Much of the media coverage in the past few months regarding property prices has been on Sydney and Melbourne - "green shoots" recently started to appear in these markets, driving a turnaround in median national housing prices following more than a year of falls. 

Furthermore, Sydney and Melbourne's property markets are also on-track to record double-digit price growth in 2020.

But some suburbs will record higher growth than others, and according to Riskwise Property Research CEO Doron Peleg, lower-end properties - properties with higher crime rates that can be gentrified - shouldn't be overlooked, with many of the suburbs earmarked by Riskwise in February 2018 outperforming the market in that time. 

"Our nationwide research actually found gentrifying suburbs with high crime typically deliver strong price growth and outperform the local benchmark," Mr Peleg said. 

“We found affordable high-crime areas with significant gentrification are likely to produce strong price growth, particularly when dwelling prices in the inner and middle rings are severely unaffordable.

“For example, even in high danger areas of New York City and London, etc, provided there is strong population growth and severe unaffordability throughout these cities, these crime areas still increase in popularity and therefore experience price increases.”

The table below displays a selection of variable-rate home loans on offer, featuring a low-rate pick from each of the following three categories: the big four banks, the top 10 customer-owned banks, and the larger non-banks.

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Filters
LenderHome LoanInterest Rate Comparison Rate* Monthly Repayment Repayment type Rate Type Offset Redraw Ongoing Fees Upfront Fees LVR Lump Sum Repayment Additional Repayments Split Loan Option TagsFeaturesLinkCompare
6.04% p.a.
6.06% p.a.
$2,408
Principal & Interest
Variable
$0
$530
70%
 Featured Online ExclusiveUp To $4K Cashback
  • Immediate cashback upon settlement
  • $2,000 for loans up to $700,000
  • $4,000 for loans over $700,000
5.99% p.a.
5.90% p.a.
$2,396
Principal & Interest
Variable
$0
$0
80%
 Featured Apply In Minutes
  • No application or ongoing fees. Annual rate discount
  • Unlimited redraws & additional repayments. LVR <80%
  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
  • Immediate cashback upon settlement
  • $2,000 for loans up to $700,000
  • $4,000 for loans over $700,000

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Important Information and Comparison Rate Warning

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of . View disclaimer.

Mr Peleg says high-end properties, while doing well to bounce back from recent downturns, are far more sensitive to credit restrictions and investor activity compared to low-end ones. 

“That's why high-end properties were impacted dramatically during the downturn but also bounced back dramatically when reversing the negative factors, as we are seeing in prestige areas of Sydney and Melbourne,” he said.

“Lower-end properties are less subject to credit restrictions and investor activity which actually make them a great buying opportunity. In fact, in some cases areas, such as Geelong, even benefited from the lending restrictions as buyers looked for more affordable options.”

Buyer activity is mixed at the moment. 

The latest lending to households data from the Australian Bureau of Statistics show a rise in lending commitments to households rose 1.1% in September and 3.8% in August - it has now grown for four successive months. 

But investor and first home buyer activity fell by 4.0% and 1.9% respectively. 

Auction clearance rates, on the other hand, have risen in both Sydney and Melbourne (our two largest property markets) and now comfortably sit above 70%. 

“The RBA’s interest rate cuts, some loosening of credit restrictions, significant improvement in buyer confidence and increased auction clearance rates provide very strong indications regarding these markets,” Mr Peleg said.

“Buyer sentiment in relation to housing measures has noticeably improved and the Westpac-Melbourne Institute’s House Price Expectations and Time to Buy a Dwelling Indices show a consistent trend.

“As we predicted immediately after the election and in our previous Risks & Opportunities Reports, the market has materially improved with affordable areas that have shown resilience recovering well. Other areas, including lucrative ones that experienced strong price reductions, are now leading the way to this recovery.”

Read: 15 Sydney suburbs tipped for growth in 2020



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