strong focus on the so-called 'Golden Triangle' encompassing the Sunshine Coast, down to the Gold Coast (including Brisbane) and out to Toowoomba.

For investment prospects, Hill says Creastmead in the Logan region south of Brisbane offers an affordable enty point, and has swung into favour with first-home buyers. 

“It’s popular with investors too given its lower prices and healthier yields,” says Hill. 

Mermaid Waters on the Gold Coast has already experienced strong price growth in recent years, but Hello Haus founder Scott Aggett says the suburb will see further upside from the $1 billion expansion of the light rail line from Broadbeach to Burleigh Heads.

“It’s a tightly held location with strong owner-occupier appeal due to its close proximity to the beach, public transport and shopping centres,” Mr Aggett said.

Detailed analysis on each suburb across every state, including interviews with the panel of experts, can be found here.

Housing outlook: rental yields to rise in 2023

The housing market enters 2023 in a very different position to where it was 12 months ago, when record low interest rates, supply constraints and strong buyer demand pushed property prices to record highs. 

But after peaking in April, prices quickly reversed as the RBA embarked on one of the most aggressive monetary policy tightening cycles in history.

The official cash rate has risen from 0.1% to 3.1% since May. 

PropTrack's Cameron Kusher says the rate hikes so far have slashed buyers' borrowing capacity by around 25%

"This means a lender will allow you to borrow 25% less than they would have before the interest rate increases," Kusher says.

"Many purchasers no longer have the capacity to pay the prices they were before interest rates started to increase."

While the outlook for house prices remains uncertain, Mr Kusher says the rental market will continue to climb. 

"Rental vacancy rates are sitting at historic lows, as are new and total rental listings, and the number of days a rental property is listed on realestate.com.au before leasing," Kusher says.

"Looking to 2023, escalating demand and tight supply are likely to see rental increases persist, but more so in the capital cities than in regional areas.

"Hopefully, we will also see more investors return to the market, creating more rental supply."