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20 markets where rent and prices are set to sink
by Aiden Devine
Investors beware. Victoria’s Bellarine Peninsula, a
community just east of Geelong, is set for a tough time for property price
growth – according to DSRscore.com.au data.
Four of the peninsula’s prominent suburbs, which include St.
Leonards, Portarlington, Indented Head and Drysdale, are within a list of 20
national suburbs where prices and rents are set to remain flat or decrease over
the coming months and, possibly, years.
The list included only suburbs with at least 15 properties
being listed on the market.
Other property markets set to struggle include five suburbs
spread across Tasmania, as well as Agnes Water, just north of Queensland’s
Sunshine Coast.
Scotland Island, 30km north of Sydney and within the local
government area of Pittwater, is the only suburb from New South Wales to crack
the top 20.
The top 20 suburbs were ranked according to their DSR score
– a measure of the ratio of supply to demand. A high DSR score indicates a
market where prices are likely to increase. A low DSR score indicates a market
where a number of indicators show that growth in prices and rents is set to
perform badly.
In each of the 20 suburbs on the list a number of factors
combined to show that property prices were likely to fall. Each suburb had a
high rate of vacancies, low rental yields and, most importantly, a very high
percentage of properties being sold on the market.
For Redwerks research director Jeremy Sheppard, inventor of
the DSR score, the last factor is particularly significant in markets where
there is already lacklustre demand for property.
“Market prices move in response to the changes of demand and
supply. New infrastructure projects, rising population, new education or health
centres, good employment opportunities and the like, all influence the demand
for property in a particular location ... prices will rise if demand exceeds
supply,” he says.
By that logic, Sheppard says that in markets with low demand
and a high supply of properties, prices will struggle to grow. The same is
equally true of rents. High vacancy rates tend to indicate markets with an oversupply
of rental accommodation. In these conditions, rental prices are unlikely to
increase.
20 markets where rents and prices are set to sink
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