34 Queensland suburbs blacklisted: No go zones named

Thirty-four Queensland suburbs have been blacklisted over a high risk of property price falls, making up a third of Australia’s investor no go zones. See the full list.

Thirty-four Queensland suburbs have been blacklisted over a high risk of property price falls, making up a third of Australia’s investor no go zones from the Gold Coast to Brisbane to Cairns.

A massive 111 suburbs across the country were declared “no-go zones” for investors in an annual report by investment advisory group Positive Property – with a surprise twist this year seeing mining towns and rural centres overtaken by high-density inner city areas, regional coastal towns and pandemic boom suburbs.

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High demand suburbs on the Gold Coast dominated the Queensland blacklist.

Report author George Markoski, a buyer’s agent and highly successful investor, said suburbs flagged in the research were not necessarily poor locations to live in but were “bottom markets” for investors.

“If you buy in a no-go zone, you could lose money,” he said, warning a “price correction” could also be on the cards for many areas that saw considerable growth in recent years.

“Suburbs can’t outperform other suburbs forever,” he said. “There will come a point where buyers have cheaper alternatives and go somewhere else. Every market moves in cycles.”

He said there was increased risk some would fall into negative equity, where the mortgage is worth more than the value of the home.

“Even if you get a discount, you’re catching a falling knife. There’s a risk of falling equity. Other times, there could be no growth for seven to 10 years because that market does nothing. You don’t want that as an investor because it’s the growth that makes you money.”

Positive Property’s George Markoski has dozens of properties himself and puts out an annual blacklist of overheating areas.

Two Greater Brisbane suburbs on opposite ends of the price spectrum were named no go zones for investors - affordability hotpost Kingston in Logan City and Queensland’s most expensive suburb Newstead in Brisbane City.

Queensland’s list was dominated by pandemic boom zone the Gold Coast where 12 suburbs were redflagged led by Hope Island.

Mermaid Waters, Biggera Waters, Surfers Paradise, Benowa, Ashmore, Currumbin Waters and Labrador were also blacklisted, as were millionaire’s playgrounds of Mermaid Beach and Southport and more affordable areas that have seen strong growth like Coombabah and Highland Park.

“What we find is that a lot of Gold Coast suburbs may be among the top 100 places to invest in the country one year, but the next they’re in the bottom 100. The market has been moving from one extreme to the other. There’s often undersupply, so prices boom. Then every developer and his dog start building and, because (Gold Coast) councils are less restrictive with development, they frequently end up with oversupply issues.”

Townsville which has seen a rush of interstate buyers since the pandemic had three suburbs named in the no go zone report.

Pandemic boom cities favoured by southern investors – Cairns and Townsville – saw 10 suburbs redflagged by Mr Markoski. Cairns City, Trinity Park, Smithfield, Trinity Beach, Redlynch, Mount Sheridan and Whitfield were among suburbs he warned could see “price correction”.

“If you bought there three years ago you would have made a lot of money. There was a lot of (real estate) spending and people were going nuts... There’s a strong chance of a correction there”.

Cairns City was marked as an area that’s due for some possible price correction after a flurry of demand during the pandemic.

See the latest PropTrack Home Price Index

Townsville’s Idalia, Annandale and Bushland Beach were also named for having “had their run of growth”. “The neighbour price balancing isn’t good … you can’t expect people to keep paying more forever when there are cheaper alternatives.”

Mr Markoski said “for a lot of these suburbs, the devil is in the detail”.

Buyers agent Arjun Paliwal of InvestorKit believes there is still some life left in parts of South East Queensland and Townsville, both of which he named among 10 leading economies in his Market Pressure Review.

He said the SEQ trio of Brisbane, Gold Coast and Sunshine Coast still had a strong outlook economically, with housing supply strains continuing despite demand easing.

“As Australians continue flocking to this region, demand will strengthen bolstered by recovering consumer confidence. We expect healthy growth in the coming year.”

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Originally published as 34 Queensland suburbs blacklisted: No go zones named