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In 2023, InvestorKit's top 23 suburbs was published by the Pizza and Property podcast. For the first time ever, we're going to unpack the list in detail to share what went right and what went wrong and everything you need to know about it. I'm Junge Ma, lead research analyst at InvestorKit. Let's get into it. In 2023, InvestorKit published a list of 23 suburbs that were expected to grow above average in 2023.
And that was published with the Pizza and Property podcast. In that list, four suburbs are from Adelaide, three are from regional South Australia, three are from Toowoomba, Bundaberg has four of them, Rockhampton five of them, and Townsville has four of them. So they are basically splitted between South Australia and Queensland. After 21 months since then, how have they performed? Today, let's look at data and find out.
From February 2023 to November 2024, seven of the 23 suburbs have achieved above 30% total capital growth. 13 of them have achieved 20% to 30% total capital growth. And only three of them have achieved between 15% to 20% total capital growth. And if we annualize these capital growth rates, 21 of them have achieved double digits annualized growth. Only two were below 10%.
One was 8. 3% and the other was 9. 1%. Overall, they have all achieved above average growth. So if we only look at their 21 months growth, we have done a good job in this prediction.
But today, I want to do one step further to just analyze their 12 months growth from February 2023 to the end of 2023 to see if our prediction for 2023 was actually precise. So if we only look at 2023 growth, 16 out of those 23 suburbs have achieved above average growth. Four out of 23 of them just achieved average growth from 5% to 7%. Let's have a look who they are. First, the range in Rockhampton.
The total growth in 2023 there was 6. 8%. It's below 7%, so we consider it as an average performing area. And the rest three of them are all in Townsville. Kerwin, 5.
3% annual growth. Bushland Beach, 5. 6%. And then Douglas, 7. 0%, just at the top of the average range.
And there are three suburbs among these 23 suburbs didn't perform up to the average level. They are in Bundaberg, Townsville, and Toowoomba. The Bundaberg one is Kaukee, and its annual growth was just 4. 2%. The Toowoomba one was South Toowoomba, and it actually declined by 0.
5% over the course of 2023. And then the Townsville suburb is Annadale, and its annual growth in 2023 was just 3. 5%. But the good news is, although they didn't perform well in 2023, their property price growth sped up towards the end of 2023 and made their two-year total growth really impressive. So looking at the suburbs' 2023 performance, why didn't we get it 100% precise?
The main reason here is that we underestimated the scale of cash rate hikes back in 2023, and we underestimated the cash rate rise's influence on property market confidence. First, all the below-average performing suburbs were with some of the lowest rental yield level and the highest price level among its macro region. For example, Kaukee, the Bundaberg suburb, had a median house price of $499. 5,000 at the end of 2022 and a yield of 5. 5%.
Compared to the other suburbs we selected, the median house price was the highest and rental yield was much lower than the rest. In 2023, as interest rates kept hiking, it was very likely that buyers' demand shifted more to the more affordable suburbs with higher yield so that demand in these higher-priced, lower-yield suburbs went down and led to poor growth compared to its neighboring suburbs. And second, Townsville's market pressure was trending well towards the end of 2022. In 2023, if interest rates stopped hiking or even started to decline, Townsville's market pressure would continue booming. However, as interest rates continued to go up in 2023, buyers' confidence and demand was actually affected by the high interest rates.
In the end of 2022, days on market in Townsville was declining steadily, inventory was declining steadily, and number of sales was increasing fast. However, entering 2023, we saw days on market stopped decreasing and during the course of 2023, it actually increased a bit. Number of listings was continuing to go down, but at the same time, number of sales stopped going up. And as a result, inventory levels stopped declining fast in 2023. And all these combined together led to a slower growing year in Townsville.
Our prediction was based on the assumption that Townsville's housing demand wouldn't be affected as much by the high interest rates because of the affordability and high rental yield. If that was the truth, Townsville's 2023 growth would be above average. However, as interest rates kept going up, Townsville was affected and that has led to just average and even below average performance in Townsville suburbs. So in summary, our 2023 picks of suburbs performed overall very well over the past 21 months up to now. However, in 2023, we made some mistakes.
My key takeaways from this review or this exercise would be two. Number one, no prediction can be always 100% correct because there's always changes happening in influencers and push trends to perhaps totally different directions to what we have expected. You see, the RBA has world-class economists and they are in charge of a country's money supply. And yet they can't get the inflation prediction 100% right every time. That is why we need to constantly monitor trends in the economy and in the property markets.
And also that's what we are doing now. And my second takeaway is that it's more important to look at the bigger picture than just focusing on smaller scale trends. Let's make it extreme. For example, if we look at just one house, it will be so hard to see where it's gonna go because we don't have enough data and there are too many influencers on this one house. But if we expand it to a street, we'll have more data to rely on.
And furthermore, if we expand it to one suburb, suddenly more data and more steady trends. But then if we expand it further to a SA3, for example, we'll be having plenty of data and the trends will be much more steady. So when you look at a suburb's trend and you find it too bumpy, too hard to predict, I will suggest you to zoom out a bit and look at the macro level data. And in the long term, all suburbs' micro trends will be converging to the SA3's trends anyway. So that was our review on the 23 in 2023 list.
If you're interested in the 25 most undersupplied suburbs in 2025, stay tuned because we're going to publish that list real soon. Just make sure you don't miss out. Hit that follow button on Spotify or the subscribe button on YouTube. I'm Junge Ma. Thank you for your time and I'll see you next week.
