Brisbane's High-Crime Suburbs Outperform Property Market
Feb 27, 2018
Housing in high-crime areas such as Runcorn, Sunnybank and Woodridge are outperforming the Brisbane market, according to research house RiskWise Property Research.
Riskwise identified the Top 10 Brisbane high-crime areas (Source: Queensland Police) to compare their five-year growth to the city’s median.
The results were astounding. Together, these high-crime suburbs delivered five-year growth of 31% for houses and 13% for units, beating the Brisbane median price growth benchmark.
RiskWise CEO Doron Peleg said most property investors believed high-crime rates would have a detrimental effect on property price growth, but it was apparent the opposite was true.
“Investors commonly attribute too much weight to crime figures and should more objectively analyse the financial risks when making property investment decisions,” Mr Peleg said.
“Our nationwide research actually found gentrifying suburbs with high crime typically deliver strong price growth and outperform the local benchmark.”
In Brisbane, the top 10 high-crime areas outperformed the market due to very strong demand from owner-occupiers and investors for affordable properties. Many of these areas are in the southeast of Brisbane.
“Take Inala as an example. The suburb recorded one of the highest offence rates across Brisbane, yet it delivered strong median price growth of 26.2 per cent, which is above the local benchmark,” Mr Peleg said.
“The key price-growth drivers in these high-crime suburbs were affordability, accessibility to the CBD and attractive local suburb features.
“These positive factors appeared to significantly outweigh the negatives brought by high crime. Also, with unaffordable dwelling prices in the inner and middle-rings, the outer-rings have become increasingly sought after among a variety of buyers.”
The table below details the median price growth for the top 10 high-crime areas in Brisbane against the Brisbane benchmark.
The results are similar in Sydney, Melbourne and the Gold Coast, where high-crime areas often outperformed the market.
“One example is Frankston North in Melbourne which significantly outperformed the market with a 101 per cent median price growth over the past five years,” Mr Peleg said.
“Also, in Adelaide and Perth, high-crime areas undergoing significant gentrification delivered strong growth.
“In summary, our research found that affordable high-crime areas with significant gentrification were likely to produce strong price growth. Whereas suburbs with high-crime and low-gentrification typically deliver growth below the local benchmark.”