Nearly all suburbs on Australia’s ‘Top Rental Performers’ list are located in regional and coastal markets or Australia's smaller capitals, a result influenced by housing affordability and an extended period of growth across the Eastern capitals, which is only recently showing signs of ending.
CoreLogic has today released the Top Rental Performers Report for September 2018, which offers some valuable insight for investors, as explained by Head of Research, Tim Lawless: “87 suburbs in Australia were identified where houses or units have an estimated gross rental yield of 5% or more per annum. To get onto this ‘Top Rental Performers’ list, suburbs needed to demonstrate solid rental yields, consistent rental growth and vacancy rates of less than 3%. They also had to perform consistently from a capital growth perspective”. Tasmania tops the list, with 28 suburbs identified (22 suburbs for houses, and 6 suburbs for units), but honours for the top individual rental performance goes to Queensland’s Edge Hill, where units have a rental yield of 8.30% and a median value of $183,383.
The report features 48 suburbs where houses represented good rental opportunities and 39 suburbs where units offered the best rental value, while at the same time demonstrating capital growth.
Following Tasmania’s top placing is Australian Capital Territory with 19 suburbs (all for units), New South Wales with 17 (14 for houses, 3 for units), and Queensland with 15 (6 for houses, 9 for units).
Just 4 suburbs in South Australia (all for houses) and Victoria (2 for houses, 2 for units) made the cut. None from Western Australia or the Northern Territory met the ‘Top Rental Performers’ criteria. Median house values in the report ranged from $208,191 to $576,141 and for units between $183,383 and $504,456.
Lawless comments: “This analysis identifies areas where finding a positively geared property investment is more likely. But, as with all investing, individual research is critical: including visiting the area, understanding local development and infrastructure plans, and assessing personal financial circumstances. Paying the right price for the right property will also play a very important role”.