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Housing in high-crime areas such as Busby, Bankstown and Guildford are outperforming the Sydney market, according to research house RiskWise Property Research.
Riskwise identified the Top 10 Sydney high-crime areas (Source: NSW Police) to compare their five-year growth to the city’s median.
The results were astounding. Together, these high-crime suburbs delivered outstanding five-year growth of 87 per cent for houses and 65 per cent for units, blitzing the Sydney median price growth benchmarks of 81 per cent and 60 per cent respectively.
RiskWise CEO Doron Peleg said most property investors believed high-crime rates would have a detrimental effect on property price growth, but it was apparent the opposite was true.
“Investors commonly attribute too much weight to crime figures and should more objectively analyse the financial risks when making property investment decisions,” Mr Peleg said.
“Our nationwide research actually found gentrifying suburbs with high crime typically deliver strong price growth and outperform the local benchmark.”
In Sydney, eight of the Top 10 high-crime areas outperformed the market due to strong demand from owner-occupiers and investors for affordable properties. Many of these areas are in the western suburbs.
“Take Busby as an example. The suburb endured one of the highest gun-violence rates across Sydney, yet it delivered exceptionally strong growth with the median price for houses almost doubling over the past five years,” he said.
“The key price-growth drivers in these high-crime suburbs are affordability, accessibility to the CBD and attractive local suburb features.
“These positive factors appear to significantly outweigh the negatives brought by high-crime. Also, with unaffordable dwelling prices in the inner and middle-rings, the outer-rings have become increasingly sought after among a variety of buyers.”
The table below details the median price growth for the top 10 high-crime areas in Sydney against the Sydney benchmark.
Mr Peleg said the results were similar in Brisbane, Melbourne and the Gold Coast, where high-crime areas often outperformed the market. One example is Frankston North in Melbourne which significantly outperformed the market with a 101 per cent median price growth over the past five years.
While price growth in Adelaide and Perth was below the local benchmark, high-crime areas undergoing significant gentrification delivered strong growth. For example, Prospect in Adelaide outperformed the local housing market with 26 per cent median price increase over the past five years.
“In summary, our research found that affordable high-crime areas with significant gentrification were likely to produce strong price growth. Whereas suburbs with high-crime and low-gentrification typically deliver growth below the local benchmark,” he said.