How to pick an investment property hotspot in 2014 Properties under $1 million in capital cities will continue to be in short supply in 2014. PROPERTY investors can expect double-digit returns and healthy rental yields in 2014 if they buy wisely. But remember that there isn't just one property market, there's many and it all depends on the suburb, street and price point of the particular property you are looking to buy or sell. One market can be up 20 per cent while another could be down 10 per cent. From all the industry insiders that I've spoken to, the majority believe that what we have seen in 2013 is just the tip of the iceberg for the next property cycle which started the day after the election. Property is still reasonably affordable compared to the past, given the low interest rates and 5-6 years of pent up demand from all the buyers who have been sitting on the sidelines since the Global Financial Crisis. They've all jumped in together and many are buying multiple properties now that they can see growth back in the market. A number of buyers got concerned that the market got over inflated after the election as there were, and continue to be, a number of properties selling for $50-100k or more over their reserve. However, there are still plenty of properties being traded at reasonable levels. My personal thought is that properties under $1 million around our capital cities will continue to be in short supply and high demand and this confidence and growth in prices will spread to more properties in the blue chip suburbs and the more affordable properties in regional areas. What are the top five suburbs to invest in 2014? I'm a fan of mainly buying in Sydney and Melbourne as both cities have a limited supply of available land to build in the inner city, especially where there are height restrictions. There is also on going demand from buyers and renters who want to live in Sydney and Melbourne as well as plenty of industries supporting the areas, therefore if there's a change in mining/tourism/terrorism/exchange rates there are plenty of other industries supporting local workers. Melbourne had a good growth spurt in 2010 and so many research companies are tipping Sydney over Melbourne over the next few years. I prefer to go for the guarantee of the already established blue chip suburbs that have more consistent growth over trying to hotspot the latest greatest suburbs that may or may not perform as predicted. Therefore my tips are as follows: 1) Bondi Beach It's world famous for a reason, and there's thousands of young, affluent Australians and long staying people from overseas that will pay any price to live near the beach. 2) Coogee Beach Not everyone likes the busyness of Bondi and so Coogee attracts a different demographic of inner city workers and beach lovers that like more of a village life. 3) Kirribilli With such amazing views of the city and harbour, Kirribilli has always been a favourite of the affluent city worker that can wander across the bridge from work. Although there are more high rises there and parking is scarce, once you have found a unit that ticks the boxes it will always be in demand 4) Cremorne Another popular suburb with professionals in the north that want the blend of harbour, peace and quiet but easy access to the city, cafes and shops. 5) Balmain While many Sydneysiders are arguing whether north or east is best, the others go inner west for a completely different lifestyle, still with easy access to the harbour ferries and the city. Chris Gray hosts Your Property Empire each Friday on Sky News Business channel. www.yourempire.com.au, www.chrisgray.com.au and follow Chris on Twitter: @ChrisGrayEmpire.