Research reveals worst performing suburbs for property investment

New research has identified the lowest-returning suburbs for property investment across Sydney, Melbourne and Brisbane, with some areas recording zero or negative capital growth.

Data from LongView showed Sydney Olympic Park and Abbotsford recorded no capital growth, while Melbourne’s Essendon North experienced negative returns of -0.56 per cent.

LongView co-founder Evan Thornley said successful property investment relies heavily on land value.

“Investors don’t realise that the ‘right’ properties are those where most of the value is held in the land underneath the home, and the best properties for capital growth are RODWELLs – robust, older dwellings on well-located land,” Thornley said.

The analysis revealed apartment-heavy suburbs consistently underperformed.

“Our analysis shows that the five worst performing suburbs for capital growth across Australia have one thing in common. Nearly 80 per cent of the sales of investment properties in 2024 were apartments or units, not Houses,” Thornley said.

In Sydney, suburbs including Rosehill, Mortlake and Asquith showed minimal growth, with returns ranging from 0.21 to 1.18 per cent.

Melbourne’s poorest performing areas included Travancore, West Melbourne and Maribyrnong, with returns below 0.6 per cent.

Brisbane’s lowest-returning suburbs fared slightly better, with Fortitude Valley recording 1.55 per cent growth and Brisbane City 2.19 per cent.

The research found that properties in Sydney, Melbourne and Brisbane represent just one-sixth of Australian properties but account for nearly half of all capital growth.

“Most people see better returns on the family home they bought for lifestyle reasons than on the investment property they thought they were buying to make money,” Thornley said.