RP Data’s revelation that it is possible to get 16% rental yields in one of Australia’s emerging housing markets has some commentators urging investors to get active, while others are not so sure
For years, property investing has been the enclave of those with plenty of cash to spare, but some observers believe this is starting to change.
After reviewing suburb statistics commissioned from RP Data, Aussie Home Loans executive chairman John Symond said there are at least half a dozen suburbs in each capital city where rental yields are greater than the cost to repay the mortgage.
“It’s the perfect time for the average Australian to consider a move into property investment if they have some money saved. Both fixed rates and variable rates are the lowest they have been in years, with interest rates below 5%.”
Housing prices in some areas are historically low, according to the research, but are starting to move back up and Symond claims investors can earn rental yields of between 5% and 10% in some areas and as high as a 16% in Bellamack, Darwin.
However, Northern Territories broker franchise principle, Tony Schelling, said he is concerned the data may be slightly skewed.
"Bellamack has had some pretty new homes, so 16.9% -you’d have to have very, very low cost housing. The average house in the area is probably $600,000 and they’re getting about $1,000 per week for rent. I think the figure does seem a little high.”
Schelling said he didn’t want to question RP Data, but said it’s possible for figures to occasionally become ‘adjusted’ by limited sales.
Otherwise, he largely agreed with Symond, adding that local rental yields are high, especially for units.
“Darwin in particular has opportunities for those who have a focus on investment and unlike towns like Gladstone in Queensland, which also have high rental yields... Darwin has a multi-stream economy.”
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