"UNFASHIONABLE" suburbs that were previously snubbed by buyers are the investment hot spots of 2016, according to property experts.
Perth is expected to remain a buyer's market for the next six months, with industry figures predicting a pick-up in established sales activity from July.
But investment experts warn buyers need to be selective to see above-average capital growth.
For top investment picks, the experts predict "ugly duckling" suburbs with rejuvenation potential and an improved reputation will offer better investment returns than their trendier neighbours.
QWest Paterson chairman Warwick Hemsley said buyers should embrace "unfashionable suburbs" that have strong surrounding infrastructure, such as schools, childcare, transport and retail.
He said a good strategy would be to seek out affordable suburbs with higher- end neighbours that had recently experienced price growth. Ashfield (8km northeast of Perth), Midland (16km east of Perth), and Belmont (7km east of Perth), were among his top investment picks for proximity to new infrastructure and existing affordability.
"Ashfield is between the railway line and the river, less than 10km from the CBD and is cheaper than neighbouring Bassendean," Mr Hemsley said.
"Astute observers of property look at areas and think, 'Which suburbs are being overlooked here?', 'Which suburb is out of kilter with the suburbs around it?' or 'Which one looks like another suburb that has done incredibly well, but it hasn’t been discovered yet?'."
Independent property commentator Gavin Hegney said major projects, such as Elizabeth Quay, the Cockburn Central redevelopment, Fremantle’s Kings Square and the Perth Stadium at Burswood, would have a wider influence on areas than just the immediate locality.
"There's always going to be a rub-off effect," Mr Hegney said.
"I like to talk about how what’s happening in Cockburn Central will effect Spearwood and Hamilton Hill. And the rub-off effect of Elizabeth Quay may very well take place in South Perth, just a ferry trip away."
Mr Hegney said older, established properties on big blocks close to new infrastructure offered good investment returns.
Momentum Wealth managing director Damian Collins said 2016 would also be a big year for upgraders.
"As people get more confident, they’ll trade up from their $400,000-$500,000 properties to the $600,000-$800,000 range," Mr Collins said.
"Bayswater, East Victoria Park and Manning fit into that category. They are in the next level down but are getting re-rated by the market as people move in."
NICE NEIGHBOURS: Affordable suburbs with surrounding high-end neighbours are predicted to present good capital growth in 2016.
Ashfield which has a median price of $506,250, is expected to enjoy a flow-on effect from Bassendean which has enjoyed a median price rise of 19.5 per cent in the past three years to $567,500.
Spearwood, which has a median of $526,250, is expected to see a rise from neighbouring Coogee’s growth which has a median of $800,000 and experienced a 11.1 per cent rise in the past three years.
UGLY DUCKLINGS: Suburbs which have previously had stigma attached to them but now have rejuvenated reputations are solid investment picks for 2016.
Midland, which has a median price of $411,000, is predicted to see an increase following the opening of the St John of God Midland Public Hospital.
Scarborough, which has a median of $770,000, is expected to benefit from the planned $57 million beach front redevelopment.
UPGRADE UPSWING: Low interest rates and 2015's softening of the high end market is predicted to bring upgraders to middle-tier suburbs.
Buyers priced out of areas like Mount Lawley and Inglewood are expected to start looking towards localities such as Bayswater which now enjoys a median price of $640,000.
INFRASTRUCTURE IMPROVES: Elizabeth Quay, Cockburn Central redevelopment and the new Perth Stadium at Burswood will improve not just immediate localities, but surrounding areas, according to Gavin Hegney.
South Perth ($1.2m median) could receive a boost from buyers looking to "ferry over to Elizabeth Quay".
Doubleview, Wembley Downs and Trigg will be boosted by those wanting to be close to the Scarborough redevelopment.
REZONING: Suburbs that are awaiting rezoning approval to allow higher density development such as Wanneroo ($467,500 median) will see a boost as larger blocks become subdividable.
TRANSPORT: With congestion on the rise affordable suburbs less than 10 kilometres from the CBD, such as Belmont ($505,000 median) are expected to be popular in 2016.
PRICE RIGHT FOR FIRST-TIMERS
WHEN it came time to buy their first home, Samantha Gardener and partner Daniel Kirby made sure they kept their eyes on the prize.
The young professionals are buying a four-bedroom home on an 823sq m block in Spearwood, 18km south of the CBD, after an eight-month search. With a median house price of $526,250, the area is predicted to rise in value as buyers priced out of nearby Coogee –which has a median of $800,000 – are wooed by its affordability.
Ms Gardener said she was confident of "future profits" due to the suburb’s proximity to Fremantle and the big blocks on offer.
"There were a lot of homes available in Spearwood, but the ability to negotiate with sellers seemed dependant on how motivated they were to sell," the 29-year-old said. "If you're looking, don't rush. I would have bought 10 different homes in Spearwood because I would walk into a home and imagine myself living there."
Acton real estate agent David Bombara said the locality and a revitalisation strategy was having "a huge impact" on buyers.
"There’s a lot of investment interest, but it's also a very family orientated suburb, and is popular with the first-homebuyer demographic."