Revealed: Brisbane’s top 20 most undervalued suburbs

Brisbane’s most undervalued suburbs have been uncovered, with some surprise inclusions among the top 20 suburbs predicted to beat citywide growth rates. SEE THE LIST

346 Milton Rd, Auchenflower, sold for $910,000 last October. Auchenflower is considered undervalued in both its unit and house market.

Brisbane’s most undervalued suburbs have been uncovered, with some surprise inclusions across the top 20 performers.

Graceville, Underwood, Auchenflower, Cannon Hill, Nudgee, Richlands and Lota were named among the top 20 most undervalued suburbs in Brisbane due to their house markets, with the areas said to be headed for their own boom, according to a DSR study by expert analyst Jeremy Sheppard.

The surprise inclusion of houses in those suburbs comes despite Brisbane having experienced record price growth since the pandemic, with the study uncovering secret pockets of growth ahead including 13 unit markets.

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Inner-city suburbs South Brisbane, Spring Hill, Brisbane City, Bowen Hills and West End, which were saturated with supply during the apartment building boom around 2015, are now considered ripe for growth.

South of the river units in Carina Heights, Bulimba and Mt Gravatt East are set to take off, DSR predicted, along with those in Ascot, Gaythorne, Auchenflower, Kedron and Brendale.

“Undervalued suburbs using this model have outperformed their city’s average growth rate in the past,” Mr Sheppard said.

“So, buyers of property in the top 20 should expect performance above the average for that city.”

Among other factors, areas were considered “undervalued” if house or unit prices were well below the same category of housing in neighbouring areas, if the suburbs also lagged growth in nearby areas, and if there was “a large gulf in unit and house prices within suburbs”.

That was then compared against the current balance of housing supply and buyer demand in those suburbs, with only those where demand was outstripping supply named as undervalued.

“It’s underperformance followed by green shoots,” Mr Sheppard said.

Brisbane's undervalued suburbs: 11 Haldane Street, Graceville, sold for $865,000 on July 27, 2022.

“They’re suburbs where prices hit a peak and came down drastically in the last 12 months and you’d have buyers thinking maybe the properties are good value now.”

“Bridesmaid suburbs" were also common among undervalued areas, he said, which was areas that might have been considered less desirable than their neighbours but had now reached a point where the savings purchasing there were significant enough to warrant a look.

“You could see above average growth in the next few years, while it’s still comparatively better value for money.”

Bharat Patel took his Qld real estate holdings to 12 properties during Covid-19, with his business Cashflow Properties helping others do the same.

Buyers’ agent Bharat Patel of Cashflow Properties said undervalued suburbs primed for growth were an investor’s ideal target, with Brisbane still showing good value despite its pandemic price surge.

“I still remember some suburbs, for example, Logan Central, where houses used to sell around $180,000 to $220,000 only. Now you literally find nothing in that price range and most of the houses are about half a million dollars. We don’t need to wait until the Olympics come in,” he said. “Before then most of the suburbs in Brisbane will be $1m.”

Auctioneer Andrew Degn in action at an auction in Paddington. Picture: Annette Dew

Place Paddington principal and auctioneer Andrew Degn was surprised to see Auchenflower on the undervalued list for its houses given listings there were hard to come by.

But, he said, the unit market there was definitely investor stock.

“I’ve sold Auchenflower’s most expensive home, 6 Birdwood Terrace, in recent times,” he said.

“The investment stock moves around, but the residential home stock simply is held.

28-30 Brookvale Drive, Underwood, sold for $494,200 in February.

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“It’s probably Brisbane’s best-kept secret, and we want to keep it that way.

“The truth is people buy (houses) in Auchenflower and then they’ll stay.”

Mr Degn said these people simply didn’t move, holding property across generations, sheltered by strong council protection for the suburb’s character homes.

Ray White Ascot selling principal Damon Warat had no doubt at all that units in Ascot were undervalued.

“If you compare the prices in Ascot versus a little bit further out, there’s not much difference in price,” he said. “Buyers can buy in one of the most affluent and expensive suburbs in Brisbane and pay a similar amount to a unit in a neighbouring, further out suburb.”

Ray White Ascot selling principal Damon Warat.

Mr Warat said the suburb also had lots of older larger unit blocks in streets where no more were allowed to be built.

“They’re surrounded by houses that sell for $6-7m, and you can still pick up a unit for about half a million dollars on the same street. They’re a very rare commodity and they’re an excellent long term investment. Sometimes the land is worth more than the individual strata units.”

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Originally published as Revealed: Brisbane’s top 20 most undervalued suburbs