While property prices continue to fall across the country, five affordable suburbs are set to buck the trend, posting 10 per cent annual growth, according to new analysis.

Research conducted by property analyst sellorhold.com.au has identitied five suburbs with a median price of $500,000 as the key, affordable areas about to boom, by up to 28.8 per cent in one case.

The top-performing suburbs identified were Karabar in Canberra, Middle Ridge in Toowoomba, Ashtonfield in Newcastle and both Seaton and Brompton in Adelaide, with the $500,000 benchmark price eliminating most of the other more expensive capital cities.

Head of research Jeremy Sheppard said the top five suburbs were forecast to grow in value by up to $150,000 across the next three years.

“A lot of these suburbs are not well known for what’s going on in the general area. None of the areas is similar in economy or size but in everyone, demand exceeds supply,” he told The New Daily.

“Karabar in Canberra has a stable economy as politics never tends to go out of business. Toowoomba has all sorts of economic stimuli with large infrastructure projects like the airport and the motorway. But it all comes down to supply and demand.”

While this seems like astronomical growth, Mr Sheppard says it’s “totally achievable”.

“When you look at the dollar figure, $100,000 [growth], it does sound incredible. But look at the capital growth we just had in Sydney where prices went up 70 per cent over five years. Hobart has had double-digit growth in the last few years, so these forecasts aren’t extreme by those standards.”

“If you’re fortunate enough to own in these markets, you’ll have a nice little bonus without having to lift a finger,” he said.

Investing in real estate is predominantly about creating capital growth. Choosing a property which will increase in value while delivering a rental cashflow to make holding the asset more affordable is key.

Director of Suburbanite, Anna Porter, says investors need to look at more than just predictions before buying – especially when they’re not familiar with the local markets.

“While the suburb may be predicted to boom, if you pay too much for a property in that area because you are unfamiliar with the market, you will erode your return from the outset,” she told The New Daily.

“It is important to understand that markets have sub-markets. An investor who is not familiar with the area may get the name of a supposed ‘boom’ location, but without knowing the nuances of that market, can still get it wrong.

“This type of information, if used incorrectly, can give investors a false sense of security.”

Her top picks for investors to watch are in inner-city Canberra and Adelaide.

“Our top locations forecast for growth in the next three to five years include houses in Canberra metro, with a particular focus on Kambah and Wanniassa, as affordable growth hubs where you can buy a freestanding house under $600,000 within a stone’s throw of all the amenities Canberra CBD offers and the Monash University campus.

“The other locations we forecast as strong growth markets fall within the southern metro corridor of Adelaide, and include suburbs like Edwardstown, Mitchell Park and all the way down to Woodcroft.

“These suburbs are within a commutable distance to Adelaide CBD, yet still offer exceptional affordability, with prices as little as $350,000 for an older free-standing house.”

Investors should also be looking outside capital cities to snag a bargain, says Hotspotting’s Terry Ryder.

His research into sales activity and price movements has identified regional centres in Victoria, Tasmania and NSW as areas to watch.

“Regional Victoria is the strongest market in Australia. Regional Tasmania and regional NSW are also strong,” he told The New Daily.

He tips Ballarat and Bendigo in Victoria, Launceston in Tasmania and Orange and Wagga Wagga in NSW as regional centres offering good investment opportunities.

“These areas can represent a win, win, win because those markets tend to be a lot more affordable, the rental returns are always higher and they have the potential for good growth.”

While property prices in most capital cities continue to fall, many people are still locked out of inner-city markets.

The ripple effect created by Melbourne, Sydney and Hobart means more people are moving into regional cities where economies are strong, lifestyles are cheaper and house prices still sit around $300,000.

“These [regional areas] fit a similar build. Buying prices are attractive, rental yields are much higher and there is growth to be found,” says Mr Ryder.

Buyers beware

If you’re an investor looking at purchasing in regional areas, it’s safer to buy in substantial regional cities where the economy is diversified, says Mr Ryder.

“You want to target an area that’s growing in terms of economy. Then look at vacancy rates – are they high or low? So you know that there’s no oversupply in the market.

“Then look at the pricing. If you can buy a quality four-by-two [four-bedroom, two-bathroom] in the $300,000 range, with low vacancies, you’re buying something that’s solid and safe and has further yield.”

Head of property market research at Propertyology, Simon Pressley, says that anyone looking to invest in property should also be studying the macro factors of each market.

“There are very few guarantees in life and none with property. No one should make any big decision without first understanding it properly and feeling comfortable with it,” he told The New Daily.

“The performance of individual property markets in the future will always be influenced by macro factors: international, federal, state, monetary policy, credit policy, etc. No one knows what will happen with those macro factors.

“Let’s be perfectly clear here – property values within a specific suburb cannot boom unless the broader city itself booms.”