Hot property under $200k

NATIONAL housing affordability has sunk to an all time low, but bargains can be had in decent areas where houses are selling for less than $200,000.

"Investor battlers want areas with affordable houses and good prospects for growth," says property researcher Terry Ryder, who last month released a list of Australia's worst locations to purchase.

He says while there is no shortage of towns with cheap homes, most of them are dead-end locations with no future. He has put together a list of locations with good prospects where good properties are on offer for less than $200,000 and where TLC means just that and not demolish and start again.

These include capital cities, regional centres and country towns.

"Their points in common are low prices, solid rental returns and potential for price growth."

When evaluating areas he took into account the facilities a location has - schools, hospitals, parks, sports grounds, as well as lifestyle advantages and proximity to industry and public transport.

Broken Hill topped his list. The town has a median house price of $125,000 and saw house prices grow 33 per cent last year.

Flow on benefits from the resources boom is likely to increase for the town with the development of more mines in the area as well as a $2.5 billion wind farm.

Median rents for a three bedroom house in Broken Hill are $150 to $175 a week, offering rental yields of around 6 per cent.

The next brightest prospect was Charters Towers in north Queensland, where a typical house sells for $190,000. The area is rich in gold, and there is talk of new gold mines opening up.

Next up is the slightly more urban area of Elizabeth, in South Australia, which includes nine suburbs on the outskirts of Adelaide. Typical houses in the area sell for $180,000 and properties have averaged capital growth of 12 to 15 per cent a year for the past 10 years.

Top 12 reasonable locations:

Area Typical house price
1. Broken Hill, NSW $125,000
2. Charters Towers, Qld $190,000
3. Elizabeth, SA $180,000
4. George Town, Tas $170,000
5. Gippsland, Vic $128,000-$220,000
6. Glen Innes, NSW $155,000
7. Inverell, NSW $185,000
8. Melton Shire, Vic $180,000
9. Mildura, Vic $145,000-$205,000
10. North West NSW, NSW $175,000-$225,000
11. Parkes, NSW $195,000-$208,000
12. Rosebery.Zeehan, Tas $90,000-$130,000

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Published on May 5-th, 2008 in Property Investment
Damon Rasheed is the CEO of Rate Detective, an Australian financial service comparison sites specialising in Life Insurance, Income Protection Insurance and home loans. Damon holds a Master's Degree in Economics from the University of Melbourne and has been involved in many start-up internet businesses.

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