LongView reveals Australia's worst suburbs for property investment

New research from LongView exposes the Australian suburbs offering the worst historical returns for property investors, with slim to no capital growth rates across major cities.
Melbourne’s Essendon North performed the worst overall with a 0.56% decline in capital values, followed by Abbotsford at 0%. In Sydney, Olympic Park also remained stagnant at 0%, while its second worst performer, Rosehill, only saw 0.21% growth. Brisbane’s market shows slightly better results with its worst suburb, Fortitude Valley, at 1.55%, followed by Brisbane City at 2.19%.
Further research shows that just over two-thirds (67%) of all metro Melbourne, Sydney, and Brisbane investment properties sold in 2024 had poorer historical capital growth compared to the average of all owner-occupied homes. Moreover, nearly three quarters (72.6%) of all investment properties valued under $1M had poorer capital growth than the average of all owner-occupied homes.
Co-founder and Executive Chair of LongView, Evan Thornley, says traditional property investors are prioritising the wrong criteria to minimise risks and costs, overlooking the crucial value of the property’s underlying land.
“Investors don’t realise that the ‘right’ properties are those where most of the value is held in the land underneath the home, and the best properties for capital growth are RODWELLs – robust, older dwellings on well-located land. Those located in Sydney, Melbourne and Brisbane make up just one-sixth of all properties in Australia, yet they account for nearly half of all capital growth,” Thornley said.
He added, “Our analysis shows that the 5 worst perfroming suburbs for capital growth across Australia have one thing in common. Nearly 80% of the sales of investment properties in 2024 were apartments or units, not Houses. This confirms LongView’s golden rule – land appreciates, buildings depreciate.”
Although property continues to be a strong contender in the investment space, Thornley highlights how this volatile market is gradually proving traditional investment models to be outdated.
Thornley said, “The current low capital growth rates are a clear indication of why Australia needs a housing fund industry. At LongView, we’re dedicated to making this vision a reality through our Shared Equity Fund.”
With the potential to deliver returns of between 12-16% per year, the Fund leverages advanced data science and expert buying strategies to carefully invest in homes that, on average, showcase a capital growth rate of 7.2% annually.
It also allows investors to diversify their portfolios by co-investing in the lucrative family home market without the hassle of being a landlord or the long-term commitment of full ownership.
“Most people see better returns on the family home they bought for lifestyle reasons than on the investment property they thought they were buying to make money,” Thornley explains. “This Fund allows investors to achieve the same outcomes, but on a much larger scale.”
LongView’s Shared Equity Fund requires a starting investment of $100K and is currently open for its next round of capital raising. The Fund is experiencing strong demand and previous successful rounds have seen co-investment approved in 54 homes worth nearly $100M across Sydney, Melbourne, and Brisbane.
About LongView:
LongView is an integrated residential property business focused on fixing Australia’s broken housing system. From better experience for renters, expert property buying advice for first home buyers, industry leading management services, and equity funded property, they have designed the solutions that are win-wins for their clients. Find out more about LongView on their website: www.longview.com.au
Appendix
Full data sets for the top ten worst performing suburbs for capital growth in metro-Melbourne, Sydney, and Brisbane.
Note:
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Investment properties have been identified by LongView’s internal analytics team. Historical sales and capital growth data was sourced for any investment property sold between 1 January and 30 September 2024.
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Suburbs with less than 20 investment property sales in 2024 have been excluded.
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Historical growth rates refer to the suburb median of annual growth, which is effectively the median CAGR (Cumulative Annual Growth Rate).
1 Full data set for metro-Melbourne
Suburbs |
Historical rate of capital growth (p.a.) for investment properties |
|
1 |
Essendon North |
-0.56% |
2 |
Abbotsford |
0.00% |
3 |
Travancore |
0.11% |
4 |
West Melbourne |
0.54% |
5 |
Maribyrnong |
0.56% |
6 |
South Yarra |
0.59% |
7 |
South Melbourne |
0.74% |
8 |
St Kilda |
0.91% |
9 |
Collingwood |
1.11% |
10 |
Docklands |
1.20% |
2 Full data set for metro-Sydney
Suburbs |
Historical rate of capital growth (p.a.) for investment properties |
|
1 |
Sydney Olympic Park |
0.00% |
2 |
Rosehill |
0.21% |
3 |
Mortlake |
0.72% |
4 |
Asquith |
1.18% |
5 |
Parramatta |
1.57% |
6 |
Chippendale |
1.68% |
7 |
Harris Park |
1.69% |
8 |
Westmead |
1.74% |
9 |
Wentworth Point |
1.75% |
10 |
Warwick Farm |
1.75% |
3 Full data set for metro-Brisbane
Suburbs |
Historical rate of capital growth (p.a.) for investment properties |
|
1 |
Fortitude Valley |
1.55% |
2 |
Brisbane City |
2.19% |
3 |
South Brisbane |
2.26% |
4 |
Bowen Hills |
2.43% |
5 |
Woolloongabba |
2.93% |
6 |
Milton |
3.16% |
7 |
Spring Hill |
3.29% |
8 |
Newstead |
3.29% |
9 |
Albion |
3.35% |
10 |
Kelvin Grove |
3.36% |