Investors should look towards Queensland, Victoria and Sydney’s west, where tight supply and steady demand are likely to put upward pressure on prices according to new research.

Research from LJ Hooker Group has identified several areas that are likely to see strong returns in 2024, based on a number of leading indicators such as rising prices, low days on market and increasing yields.

Topping the list is Wyndham in Victoria and Brisbane City while the Moreton Bay area in Queensland is also expected to perform strongly for investors.  

LJ Hooker Group’s Head of Research, Mathew Tiller, said there were several leading indicators, such as supply, rental growth, population growth and buyer demand, that enable investors to look ahead to gauge future opportunities.

“Picking the right time to buy, to maximise your capital growth and rental return can sometimes be tricky,” Mr Tiller said.  

“Typically, when trying to find opportunities, major cities often grab the headlines, however, this does not tell the whole story, as all markets behave differently, driven by unique local factors and that is what we are expecting in the year ahead.”

He said every Australian state was suffering a housing shortage, which looks set to persist in the medium term as construction costs remain high, and access to development sites grow scarce.

The most impacted state is Queensland, where analysis indicates a 69,000 dwelling shortage, followed by Western Australia and Victoria, which have a shortfall of 27,000 and 23,000 dwellings respectively.

Mr Tiller said the Wyndham local government area had the highest housing undersupply in the country, with a shortfall of 12,600 homes. 

“There has been significant population growth in this region, as the State Government focuses on making it a major economic and employment centre,” he said.

“Williams Landing offers significant affordability to first-home buyers, with median house prices sitting at $810,000 and $468,000 for units respectively.”

Queensland has also experienced strong demand, with the population growing sharply in Brisbane over the past decade, resulting in a housing shortfall of 12,000 homes and strong price growth. 

“Richlands is a top performer, with house prices rising by 46 per cent and units by 14 per cent over the past twelve months,” Mr Tiller said.

“It also has strong rental yields of 6.4 per cent. Other notable suburbs include Bardon and Sunnybank.”

While north of Brisbane, Caboolture has a housing supply shortage of almost 9500 dwellings, he said.

“The average house price in suburbs such as Wamuran, which saw house prices rise by 28 per cent in the last twelve months, is $1.17 million with more affordable options existing in nearby Warner and Highvale,” Mr Tiller said.

Mr Tiller said that in Queensland, Logan was another strong area with a housing undersupply of more than 8300 dwellings.

“Average dwelling prices range from $607,000 for a house and up to $720,000 for a unit, with a median average rental rate of $560 a week,” he said.

“Fast-growing suburbs include Park Ridge and Eden’s Landing.”

While the Gold Coast is also ripe for growth with values for detached houses rising over 30 per cent in the last twelve months giving them an average value of $925,000. 

“Broadbeach is growing in popularity with young families,” he said.

“Kingsholme and Hollywell have also performed strongly, and less dense and more affordable.”

Ipswich is also a location to watch with a housing supply shortage of 6250 dwellings.

In Victoria, Melton is a major growth corridor in north-western Victoria, with a strong population growth boom driving demand for new housing, which according to the ABS has seen the local population rise sharply from 51,165 in 2001, to 178,960 in 2021. 

Mr Tiller said median house prices rose by 5.4 per cent over the past twelve months in Melton, as first-home buyers driven by affordability and the desire to access space increased demand for housing. 

At the sae time, a strong population base has led to a housing supply deficit of over 8,100 dwellings in Casey. 

“The region covers a vast tract of outer suburban Melbourne, offering investors a significant variety of investment opportunities and suburbs,” Mr Tiller said.

“Notable performers include Cranbourne West and the wider Cranbourne catchment.”

Mr Tiller said surging levels of immigration are also putting upward pressure on prices in the Melbourne CBD.

“The City of Melbourne is one of the densest CBD residential centres in Australia, with over 145,000 people residing in the city,” he said.

“Population growth, linked to offshore migration and an increasing supply of high-density housing, is favouring the CBD due to its well-connected infrastructure and access to many services. 

“Strong growth areas include West Melbourne, Parkville and North Melbourne.”