Investor demand and supply have reached a critical point, creating both a quiet crisis and an opportunity, according to a leading buyer’s agent.

Competition for properties at the affordable end of the market has been sky-high, with investors chasing strong returns at low prices and first home buyers looking to work their way onto the property ladder.

Discover Buyers Agency principal Kane Dury said that recent property data had created a clear picture of a lack of the correct supply for investors to target.

“Recent data confirms exactly what we’re seeing across our client base – that frustrated investors can’t find a home that matches their criteria,” Dury said.

He said that nearly half of all investors were focused on properties valued below $700,000, despite this segment accounting for only 30 per cent of dwellings nationwide.

He added that the successful investors would be those who were strategic about identifying where housing fundamentals and economic drivers were doing the heavy lifting.

“Investors who understand where to look can still build meaningful wealth at this price point, provided they are willing to think beyond the capital city postcode.”

“The conversation about property has become so fixated on capital city medians that a huge cohort of everyday investors has been left with the impression that the door is closed. It is not closed.”

While investors were looking to target homes under the $700,000 price tag, Dury said the type of asset was just as important as the location.

He said that new and off-the-plan homes were almost always priced so that investors paid a premium to cover the developer’s margin, sales commission, and marketing costs, while existing homes didn’t carry the same premium cost.

“They have a rental history, genuine comparable sales data, and they sit in neighbourhoods where the infrastructure, like schools, hospitals, transport and retail already exists,” he said.

“That is where long-term capital growth comes from.”

Additionally, Dury said that it was important to remember that investors should never adopt a one-size-fits-all approach.

“A location that is right for a 30-year-old PAYG investor building a first portfolio is not necessarily best for a 50-year-old trying to replace an income in retirement,” he said.

“The $700,000 price point is the starting reference, but any investment plan must be bespoke to the investor themselves.”

After analysing the data, Dury has identified five suburbs in NSW, Queensland, Western Australia, South Australia, Victoria, and the Northern Territory that present viable investment opportunities for buyers with a budget of $700,000.

“These are established communities with real economic bases, genuine rental demand and housing stock that has stood the test of time.”

According to Dury’s analysis, the small rural town of Mount Morgan, south of Rockhampton, was the most affordable of the anticipated hotspots, with a median price of just $353,000 and boasting a 5.23 per cent yield.

He said the town held benefits for investors, with tight supply and community-scale demand underpinning performance.

Here are the top 30 suburbs for assets under $700,000:

NSW

• Ashmont, Wagga Wagga – $505,000
• Oxley Vale, Tamworth – $603,000
• Muswellbrook – $680,000
• West Albury – $648,000
• Hamilton Valley, Albury – $659,000

Queensland

• Condon, Townsville – $687,000
• Wulguru, Townsville – $642,000
• Mount Morgan, Rockhampton – $353,000
• Norville, Bundaberg – $638,000
• Crow’s Nest – $692,000

Victoria

• Armstrong Creek, Geelong – $686,000
• Newcomb, Geelong – $639,000
• Broadmeadows, Melbourne – $647,000
• Fraser Rise, Melbourne – $685,000
• Morwell, Latrobe Valley – $441,000

South Australia

• Eyre, Adelaide – $641,000
• Hillier, Adelaide – $639,000
• Callington – $689,000
• Mount Gambier – $604,000
• Mannum – $602,000

Western Australia

• Medina, Perth – $639,000
• Armadale, Perth – $678,000
• Collie, Bunbury region – $566,000
• Beachlands, Geraldton – $579,000
• Spalding, Gearldton – $504,000

Northern Territory

• Alawa, Darwin – $687,000
• Anula, Darwin – $679,000
• Moil, Darwin – $680,000
• Wagaman, Darwin – $633,000
• Malak, Darwin – $631,000

This article was first published on Smart Property Investment, a sister-brand of Property Buzz.