Suburbs with great rental returns

By Ericka Pingol | 07 Apr 2020

For most investors, rental return is one of the many factors that affect where and how much they may invest for a property. Also know as rental yield, it is a measure of how much cash an income-generating property makes over the course of a year.

Finding the best area with a great rental return can be daunting as the country is comprised of hundreds and hundreds of suburbs. To help you get an idea what kind of rental return you may be able to get across Australia, we round out some suburbs with enticing rental yields for houses and units, based on CoreLogic’s March 2020 data.

Gungahlin, Australian Capital Territory

Gross rental yield: 4.31% (houses), 6.37% (units)

Gungahlin is located about 30 minutes away from Canberra’s centre. The vacancy rate in this suburb fell from almost 3% to just 2% over a 12-month period. The town has various medical centres and a shopping district. Restaurants and cafes are also found in Gungahlin.

With a gross rental yield of 4.31% for houses, larger two-bedroom houses are in demand. Studio and one-bedroom rentals are also becoming popular, as rents jumped by 3%, which resulting in rental yields for apartment averaging 6.37%. The weekly advertised rent in Gunghalin is $618 for houses and $450 for units.

Broken Hill, New South Wales

Gross rental yield: 10.58% (houses)

Broken Hill is an inland mining city in NSW. Referred to as the “Silver City”, Broken Hill is a prominent mining tow. While it is over 900km from Sydney, the city offers various attraction such as the Living Desert Sculpture.

The suburb gave investors a 19.39% potential capital gain during a five-year average increase in median property prices. Weekly advertised rent for houses is about $360, giving a yield of 10.58% based on the median value of the suburb.

Parap, Northern Territory

Gross rental yield: 4.43% (houses), 8.80% (units)

Parap is an inner suburb of Darwin and is just about 3km north of the CBD. It is also conveniently located south-west of the airport and near the beach. Residents in this suburb are usually affluent, with an estimated weekly income of about $2,000.

Houses in Parap are a touch more expensive compared to nearby suburbs, with advertised weekly rent of $630. The rental yield for houses stands at 4.43%. Meanwhile, units have a rental return of 8.80%, with an advertised weekly rent of $440.

Blackwater, Queensland

Gross rental yield: 10.24% (houses)

Blackwater is a small town in Central Queensland, a nine-hour drive away from Brisbane. The town is known as the “Coal Capital of Queensland” and plays a major role in the region’s mining industry, having six open cut coal mines.

The town’s property market has been booming, with recent numbers outperforming the ten-year average annual rate. Median house values in Blackwater remain relatively affordable, standing less than $400,000, with average gross rental yield at 10.24%.

Port Augusta, South Australia

Gross rental yield: 8.61% (houses)

Port Augusta is located near one of SA’s major crossroads. It’s ideal location allows residents to take any direction to go to their places of employment. The city is the nearest major town to Olympic Dam, which is a major employer for Port Augusta’s population, according to Mick Gilbert, director of First National Real Estate Port Augusta.

Olympic Dam’s expansion is set to be finalised this year, which fuels confidence among the city’s real estate insiders. They belief now is the right time to invest in this South Australian powerhouse.

“If you look at the outlook for Port Augusta over the next five years, it is extremely exciting, particularly as Roxby Downs will potentially become the biggest mine in the world,” says Century 21 Port Augusta manager John Rejack.

The city has a gross rental yield of 8.61%. Three-bedroom houses being the most in demand, according to Rejack.

New Norfolk, Tasmania

Gross rental yield: 6.56% (houses), 6.60% (units)

New Norfolk is situated south-east of Tasmania on the Derwent River. It is 32km from Hobart on the Lyell Highway. The state’s oldest Anglican church, St. Matthews which was built in 1823, and one of the oldest pubs in the country are in New Norfolk.

Investors had a capital gain of 11% for property investments in the suburb over the last year, which compared favourably with 7.07% for the entire Tasmania. Houses in this suburb is relatively affordable, recording a $219,000 median value. Meanwhile, advertised weekly rent for houses is $350, resulting in a 6.56% rental yield.

New Norfolk has a 6.60% rental yield for units—the second best in the state, with advertised weekly rent at $330.

Morwell, Victoria

Gross rental yield: 7.02% (houses), 5.88% (units)

Located in South-Eastern Victoria, Morwell is about 143km from Melbourne. It is the administrative centre of the City of Latrobe and is popular for being a major energy production centre in Victoria.

Looking at the suburb’s median property appreciation for the last three months, Morwell has given property investors a paper return of 0.99%, becoming one of the fastest appreciating suburbs in Victoria.

Median house prices in Morwell stands at $177,750, with an advertised weekly rent of $240. This results in a 7.02% rental yield. Meanwhile, median unit value is 163,500 and advertised weekly rent for apartments is $185, with a 5.88% yield.

Coolgardie, Western Australia

Gross rental yield: 15.79% (houses)

Coolgardie is located 558km east of Perth. It was once the third largest town in WA, but in recent times, the suburb is known as a tourism and mining area.

Capital gain for investors in this Western Australian suburb over the last year stood at 1.82%. Looking at Coolgardie’s median property appreciation for the last three months, the suburb gave investors a property return of 6.33%. Advertised median weekly rent in town for houses is $255, with a whopping 15.79% rental return.

 

Want to know more about different suburbs and their property market? Visit out Top Suburb page.

Top Suburbs : south brisbane , springwood , melton , revesby hts , the basin

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