According to The Top Rental Performers Report (31 Oct 2017) from CoreLogic Market Trends, the state to invest in at present is Tasmania. As you can see in the table below, the top three rental yield suburbs are all in Tasmania followed closely by Reedy Creek and Nambour in Queensland.
https://propertynews.onthehouse.com.au/looking-cash-flow-positive-property-investment-tasmania-tops-rankings#.WqNgtmpubIUThis data was collected by identifying suburbs that had consistent rental yields of at least 5%, low vacancy rates of below 3% and consistent rental growth. The report identified a total of 32 suburbs with good investment opportunities.
Queensland boasted a total of 24 suburbs followed by 19 in New South Wales and 18 in Tasmania. The ACT has 11 suburbs featured while Victoria had only 3. The other states (Western Australia, South Australia and Northern Territory) had none.
Let’s look at some of the top suburbs in more detail.
Chigwell Tasmania
Chigwell is located just north-west of Glenorchy and has a total population of 1639. Properties consist mainly of houses (74.6%) with some semi-detached properties such as townhouses (21.3%) and a small selection of units (3.7%). Around 32.1% of properties in Chigwell are rentals.
The median house price is $260,000 with an average weekly rent of $320. The suburb has seen a capital gain of 21.5% over the past twelve months.
Warrane Tasmania
Warrane is a suburb of Hobart and has a total population of around 2200. Properties consist mainly of houses (82.7%), some semi-detached dwellings (9.9%) and a number of units (5.4%). This is another high rental suburb with a total of 41.2% of all properties being rentals.
The median house price is $270,000 with an average weekly rent of $330. Units in this suburb have a median price of $286,000 and an average weekly rent of $345. The capital gain over the past twelve months is 8% for houses and 7.42% for units.
https://www.smartpropertyinvestment.com.au/data/tas/7018/warraneGlenorchy Tasmania
Glenorchy is large suburb north of Hobart and has a population of 10059. Properties in this suburb consist of 68.3% houses, 23.3% units and 7.9% of semi detached dwellings. 31.3% of all properties in Glenorchy are rentals.
The median house price is $312,500 with an average weekly rental of $360 whereas the median price for units is $233,500 with an average weekly rental of $280. Properties in Glenorchy have achieved a capital gain of 13.64% for houses and 13.35% for units over the past twelve months.
https://www.smartpropertyinvestment.com.au/data/tas/7010/glenorchyReedy Creek Queensland
Reedy Creek is a suburb on the Gold Coast, just inland from Burleigh Heads. It has a total population of 4665. Properties in this suburb consist of houses (57.8%) and semi detached properties, mainly townhouses (42%).
The median house prices in Reedy Creek are $789,200 with an average weekly rental of $700. Units in this suburb have a median value of $365,000 with an average weekly rental of $400. Around 27.1% of properties in Reedy Creek are rentals. This suburb has achieved a capital gain growth of 5.23% for houses and 10.61% for units over the past twelve months.
https://www.smartpropertyinvestment.com.au/data/qld/4227/reedy-creekNambour Queensland
Nambour is a large suburb in the Sunshine Coast hinterland with a total population of 9776. Properties in Nambour consist mainly of houses (71.5%), units (20.5%) and semi detached properties (6.9%). Around 32.1% of all properties in Nambour are rentals.
The median house price in Nambour is $380,000 with an average weekly rental of $390 whereas units have a median price of $280,000 with a weekly rental of $315. Nambour has achieved a growth in capital gain of 5.56% for houses and 1.45% for units over the past twelve months.
https://www.smartpropertyinvestment.com.au/data/qld/4560/nambourBrighton Tasmania
Brighton is an inland suburb in Tasmania north of Hobart and has a total population of 3147. Properties in this suburb consist mainly of houses (96.5%) and units (2.5%). Only 11.9% of all properties are rentals.
The median house price is $320,000 with an average weekly rental of $355 and units are around $237,600 with a weekly rental of $280. This suburb has achieved a capital gain growth of 5.61% for houses and 10% for units over the last 12 months.
https://www.smartpropertyinvestment.com.au/data/tas/7030/brightonProspect Vale Tasmania
Prospect Vale is an inland suburb south of Launceston and has a total population of 4624. Properties in Prospect Vale consist of houses (78.1%), units (9.2%) and semi detached dwellings (12.5%). A total of 20.8% of all properties are rentals.
The median house price in Prospect Vale is $354,500 while units average at $245,000. The average weekly rental of a house is $360 and units rent at $255. The suburb has achieved a capital gains growth of 6.22% for houses but only 0.62% for units over the past twelve months. It’s interesting to note though, that there has been no capital growth for houses in the past 3 months and a significant drop for units.
https://www.smartpropertyinvestment.com.au/data/tas/7250/prospect-valeElanora Queensland
Elanora is a growing suburb in the Gold Coast Hinterland with a total population of 11676. Properties in Elanora consist of houses (77.5%), units (6.4%) and semi detached dwelling, most likely duplexes (16%). Of all properties in Elanora, only 17.6% are rentals.
The median price for houses is $669,000 with an average rental of $600 per week and $369,000 for units with a weekly rental of $430. Houses in this suburb achieved a capital gain of 5.11% over the past 12 months however units only achieved a growth of 1.37% and growth has dropped for units over the past 3 months.
https://www.smartpropertyinvestment.com.au/data/qld/4221/elanoraAs you can see from the above examples, Tasmania still seems to be a great place to purchase a cash-flow positive investment property. Properties in the areas mentioned seem to be highly affordable for most investors and are still achieving good capital gains growth.
In the next set of articles, we’ll look at some of the other states in more detail to identify suburbs which have good investment potential in each state.
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