Australia Property Investment
24 May 2020 by News DeskAustralia Property Investment: Here are ten locations across Australia that are worth investigating for investment purposes if you are seeking an apartment / unit with the prospect of solid returns.
1. Hobart apartments
Tasmania as a whole has risen to the top of many property investors lists, mainly because it is affordable compared to Australia’s other state capitals, but also due to lifestyle factors which continue to draw people to the Apple Isle.
In terms of units Hobart is worth investigating because of low prices – According to CoreLogic hedonic home value index December 2018 Hobart’s median unit price at $381,819 with strong rental demand. Rental market conditions were up by 5.8 per cent over the 2018 while unit sales in Hobart recorded standout growth of 19.6 per cent. Rental properties are also in high demand with tight vacancy rates of 2.0 per cent. QBE’s Australian Housing Outlook believes this will continue and forecasts a median unit price in Hobart of $420,000 by mid 2020, with cumulative projected growth of 9 per cent.
2. Newcastle apartments
Like Hobart, Newcastle has successfully shed its ugly duckling image, and is now a city with a robust and self-sustaining local economy to match its new identity. This includes substantial investment in infrastructure, an astute tourism marketing campaign that has made it one of the fastest growing regional towns in NSW, where units posted annual returns of 7.1 per cent in 2018.
3. Wollongong apartments
Wollongong property had a stellar 2018 posting compound annual growth of 7.6 per cent, with a solid local economy that has education and tourism as the primary drivers. Sky high prices in Sydney have also helped, which is partially the reason why some 1100 people move into the region every week.
The local education sector is also a strong driver for rental accommodation, and should continue to keep vacancy rates low for the foreseeable future. Suburbs to look out for are Fairy Meadow, Wollongong CBD, North Wollongong, Keiraville and West Wollongong, which are all serviced by Wollongong’s local free bus loop, which is a popular form of transport for university students.
4. Sunshine Coast and Gold Coast apartments
The Sunshine Coast and Gold Coast outperformed Brisbane in 2018, with greater price growth over the year. This was partially due to the 2018 Commonwealth Games, but also as a result of lifestyle factors which has seen an uptick in interstate migration and strong population growth to both locations.
CoreLogic reported that over the year to March, rental yields at 5.4 per cent.
You do still need to do your homework, and look at supply/demand indicators. In terms of specific locations, Buddina, Forest Glen and Noosa Heads all posted gains in 2018.
5. Brisbane apartments
While there are pockets of oversupply in the Brisbane unit market, there are still gems where older established apartments are in demand. The most obvious of these is the trendy New Farm, which is close to the CBD and where apartments have larger floor areas than many newer developments.
Here the median price for a unit is $383,904 and realestate.com.au lists it as a high demand postcode with 689 visits per property (March 2018), which is nearly double the average for the state.
Australia Property Investment
6. Melbourne apartments
In Melbourne some of the highest demand for rental properties is in Fitzroy and Carlton, which are both popular for their proximity to educational facilities and lifestyle attractions.
The median price of a unit in Fitzroy is currently $753,000, while a one bedroomed apartment in the suburb is $451,000. With 859 visits per property this is higher than the state average, and where you can expect $450/pw rental for a one bedroom, $645/pw for a two bedroom and $810/pw for three bedroom unit.
The Real Estate Institute of Victoria (REIV) lists Dandenong (22.1 per cent) Kew (19.3 per cent) and Brunswick East (12.9 per cent) as suburbs with the highest growth in median unit prices for 2018.
7. Canberra apartments
If you want to buy an apartment in a reliable rental market then Canberra should be on your shortlist. The administrative capital has a diverse range of tenants from students to government employees that saw median rents rise by 5.3 per cent over 2018.
Average rental yields over the December quarter is 5.7 per cent with a median value of $440,813.
8. Sydney apartments
Affordability is a huge issue if you are considering an entry to the Sydney market, even for units. Having said that, if you are looking for long term capital growth then investing in a unit in the cities eastern suburbs is very likely a solid investment.
This is especially true for suburbs on the new light rail line that will travel from the CBD to Kensington, passing through Surry Hills and Randwick.
In terms of rental income, you can expect a median in the region of $582 for a unit, with gross rental yields for units in Sydney were 3.8 per cent in 2018.
If you are looking for lower priced properties, units in regional centres like Parramatta are more affordable.
9. Perth apartments
Don’t ignore the WA capital, as the Perth property market is quietly recovering with state government spending big on infrastructure, including rail projects and shopping centres. Sales records for the December 2018 showed some growth, which is evidence of life coming back to the state after the end of the mining boom.
Garden City in Booragoon is one postcode to watch, as is the waterfront development at Bunbury.
10. Darwin apartments
Property is very affordable in Darwin as the market continues to struggle. This could offer opportunities for savvy investors, but you do need to do your homework. Rental yields recorded the highest of all the capital cities over the three months to December 2018 at 6.6 per cent with median unit values $305,989.
Spotting suburbs with high growth potential
If you are a property investor you should be looking to shortlist suburbs with high growth potential, so you can maximise your ROI in the shortest possible time frame. The secret is to find an area with as many things going for it as possible, such as:
A rapidly growing population, which is going to drive demand for your property
A local economy that has a variety of active employers and industries
Anywhere where government is investing in local infrastructure projects, including new transport and public services
Suburbs where the rental yield is rising, as this indicates there is strong demand for rental accommodation in the area.
Areas where the growth in median household income is higher than inflation. Low housing supply/high demand from buyers.
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