According to new data from RiskWise Property Research, the high crime suburbs of Sydney and Melbourne have outperformed the respective housing markets of the rest of their cities.
According to the study, the median price of homes in Sydney has increased 69.2% over the past 10 years. However, capital growth rates in the city's 10 high crime areas have exceeded that of Greater Sydney.
The south-western suburbs of Liverpool recorded the largest increase with 108.1%, almost 40% above the median growth.
Bankstown, Greenacre and Guilford also posted growth rates of over 90%, while property values ??in Auburn, Busby, Merrylands and Punchbowl climbed around 80%.
Meanwhile, Melbourne's 10-year capital price growth was 62.9% – a figure that is lower than nine of its 10 high crime areas.
The inner suburb of Ascot Vale has experienced the highest rate of capital growth in the past decade, at 77.1%.
Brunswick, Craigieburn and Frankston all outperformed Melbourne's real estate market by more than 10%.
"We have found that affordable high crime areas with significant gentrification are likely to produce strong price growth, especially when house prices in the inner and middle rings are extremely unaffordable," said Doron Peleg , CEO of RiskWise at RiskWise, at Business Insider. .
However, Pete Wargent, co-founder and managing director of real estate buying agency AllenWargent, told Business Insider that buyers are not actively looking for homes in high crime areas and several others factors affected house prices.
“Despite the stigma that is generally attached to areas where crime is problematic and the potential challenges that come with it in the short term, over a reasonable period of time this has tended to be outweighed by the combined benefits of crime. Affordability, convenience of location, and gentrification, from a housing market performance perspective, ”he said.
Peleg said the scarcity of land and the under-supply of houses in Sydney and Melbourne had boosted demand, even in high crime areas, with affordability the main driver of price growth. real estate.
"Our nationwide research has actually found that gentrified suburbs with a high crime rate generally generate strong price growth and outperform the local benchmark," he said. "This is also in line with the international trend where areas that had been notorious have benefited from gentrification and sharp price increases."
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