Australia’s BEST RENTAL SUBURBS

By
14/06/2014

Finding property investments that generate both capital growth and solid rental yields is getting harder as prices continue to soar in many markets. With this in mind, Miriam Bell scours the country for areas that are still flying under the radar but have all the right fundamentals for strong growth in the future while currently achieving solid rental returns.

One of the most desirable features of an investment property is the ability to generate enough income to cover the holding cost while still achieving solid capital growth. As many inner-city suburbs have already seen strong price growth over recent months, finding property with a high rental yield is near impossible. The good news is that there are still many areas with strong growth fundamentals that are currently achieving spectacular rental yields.

With the help of OnTheHouse onthehouse.com.au), we selected the best rental markets where you can find properties with strong cash flow and growth potential.

We looked at areas that have had strong rental yield increases during the past 12 months – due to an increase in demand or rent but not due to falling prices – and that were still achieving capital growth.

Rental yield is calculated by taking the weekly rent amount, multiplying it by 52, dividing it by the median price, and then multiplying it by 100.

*Data sources = Onthehouse.com.au, DSRScore.com.au, ABS

BOMADERRY, NSW

Market data

  • Median house value.... $287,000
  • Capital growth over past 12 months: ...........3.7%
  • Capital growth prediction over next 5 years (% pa)....5.71%
  • Current rental yield ...........6.69%
  • Rental yield increase over last year ....................... 0.35%
  • Vacancy rate .........................1.51%


Transport links, particularly the Bomaderry train terminus, are crucial to the rural NSW suburb’s high rental yields. However, it also happens to be conveniently located next to the regional business centre of Nowra. The presence of the Royal Australian Navy, along with the nearby University of Wollongong Shoalhaven Campus, contributes to a healthy tenant pool.

Key features of the suburb include:

  • Strong rental market with renters making up 32% of total households
  • Families account for 43% of households, ensuring stable housing demand
  • Most in-demand type of housing: three- to four-bedroom homes on large blocks of land
  • Solid rental prospects for the suburb with the recent announcement that the stretch of Princes Highway which runs through it will be upgraded in the near future


LAVINGTON, NSW

Market data

  • Median unit value ........$165,000
  • Capital growth over past 12 months ......... 4.66% 
  • Capital growth prediction over next 5 years (% pa)... 5.23%
  • Current rental yield ...........6.27%
  • Rental yield increase over last year ....................... 0.03%
  • Vacancy rate ........................ 1.95%


Sitting just north of the Albury CBD, Lavington also has its own commercial area. This makes this largely residential area the second centre of the city, and drives its healthy rental yields.

Key features of the suburb include:

  • Solid rental market with renters making up 36% of households
  • Popular with families, which account for 43% of households
  • Most in-demand type of housing: units near public transport for easy access to the CBD
  • Close proximity to the Albury-Wodonga campus of Charles Sturt University, the Thurgoona Training Academy and the Norske Skog Paper Mills means Lavington’s rental market is likely to remain strong


WAUCHOPE, NSW

Market data

  • Median house value ........$296,000
  • Capital growth over past 12 months ...............5.35%
  • Capital growth prediction over next 5 years (% pa) ....... 6.58%
  • Current rental yield..................6.16%
  • Rental yield increase over last year ..............................0.18%
  • Vacancy rate ................................. 0.9%


Surrounded by several major state forests, Wauchope’s economy was built on the timber industry. But these days the mid north coast town, which sits between two major highways, revolves around dairy and tourism.

Key features of the suburb include:

  • Strong rental demand with renters making up 33% of households
  • Desirability for families, which account for a signifi cant 51% of households
  • Strong population growth of 23% between 2006 and 2011
  • Most in-demand type of housing: the high percentage of families means multi-bedroom houses with yards are sought after
  • Wauchope’s railway station is an interchange for several nearby centres. One of these is Port Macquarie – a large, thriving regional centre recently found to be Australia’s least affordable smaller city. This will benefit Wauchope’s rental market as more people choose to commute to work in Port Macquarie


SANCTUARY POINT, NSW

Market data

  • Median house value ........$261,000
  • Capital growth over past 12 months .............. 2.27%
  • Capital growth prediction over next 5 years (% pa) ........9.03%
  • Current rental yield..................5.92%
  • Rental yield increase over last year ..............................0.18%
  • Vacancy rate ...............................2.74%


Scenic St Georges Bay is home to the coastal town of Sanctuary Point. A ‘lifestyle’ location, the area itself is driven by tourism, but its proximity to the regional hub of Nowra means it is popular with commuters.

Key features of the suburb include:

  • Strong rental market with renters making up 27% of households
  • Popular with families, which account for 44% of the demographic
  • Solid population growth of 6% over the fi ve years to 2011
  • Most in-demand type of housing: three-bedroom homes are most desired in the area
  • There are rumours that a big new shopping centre is to be built in the near future. If this development goes ahead, it should fuel further growth in rental demand in an already tight rental market.


BARRACK HEIGHTS, NSW

Market data

  • Median house value ........$385,500
  • Capital growth over past 12 months ......................1%
  • Capital growth prediction over next 5 years (% pa) ........7.90%
  • Current rental yield.........................6%
  • Rental yield increase over last year ..............................0.07%
  • Vacancy rate ...............................0.72%


Enjoying the abundance of parkland, Barrack Heights sits on the Illawarra Escarpment. Its close proximity to the Shellharbour CBD and the area’s two main hospitals contributes to its healthy rental yields.

Key features of the suburb include:

  • Solid demand from renters, which make up 30% of households
  • Favoured by families of various types, which account for a hefty 52% of households
  • Strong population growth of 19% over the five years from 2006 to 2011
  • Most in-demand type of housing: the area’s popularity with families means that multi-bedroom houses with yards are king
  • Barrack Heights is just 16km from the major regional city of Wollongong. This should only enhance its rental attractiveness in the coming years


HAZELBROOK, NSW

Market data

  • Median house value......... $354,000
  • Capital growth over past 12 months........................... 4.02%
  • Capital growth prediction over next 5 years (% pa).........6.59%
  • Current rental yield....................5.67%
  • Rental yield increase over last year.................................0.02%
  • Vacancy rate....................................2.2%


A close-knit Blue Mountains community, Hazelbrook inspires passion in those who live there. With the Great Western Highway running through it, and reliable rail services, areas like Penrith, Blacktown and Parramatta are easily accessible for commuters.

Key features of the suburb include:

  • Predominantly an owner-occupier suburb, which means competition for rental property is tight
  • Relatively well off demographic, with the median weekly household income at $1,247
  • Strong population growth of 45% over the five years between 2006 and 2011
  • Most in-demand type of housing: large three- to four-bedroom brick houses on decent-sized blocks reign supreme in this market
  • As Sydney prices soar, the affordable lifestyle options on offer in Hazelbrook mean the suburb is likely to increase in appeal. In turn, rental yields look set to remain healthy.


ALBION PARK, NSW

Market data

  • Median house value......... $390,500
  • Capital growth over past 12 months...................................1%
  • Capital growth prediction over next 5 years (% pa)......... 6.65%
  • Current rental yield...........................6%
  • Rental yield increase over last year................................ 0.06%
  • Vacancy rate..................................1.21%


Albion Park is a regional transit hub: the Illawarra Highway runs through it and the Princes Highway is just north of the suburb. These roads bring both workers and travellers into the region. It is also close to the Illawarra Regional Airport.

Key features of the suburb include:

  • Predominantly an owner-occupier suburb with just 16% of households renting
  • High-income-earning residents with a median weekly household income of $1,483
  • Strong population growth of 10% between 2006 and 2011
  • Most in-demand type of housing: large three- to four-bedroom family homes with garden sections and views are popular
  • Home to the Croom Regional Sporting Complex as well as a range of good schools, Albion Park is particularly appealing to young families. This is unlikely to change in the near future and means good rental yields should continue


MURWILLUMBAH, NSW

Market data

  • Median house value..........$321,000
  • Capital growth over the past 12 months..........................-1%
  • Capital growth prediction over next 5 years (% pa)..........7.59%
  • Current rental yield................... 5.57%
  • Rental yield increase over last year.................................0.12%
  • Vacancy rate................................. 0.62%


Currently considered one of the top 10 sea/tree change towns in Australia, Murwillumbah sits on the Tweed River in the foothills of the McPherson Range. It is known for the art deco style that dominates its architecture.

Key features of the suburb include:

  • Solid demand from renters, which make up 31% of households
  • Strong demand from families, which account for 49% of households
  • High population growth of 18% over the five years from 2006 to 2011
  • Most in-demand type of housing: attractive two- to three-bedroom homes on decent blocks dominate 
  • Murwillumbah functions as a shopping and small commercial centre for surrounding villages. This, along with the continuing influx of tree changers, drives its rental market and keeps yields respectable


KINGSCLIFF, NSW

Market data

  • Median house value.........$604,000
  • Capital growth over 12 months.....................................5.38%
  • Capital growth prediction over next 5 years (% pa)........11.81%
  • Current rental yield................... 3.88%
  • Rental yield increase over last year.................................0.16%
  • Vacancy rate..................................0.76%


Sitting just south of Tweed Heads, beachside Kingscliff has a long history as a popular tourist destination. It is currently being developed as one of the North Coast’s lifestyle and leisure centres.

Key features of the suburb include:

  • Solid rental market with 36% of households renting
  • Popular with families, which account for 45% of households
  • Population surged 49% over the five years from 2006 to 2011


COBRAM, VIC

Market data

  • Median house value ........$210,000
  • Capital growth over past 12 months .........................2.39%
  • Capital growth prediction over next 5 years (% pa) ........3.92%
  • Current rental yield................. 6.68%
  • Rental yield increase over last year ............................. 0.38%
  • Vacancy rate ......................................0%


The picturesque country town of Cobram sits alongside the Murray River. Surrounded by orchards, dairy farms and vineyards, the town also serves as its LGA headquarters.

Key features of the suburb include:

  • Healthy rental market with 30% of households currently renting
  • Popular with families
  • Solid population growth of 8% over five years from 2006 to 2011
  • Most in-demand type of housing: family homes with several bedrooms and on decent-sized blocks rule this market
  • Cobram is home to Australia’s largest dairy cooperative, as well as a major milk processing plant and several juice processing factories. This makes for a permanently strong tenant pool and a healthy rental market


CRANBOURNE EAST, VIC

Market data

  • Median house value......................................................$383,500
  • Capital growth over past 12 months...........................2.39%
  • Capital growth prediction over next 5 years (% pa).......................................................5.61%
  • Current rental yield...............................................................5.53%
  • Rental yield increase over last year...............................0.24%
  • Vacancy rate....................................................................................0%


Located 44km from the centre of Melbourne, Cranbourne East is part of a newly developing area. As one of the suburbs earmarked by the Growth Area Authority, development of the area is ongoing.

Key features of the suburb include:

  • Highly popular among owner-occupiers, with only 17% of households renting, which means competition for rental properties is tight
  • Desirable area for families, which account for 64% of total households
  • Relatively affluent, with weekly household income at $1,395
  • Astronomical growth in population. Between 2006 and 2011 the population grew by an astounding 102%
  • Most in-demand type of housing: new three- to fourbedroom family homes are the preferred housing type
  • Cranbourne East is the beneficiary of a rapidly growing population, attracted by good local facilities and the area’s affordability. Should rumours that a railway station is planned for the suburb prove to be true, the already solid rental market can only improve


HORSHAM, VIC

Market data

  • Median house value.......................................................$216,500
  • Capital growth over past 12 months............................2.09%
  • Predicted 5-year growth (% pa)......................................2.28%
  • Current rental yield............................................................... 6.71%
  • Rental yield increase over last year.................................0.12%
  • Vacancy rate.............................................................................2.26%


Known as the capital of the Wimmera region, Horsham is bisected by the Wimmera River. The town’s economy is largely based around local government administration and services. However, both tourism and the local arts industry are also starting to make their mark on the town’s economy.

Key features of the suburb include:

  • Strong rental market with 29% of households renting
  • Solid population growth of 5% over the five years from 2006 to 2011
  • Most in-demand type of housing: solid brick family homes are popular, but there is growing demand for townhouses and units
  • The Wimmera region’s main hospital is in Horsham. This, along with LGA workers, provides a steady tenant pool for the rental market, which currently offers good returns


MOOROOPNA, VIC

Market data

  • Median house value......................................................$206,000
  • Capital growth over past 12 months............................1.52%
  • Capital growth prediction over next 5 years (% pa).......................................................4.13%
  • Current rental yield...............................................................6.59%
  • Rental yield increase over last year.................................0.10%
  • Vacancy rate....................................................................................0%


Situated in the Goulburn Valley irrigation district, Mooroopna is part of Victoria’s ‘food bowl’. It is home to Ridley AgriProducts and E D Parsons, but has become popular as a family-friendly residential base for workers in nearby Shepparton.

Key features of the suburb include:

  • Strong rental market with 32% of households renting
  • Desirable area for families, which make up 51% of total households
  • Healthy population growth of 8% between 2006 and 2011
  • Most in-demand type of housing: large three- to fourbedroom brick homes on decent blocks are the most popular among buyers
  • The rental market is already healthy. However, if plans for a major new freight and logistics centre just south of the town proceed, the market is poised to become even more attractive


SHEPPARTON, VIC

Market data

  • Median unit value............................................................$201,000
  • Capital growth over past 12 months............................ 2.31%
  • Predicted 5-year growth (% pa)......................................3.69%
  • Current rental yield................................................................5.71%
  • Rental yield increase over last year................................0.07%
  • Vacancy rate.............................................................................1.36%


Having laboured with a rough reputation, Shepparton is actually a major regional service city. It is the seat of the Greater Shepparton LGA, an agricultural and manufacturing centre and the site of the Goulburn Valley irrigation system.

Key features of the suburb include:

  • Large pool of renters with 36% of households renting
  • Targeted by families, which account for 53% of total households
  • Solid population growth of 6% between 2006 and 2011
  • Most in-demand type of housing: three-bedroom family homes with units offer the best deals in this market
  • Shepparton’s status as a regional hub, along with the presence of a military regiment in the area, ensure there is a tight rental market. The resulting low vacancy rates should keep rental yields healthy


DAYLESFORD, VIC

Market data

  • Median house value......................................................$425,000
  • Capital growth over past 12 months.............................7.57%
  • Capital growth prediction over next 5 years (% pa)......................................................8.93%
  • Current rental yield...............................................................4.52%
  • Rental yield increase over last year................................0.06%
  • Vacancy rate.............................................................................3.05%


The former gold-mining town of Daylesford is now famous for the abundance of natural spring mineral spas scattered around it. As a result, it has become a major tourist, holiday and alternative-lifestyle town.

Key features of the suburb include:

  • Healthy rental market with 29% of households renting
  • Strong population growth of 22% over five years from 2006 to 2011
  • Most in-demand type of housing: cottages and small family homes with gardens are popular among buyers
  • Picturesque, full of historic buildings, and a developing culinary centre, Daylesford’s appeal to the tree changer demographic is growing. The town’s star is on the rise and its solid rental market is set to benefit further


TARNEIT, VIC

Market data

  • Median house value...................................................... $375,000
  • Capital growth during past 12 months........................ 5.51%
  • Capital growth prediction over next five years (% pa).................................................9.08%
  • Current rental rate................................................................. 4.81%
  • Rental yield increase over last year................................0.04%
  • Vacancy rate.............................................................................1.46%


Tarneit is on Melbourne’s rural-urban fringe, 25km from the CBD. Large-scale residential development of the suburb only started in the 1990s. It is now experiencing very rapid growth due to a lack of space in surrounding areas.

Key features of the suburb include:

  • Strong rental demand with 28% of the population currently renting
  • Popular with families, which account 69% of total households
  • Relatively affluent demographic with a median weekly household income of $1,563
  • Huge population growth of 188% between 2006 and 2011
  • Most in-demand type of housing: large family homes on good-sized blocks
  • With work on the Tarneit Town Centre, a major shopping centre, as well as a train station underway, workers are being attracted to the area. This bodes well for the future of Tarneit’s already decent rental market


HIGHETT, VIC

Market data

  • Median house value.... $757,500
  • Capital growth during past 12 months ...................6.48%
  • Capital growth prediction over next 5 years (% pa)...... 7.0%
  • Current rental yield ...........3.59%
  • Rental yield increase over last year ....................... 0.03%
  • Vacancy rate ........................ 1.67%


One of Melbourne’s more affordable bayside suburbs, Highett has undergone substantial change in recent years. This is due to its proximity to the CBD and to Port Phillip Bay. It is now particularly attractive to young families and professionals.

Key features of the suburb include:

  • Healthy rental market with 25% of households renting
  • Favoured by families, which make up over half (51%) of households
  • Relatively affl uent demographic with a median weekly household income of $1,386
  • Solid population growth of 9% over the fi ve years from 2006 to 2011
  • Most in-demand type of housing: three- to four-bedroom homes with gardens
  • Highett’s continuing rejuvenation and comparative aff ordability should ensure ongoing growth in demand, with improving rental


WOODRIDGE, QLD

Market data

  • Median unit value .........$176, 500
  • Capital growth during past 12 months .....................6.79%
  • Capital growth prediction over next 5 years (% pa) ....2.59%
  • Current rental yield .............8.02%
  • Rental yield increase over last year .........................0.25%
  • Vacancy rate ...........................1.21%


Located about 20km from the Brisbane CBD, Woodridge has – historically – had a slightly rough reputation. However, its aff ordability, convenience and renovation potential mean the suburb has started to change.

Key features of the suburb include:

  • Popular suburb for renters, with more than half (55%) of household in the area renting
  • Sought after by families, which make up 58% of total households
  • Healthy population growth of 7% over fi ve years between 2006 and 2011
  • Most in-demand type of housing: there are plenty of older-style homes with decent-sized yards around, but units rule this market
  • Affordable purchase costs combined with growing appeal mean there are currently excellent rental returns to be found in Woodridge. This ratio might change as bargain hunters start to discover the suburb


MOUNT LOUISA, QLD

Market data

  • Median house value .....$369,500
  • Capital growth during past 12 months ......................0.17%
  • Capital growth prediction over next 5 years (% pa) ....4.95%
  • Current rental yield .............5.88%
  • Rental yield increase over last year ......................... 0.21%
  • Vacancy rate .................................3%


Nestled in the foothills of its namesake, picturesque Mount Louisa is one of Townsville’s growth suburbs. With close proximity to the CBD, as well as several other shopping districts, it has easy access to all that residents need.

Key features of the suburb include:

  • Solid rental market with 31% of the population currently renting
  • Relatively affluent residents with a median weekly household income of $1,740
  • Between 2006 and 2011 the population grew by a hefty 68%
  • Most in-demand type of housing: relatively new homes with several bedrooms are popular
  • With a Royal Australian Airforce Base nearby, Mount Louisa already has a reliable tenant pool. Plans for the development of another school are afoot and should enhance the suburb’s appeal. This means rental yields are positioned to improve further


CARRARA, QLD

Market data

  • Median house value..... $438,000
  • Capital growth during past 12 months......................3.86%
  • Capital growth prediction over next 5 years (% pa).....2.97%
  • Current rental yield:.............6.09%
  • Rental yield increase over last year...........................0.18%
  • Vacancy rate........................... 0.91%


One of the Gold Coast’s ‘hidden treasure’ suburbs, Carrara is close to the CBD yet removed from the hustle and bustle. It is a family-friendly area with easy access to a wide range of amenities and services.

Key features of the suburb include:

  • Large pool of renters with 32% of households currently renting
  • Relatively affluent residents with a median weekly household income of $1,196
  • Between 2006 and 2011 the population grew by 8%
  • Most in-demand type of housing: homes with several bedrooms and with gardens are in demand, but apartments are making inroads into the market
  • Already home to the Carrara Sports Precinct, the suburb’s sporting facilities are set to be developed further as the base for the 2018 Commonwealth Games. This development can only serve to boost Carrara’s rental market


NERANG, QLD

Market data

  • Median unit value.........$243,000
  • Capital growth during past 12 months.................... 4.40%
  • Capital growth prediction over next 5 years (% pa)....2.73%
  • Current rental yield............. 7.10%
  • Rental yield increase over last year......................... 0.12%
  • Vacancy rate..........................0.92%


Close to Surfer’s Paradise, leafy Nerang has large swathes of forest reserves and the Pacific Highway running through part of it. It has become a regional transportation hub and also hosts a number of shopping centres.

Key features of the suburb include:

  • Strong rental market with 33% of households renting
  • Desirability for families, which make up 52% of total households
  • Relatively good earning power, with a median weekly household income of $1,007
  • Most in-demand type of housing: multi-bedroom family homes with large gardens are in demand, but units are a safe investment
  • Eternally popular with families, Nerang has long had a healthy rental market. With economic prospects for the Gold Coast looking up, the suburb’s attractive returns are likely to continue


HENDRA, QLD

Market data

  • Median house value...............................................$790,000
  • Capital growth during past 12 months................. 7.37%
  • Capital growth prediction over next 5 years (% pa).............................................. 7.44%
  • Current rental yield.......................................................4.59%
  • Rental yield increase over last year..........................0.11%
  • Vacancy rate....................................................................2.98%


Hendra is long associated with horses, thanks to its breeding stables, and its racecourse remains a feature of the suburb today. While just 6km from Brisbane’s CBD, Hendra has a country town feel due to its wide streets and well-established gardens.

Key features of the suburb include:

  • Strong rental market with renters making up 28% of households
  • Favoured by families, which account for 51% of total households
  • Relatively well off residents with a median weekly household income of $1,894
  • Between 2006 and 2011 the population grew by 7%
  • Most in-demand type of housing: the area is demolition controlled so family-suitable Queenslander-style houses are highly popular
  • Hendra’s proximity to the city and its attractive heritage quality make it an up-and-coming suburb. Currently, its rental market is solid but returns are likely to improve as growth starts to have an impact


NAMBOUR, QLD

Market data

  • Median house value...............................................$309,500
  • Capital growth during past 12 months.................3.58%
  • Capital growth prediction over next 5 years (% pa)..............................................4.93%
  • Current rental yield.......................................................6.05%
  • Rental yield increase over last year.........................0.09%
  • Vacancy rate....................................................................0.92%


At the centre of the Sunshine Coast’s hinterland sits the town of Nambour. Described as the area’s “best kept secret” by its fans, it is actually the administrative centre of the Sunshine Coast region.

Key features of the suburb include:

  • Strong rental market with renters making up 28% of households
  • Favoured by families, which account for 51% of total households
  • Relatively well off residents with a median weekly household income of $1,894
  • Between 2006 and 2011 the population grew by 7%
  • Most in-demand type of housing: the area is demolition controlled so family-suitable Queenslander-style houses are highly popular
  • Hendra’s proximity to the city and its attractive heritage quality make it an up-and-coming suburb. Currently, its rental market is solid but returns are likely to improve as growth starts to have an impact Nambour Hospital, Nambour has a steady tenant pool and a strong rental market. The market is set to benefit further from the ongoing revitalisation of the town


WYNNUM, QLD
Market data

  • Median house value.............................................. $498,000
  • Capital growth during past 12 months..................3.13%
  • Capital growth prediction over next 5 years (% pa).............................................. 7.56%
  • Current rental yield.......................................................4.97%
  • Rental yield increase over last year.........................0.08%
  • Vacancy rate.....................................................................1.16%


Just 16km from the Brisbane CBD sits the bayside suburb of Wynnum. In the past it has suffered from a patchy reputation, but good public transport and convenient local amenities have prompted a change in perception.

Key features of the suburb include:

  • Large pool of renters, which make up 37% of total households
  • Relatively well off residents with a median weekly household income of $1,281
  • Most in-demand type of housing: multi-bedroom family homes on decent-sized blocks dominate
  • Wynnum benefits from its proximity to Wynnum Hospital, the Manly Marina and the Port of Brisbane. These features ensure there is a steady tenant pool for its rental market. The health of the market is unlikely to change in the foreseeable future


SCARBOROUGH, QLD

Market data

  • Median house value...............................................$435,000
  • Capital growth during past 12 months:................4.26%
  • Capital growth prediction over next 5 years (% pa).............................................. 7.96%
  • Current rental yield.......................................................4.88%
  • Rental yield increase over last year.........................0.06%
  • Vacancy rate.................................................................... 1.70%


At the tip of the Redcliffe Peninsula sits Scarborough, which is known for its stunning views of Moreton Bay and its beaches. Quiet, with a close-knit community, the suburb has its own shopping and dining strip.

Key features of the suburb include:

  • Healthy rental market with 35% of households renting
  • Relatively well off residents with a median weekly household income of $1,840
  • Most in-demand type of housing: beach-style family homes are eternally popular, but apartments are making inroads into this market
  • Just 30km from Brisbane, Scarborough is home to a thriving seafood industry, which ensures a steady tenant pool and a reliable rental market


NOOSAVILLE, QLD

Market data

  • Median house value.............................................. $696,500
  • Capital growth during past 12 months...............10.16%
  • Capital growth prediction over next 5 years (% pa)............................................11.20%
  • Current rental yield.......................................................4.37%
  • Rental yield increase over last year.........................0.04%
  • Vacancy rate....................................................................0.56%


Traditionally reliant on tourism, the times are a-changing for Noosaville. The suburb has been earmarked for economic development in coming years and this is starting to create activity and draw in workers.

Key features of the suburb include:

  • Large pool of renters with 34% of households currently renting
  • Growing population. Between 2006 and 2011 the population grew by 11%
  • Most in-demand type of housing: townhouses and apartments are growing in popularity
  • Ongoing work on the Sunshine Coast Public University Hospital, which is set to open in 2016, and the Stockland development are driving Noosaville’s rental market. Currently stable and healthy, it is likely to improve further in the future


SOUTH BUNBURY, WA

Market data

  • Median house value...............................................$412,000
  • Capital growth during past 12 months.................8.79%
  • Capital growth prediction over next 5 years (% pa)..............................................3.84%
  • Current rental yield....................................................... 4.81%
  • Rental yield increase over last year.........................0.05%
  • Vacancy rate.................................................................... 1.52%


Perched on a peninsula, the port city of Bunbury is a regional business hub and also has a thriving tourism industry. South Bunbury itself is a family-friendly suburb with easy access to the CBD and the beach.

Key features of the suburb include:

  • Large pool of renters, which account for 33% of households
  • Relatively well off residents with a median weekly household income of $1,205
  • Most in-demand type of housing: three- to four-bedroom houses with yards are sought after by buyers
  • Edith Cowan University’s Bunbury Campus and the South West Health  Campus both sit just outside South Bunbury. As a result, the rental market has a steady tenant pool and the market is tight, with healthy returns


OSBORNE PARK, WA

Market data

  • Median unit value ......... $364,500
  • Capital growth during past 12 months ..................... 7.37%
  • Capital growth prediction over next 5 years (% pa) ....2.86%
  • Current rental yield .............5.56%
  • Rental yield increase over last year .........................0.03%
  • Vacancy rate .......................... 1.52%


A mixed residential and industrial neighbourhood, Osborne Park is reasonably close to the CBD. The mixed nature of the suburb means it is affordable, yet also full of shopping and nightlife options.

Key features of the suburb include:

  • Large pool of renters, with 50% of all households renting
  • Relatively solid earning power, with the median weekly household income at $1,100
  • Strong population growth. Between 2006 and 2011 the population grew by a hefty 30%
  • Most in-demand type of housing: family homes on subdivisible blocks are still popular, but units rule the market
  • Osborne Park’s convenient proximity to all necessary amenities, combined with a lot of green space and easy access to the beach, is making it increasingly popular. This, along with the suburb’s already big rental market, means yields are set to stay high


SUBIACO, WA

Market data

  • Median unit value.......... $640,500
  • Capital growth over past 12 months......................5.82%
  • Capital growth prediction over next 5 years (% pa).....4.28%
  • Current rental yield..............4.93%
  • Rental yield increase over last year..........................0.02%
  • Vacancy rate...........................2.28%


Once a working class suburb, leafy Subiaco has been gentrified and is now considered one of Perth’s premier suburbs. Just 4km from the CBD, it boasts tree-lined streets, good amenities and a vibrant dining and entertainment scene.

Key features of the suburb include:

  • Large pool of renters, with 48% of households currently renting
  • Relatively affluent residents with a median weekly household income of $1,968
  • Most in-demand type of housing: older villa-style houses on decent blocks do well, but units are increasingly popular
  • Subiaco is home to three of Perth’s major hospitals. This means it has a reliable tenant pool with regular turnover, and decent rental returns are guaranteed


WHYALLA NORRIE, SA

Market data

  • Median house value......$179,000 Capital growth over
  • past 12 months......................1.69%
  • Capital growth prediction over next 5 years (% pa).....5.53%
  • Current rental yield..............6.72%
  • Rental yield increase over last year...........................0.14%
  • Vacancy rate...........................1.25%


Situated in the seaport city of Whyalla on SA’s Eyre Peninsula, Whyalla Norrie is a family-friendly suburb. Since 2004, the broader Whyalla area has experienced an economic upturn, thanks to mining ventures. This has benefited rental markets, including Whyalla Norrie’s.

Key features of the suburb include:

  • Strong rental market, with renters accounting for 40% of households
  • Most in-demand type of housing: multi-bedroom family homes are dominant in this market
  • The recent completion of a $72m expansion to the port, and the ongoing redevelopment of Whyalla Hospital, will attract workers to the area and tighten the rental market further. Whyalla Norrie’s affordability should ensure its rental yields retain their current attractiveness


PARALOWIE, SA

Market data

  • Median house value......$274,500
  • Capital growth over past 12 months......................... 0.1%
  • Capital growth prediction over next 5 years (% pa).....2.25%
  • Current rental yield..............6.02%
  • Rental yield increase over last year..........................0.09%
  • Vacancy rate........................... 1.07%


Originally a market garden area, Paralowie has long been poised to grow. These days the suburb is undergoing a transformation due to changes in housing requirements. Improved amenities and attractions are attracting new residents.

Key features of the suburb include:

  • Healthy balance between renters and owner-occupiers, with 22% of households renting
  • Favoured by families, which make up 63% of total households
  • Relatively well off residents with a median weekly household income of $1,133
  • Most in-demand type of housing: in this market 1970s-era family homes are the most sought after
  • Affordable and with easy access to the Adelaide CBD, Paralowie is particularly popular with young families. The ongoing development of the area will only enhance this and benefit the already healthy rental market


CHRISTIE DOWNS, SA

Market data
Median house value..... $250,500
Capital growth over past 12 months......................0.57%
Capital growth prediction over next 5 years (% pa)......3.18%
Current rental yield..............5.90%
Rental yield increase over last year..........................0.04%
Vacancy rate...........................0.62%

Tarnished by a less than shining reputation, Christie Downs sits right next to sought-after Christies Beach. Its supporters say it has most attributes of its neighbour, at far more affordable prices.

Key features of the suburb include:

  • Renters comprise 45% of households
  • Population grew 3% from 2006 to 2011
  • Most in-demand type of housing: three-bedroom, two-bathroom
  • properties with off-street parking
  • Close to the regional hub of Noarlunga, and with easy access to amenities and services, rental returns are solid


GLENORCHY, TAS

Market data - Houses

  • Median unit value..........$ 201,500
  • Capital growth over past 12 months......................4.14 %
  • Capital growth prediction over next 5 years (% pa).....3.79%
  • Current rental yield.............. 6.71%
  • Rental yield increase over last year..........................0.29%
  • Vacancy rate........................... 1.03%


Traditionally working class, Glenorchy is a mix of residential and commercial. It is the seat of the area’s local government, and has many facilities and amenities.

Key features of the suburb include:

  • Renters make up 38% of households
  • Population grew 1% from 2006 to 2011
  • Most in-demand type of housing: both units and houses have good yields, but units are preferred by renters
  • Close to the Hobart CBD, affordable and family friendly, Glenorchy is an area on the rise


NEWSTEAD, TAS

Market data

  • Median house value.....................................................$321,500
  • Capital growth over past 12 months............................1.91%
  • Capital growth prediction over next 5 years (% pa)....................................................4.40%
  • Current rental yield.............................................................5.46%
  • Rental yield increase over last year...............................0.13%
  • Vacancy rate...........................................................................2.36%


Close proximity to the Launceston CBD, along with abundant local amenities, means that Newstead has long been a sought-after suburb. Full of leafy streets and character homes, it is particularly appealing to families and young professionals.

Key features of the suburb include:

  • Good balance between renters and owner-occupiers
  • Between 2006 and 2011 the population grew by 5%
  • Most in-demand type of housing: heritage-style cottages and 1950s weatherboard homes are in demand in this suburb
  • Demand from those wanting to live in Newstead is not likely to die off anytime soon. The suburb’s rental market is a safe bet for decent rental returns


PARAP, NT

Market data

  • Median unit value.........................................................$394,500
  • Capital growth over past 12 months...........................0.20%
  • Capital growth prediction over next 5 years (% pa)....................................................3.05%
  • Current rental yield............................................................. 6.71%
  • Rental yield increase over last year..............................0.23%
  • Vacancy rate........................................................................... 1.95%


One of Darwin’s historic suburbs, Parap is known for its relaxed but vibrant environment. Situated just 3km from the CBD, it offers easy access to a wide range of amenities and services. These features combine to make it one of the city’s most popular suburbs.

Key features of the suburb include:

  • There is a particularly high number of renters. They make up 50% of households
  • Affluent residents with a median weekly household income of $2,082
  • Solid population growth: between 2006 and 2011 the population grew by 8%
  • Most in-demand type of housing: units are particularly popular in the Parap market
  • There is a limited amount of rental stock in the inner-city market. This, combined with Parap’s desirability, means yields in this suburb are likely to remain attractive for some time


FISHER, ACT

Market data

  • Median house value.....................................................$541,500
  • Capital growth over past 12 months........................... 2.91% 
  • Capital growth prediction over next 5 years (% pa).................................................... 3.51%
  • Current rental yield.............................................................5.05%
  • Rental yield increase over last year...............................0.14%
  • Vacancy rate...........................................................................1.83%


Sitting by the Canberra Nature Park, Fisher is 11km from the CBD. However, it is popular with young families because of an abundance of parkland. The Tuggeranong Parkway road runs alongside it, providing easy access to the inner city.

Key features of the suburb include:

  • Relatively tight rental market with just 21% of households occupied by renters
  • Affluent residents with a median weekly household income of $1,645
  • Most in-demand type of housing: three-bedroom houses are highly sought after by buyers and renters
  • Fisher’s rental market is tight. With relatively limited rental stock in the suburb, rental yields are rising strongly


CHISHOLM, ACT

Market data

  • Median house value....................................................$455,000
  • Capital growth over past 12 months...........................2.33%
  • Capital growth prediction over next 5 years (% pa)....................................................3.49%
  • Current rental yield.............................................................5.49%
  • Rental yield increase over last year...............................0.14%
  • Vacancy rate...........................................................................1.04%


One of Canberra’s outerlying suburbs, Chisholm is close to the Tuggeranong town centre and also has a shopping centre of its own. The family-friendly suburb is known for its parkland and nature walks.

Key features of the suburb include:

  • Tight rental market with only 20% of households renting. This means competition among renters is high
  • Desirable for families, which make up 59% of total households
  • High-income-earning residents with a median weekly household income of $1,958
  • Most in-demand type of housing: family homes on large blocks take precedence in this neighbourhood
  • Chisholm is one of Canberra’s more affordable suburbs. It is also well serviced by public transport. These factors, combined with relatively limited rental stock, should ensure it continues to record decent rental returns


AINSLIE, ACT

Market data

  • Median house value.....................................................$742,000
  • Capital growth over past 12 months............................3.11% 
  • Capital growth prediction over next 5 years (% pa)....................................................6.03%
  • Current rental yield..............................................................4.17%
  • Rental yield increase over last year..............................0.02%
  • Vacancy rate...........................................................................1.34%


Within walking distance of the CBD, Ainslie has many appealing features. Along with its inner-city proximity, this leafy suburb also has easy access to the bush trails of Mount Ainslie and the restaurants of Dickson.

Key features of the suburb include:

  • Large pool of renters making up 38% of households
  • High-income-earning residents with a median weekly household income of $1,877
  • Between 2006 and 2011 the population grew by 6%
  • Most in-demand type of housing: detached single-dwelling houses, although there is an increasing amount of medium-density housing
  • Ainslie’s range of attractions, along with its close-knit community atmosphere, should see decent rental returns continue to be generated by properties in this market


LYNEHAM, ACT

Market data

  • Median house value....................................................$638,500
  • Capital growth past 12 months.....................................2.55%
  • Capital growth prediction over next 5 years (% pa)....................................................5.33%
  • Current rental yield.............................................................4.47%
  • Rental yield increase over last year..............................0.02%
  • Vacancy rate...........................................................................1.49%


Marked out by its tree-lined streets and established gardens, Lyneham sits just 3km from the CBD. The heritage suburb also has its own range of amenities, plenty of parks and a number of prime sporting facilities.

The key drivers of rental demand are:

  • A big rental market with 49% of households renting
  • Relatively affluent residents with a median weekly household income of $1,643
  • Between 2006 and 2011 the population grew by 3%
  • Most in-demand type of housing: ex-government houses on 700sqm blocks are particularly popular
  • Lyneham’s relative proximity to both the University of Canberra and the Australian Catholic University makes it a magnet for students. This ensures there is a permanent tenant pool plus ongoing reliability of returns.



This article was published in the June 2014 edition of Your Investment Property magazine. You can subscribe to the magazine here


 

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