For many years, property investment has been seen as the domain of the wealthy investor with cash to spare, but right now property investment is well and truly within reach for everyday Australians, according to Aussie Executive Chairman John Symond.
Reviewing suburb statistics commissioned from RPData, Mr Symond revealed there are at least half a dozen suburbs in each capital city where gross rental yields are greater than the cost to repay the mortgage, and in some cases, where rent is increasing year on year.
“It’s the perfect time for the average Australian to consider a move into property investment if they have some money saved, “ says Symond. “Both fixed rates and variable rates are the lowest they have been in years, with interest rates can be below 5 per cent, housing prices in some areas are historically low but are starting to move back up and now investors can earn rental yields between 5 and 10 per cent in some areas, and as high as a whopping 16 per cent in one area of Darwin.
“Properties with high rental yields¹ are of benefit to those investors who have less disposable income that they can use to pay the property’s associated bills. If they are earning higher gross rental yields, they can afford to own it in the first place, where otherwise they might not be able to,” he continues. “Every day Australians can seriously consider moving into the investment property market and having the rent cover the mortgage. In effect they could ‘set and forget’ an investment plan for their future.”
The best suburb in the country for investors to consider was Bellamack in Darwin with a whopping 16.9% rental yield coupled with an even bigger 24% increase in rents in the last 12 months, however RP Data identified at least half a dozen in each city that showed tremendous investment potential over the last 12 months.
RPData’s Senior Research Analyst Cameron Kusher explains: “This research is primarily looking at those areas where the ordinary Australian on an average income may be able to afford to enter the investment market, and as such we looked at properties that were under $500,000, and which earned high gross rental yields. We also found that many of these were also experiencing significant rental growth over the 12 months to December 12.
The top half dozen for gorss rental yield in each capital city were as follows as derived from the RP Data analysis:
Sydney: Bella Vista (11.5%); Ultimo (9.0%); Wyong (7.3%) plus high rental growth of 24.1%; Bradbury (7.3%); Tregear (7.3%); Jamisontown (7.1%)
Canberra: Franklin (6.5%); Gungahlin (6.3%); Ngunnawal (6.1%); Palmerston (6.1%); Braddon (5.9%); Calwell (5.9%)
Darwin: Bellamack (16.9%) plus high rental growth of 24%; Johnston (10.2%); Parap (6.6%) plus high rental growth of 22.2%; The Gardens (6.5%) plus high rental growth of 14.6%; Nightcliff (6.4%) plus high rental growth of 14.3%; Moulden (6.5%) plus high rental growth of 14.3%.
Brisbane: Goodna (8.2%); Woodridge (7.6%); Dinmore (7.3%); Wynumm West (7.2%); Gailes (7.2%); Waterford West (7.0%)
Adelaide: Elizabeth east (8.2%); Elizabeth Downs (7.9%); Elizabeth North (7.8%); Elizabeth Grove (7.7%); Elizabeth South (7.5%); Elizabeth Vale (7.4%)
Melbourne: Carlton (7.8%); Whittlesea (6.4%); Chirnside Park (6.1%); Broadmeadows(5.9%); Melton (5.8%); Melbourne (5.7%)
Greater Hobart: Chigwell (7.6%); Risdon Vale (7.5%); Primrose Sands (7.2%); New Norfolk (7.0%); Warrane (6.8%); Bridgewater( 6.7%)
Perth: Kwinana (7.0%); Brookdale(6.9%); Spearwood (6.8%); Perth (6.8%) plus high rental growth of 23.8%; Armadale (6.6%); Baywater (6.6%).
¹ To calculate gross rental yield on an investment property, multiply rent by 52 weeks and divide by purchase price and multiply by 100 to get a percentage.