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2010 Hotspots Biggest property bargains revealed
Jack Han investigates how to own your home sooner with home loan tips and bargain property buys.
December 1, 2009
A report of Australia’s cheapest property areas reveal ‘hotspots’ for price growth that are almost $400,000 less than median house prices across the country. These bargain properties are fodder for investors, and home buyers wishing to own a property outright as soon as possible.
According to an Australian Property Investor magazine report, investors can secure an average house in Tasmania’s Clarence City for as little as $178,000, which is more than three-times cheaper than the median house price of $569,000 in Sydney.
As a “long-term hold” a purchase in the area will see “significant growth” in five to seven years, the report says. For investors looking to make a decent profit over the next 12 months, the report has listed the best areas for growth, by state:
- Queensland: Gympie $260,000
- New South Wales: Gunnedah $208,000
- Victoria: Portland $189,000
- Western Australia: Geraldton $345,000
- Tasmania: Clarence City $178,000
- Northern Territory: Rapid Creek $568,000
- South Australia: Ceduna $245,000
- Australian Capital Territory: Gungahlin $458,000
Moderate to strong growth is expected across the Australian market overall for 2010, but this is largely dependent on the pace of the interest rate rises. For example, if rates increase unexpectedly fast, then the slowing demand for home loans can stifle immediate house prices.
The good news for home buyers simply wishing to find a home to live in is that these prices can fast track you to home ownership. Assuming that you are taking out the full value of the property in a loan, a $570,000 property would require $3,236 in repayments a month over a 30-year term at 5.5 percent. If you paid $3,236 a month on a $178,000 loan at the same rate, than you could own it outright in just over five years – giving you a home that is three-times cheaper in a sixth of the time.
Investors hoping to make a gain are more likely to take out investment home loans, which normally offer interest only repayments rather than principal and interest. This means that investors will only pay a small portion of the loan every time, but will never come closer to owning the home outright.
Experts have done the homework to bring you the hotspots for growth in 2010. Now it is up to you to shop for the right home loans, whether you are looking for an affordable home, or just an extra source of wealth in the New Year.
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This article is over two years old, last updated on December 1, 2009. While RateCity makes best efforts to update every important article regularly, the information in this piece may not be as relevant as it once was. Alternatively, please consider checking recent home loans articles.
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