Top investment trends of 2022

By Harrison Astbury | 05 Apr 2022

The COVID-19 pandemic has changed people’s priorities in many ways, particularly when it comes to where they want to live. Harrison Astbury explores how renters' priorities have shifted in the wake of the pandemic and what investors should consider.

The pandemic caused a seismic shift in what Aussies look for when it comes to housing, and specifically where to invest in property.

Even though the pandemic is becoming endemic, many are still turned off by small, inner-city apartments, and despite borders being open-ish, there appears to be only a slow trickle of international students coming back.

To put it succinctly, renters are generally looking for more space, and consequently, that affects investors' purchasing decisions.

The great sea or tree change

Moving regional is still all the rage, with many renters and homeowners looking to get out of the capital cities as working from home becomes the norm.

Propertyology head of research Simon Pressley identified 59 locations where annual rents could increase by $5,000 or more.

"During the first 12-months of COVID-19, the population of regional Australia increased by 51,000, whereas the eight capital cities produced a combined 17,000 decline," Mr Pressley said.

"Over two years, some of the biggest rental increases that have already occurred were in, but not limited to, Ballina, Orange and Port Macquarie in NSW, Wangaratta in Victoria and Launceston in Tasmania.

"In Queensland, rents have already been significantly squeezed in popular cities like Cairns, Hervey Bay, Gold Coast and Sunshine Coast. And in Western Australia, it is locations like Busselton and Mandurah."

This is backed by REA data which shows the combined regions recorded 30% price growth in the past year, as opposed to capital city markets' performance of 21.7%.

Propertyology also analysed 550 individual Australian property markets and found that Orange NSW was the city that most punched above its weight in terms of house price performance.

In the five years to May 2021, the median property price increased by 78%, while ranking only 56th in terms of population. The top ten list included:

  1. Byron, NSW - 105%
  2. Kingscliff, NSW - 103%
  3. Wonthaggi, VIC - 95%
  4. Yamba, NSW - 86%
  5. Noosa, QLD - 84%
  6. Cooma, NSW - 78%
  7. Leongatha, VIC - 80%
  8. Orange, NSW - 78%
  9. Ballina, NSW - 73%
  10. Kiama, NSW - 70%

The chase for ‘uncut gems’

Well Home Loans' latest quarterly ‘Green Shoots’ report identified the top 20 suburbs or towns for future growth.

Looking at the three months to January 2022, its selections featured a mix of falling inventory levels, sliding days on market and rising asking prices.

"When you analyse leading indicators like inventory levels and days on market, you get a sense for whether market conditions are tilting towards sellers or buyers, and therefore whether prices are likely to rise or fall in the year ahead,” Well Home Loans' CEO Scott Spencer said.

The top 20 suburbs in order were:

Suburb

Property Type

Median Price

Hallam, VIC

Unit

$505,000

Broome, WA

House

$589,000

West Lakes, SA

Unit

$529,000

Mango Hill, QLD

Unit

$359,000

Newtown, QLD

Unit

$270,000

Whyalla Norrie, SA

House

$165,075

Wyndham Vale, VIC

House

$513,000

Evanston Gardens, SA

House

$346,900

Bohle Plains, QLD

House

$440,000

Collingwood Park, QLD

House

$435,319

Mount Barker, SA

House

$439,900

Burwood, VIC

Unit

$820,000

Eynesbury, VIC

House

$606,400

Gungahlin, ACT

Unit

$469,000

Leda, WA

House

$325,500

Kirrawee, NSW

Unit

$760,000

Djugun, WA

House

$625,000

Belconnen, ACT

Unit

$450,000

Devonport, TAS

Unit

$319,000

Jurien Bay, WA

House

$450,000

Look afar for good rental yields

If you’re looking for a relatively low entry price in an area that still has good rental price performance, CoreLogic identified in excess of 100 suburbs or towns' rental yields, with the top 10 being:

  1. South Hedland, WA - 14.6% 
  2. Tom Price, WA - 14.1%
  3. Newman, WA - 13.4%
  4. Pioneer, QLD - 12.8%
  5. Kambalda East, WA - 11.6%
  6. Menzies, QLD - 11.4%
  7. Bucasia, QLD - 11.1%
  8. Blackwater, QLD - 10.4%
  9. Dysart, QLD - 10.4%
  10. Mount Morgan, QLD - 10.1%

It’s evident that you might have to venture pretty far to chase rental yields or an uncovered gem, which gives rise to the ‘rentvesting’ phenomenon.

2022 - the year of rentvesting?

Put simply, rentvesting is buying an affordable investment property while renting in a place you actually want to live. The main attraction for this is that it gives first home buyers a leg up on the property ladder while not sacrificing their lifestyle.

And you don’t necessarily need to invest out in the boonies, either.

New analysis from Nicola McDougall, board member of the Property Investment Professionals of Australia (PIPA), and Kate Hill, a buyers agent at Adviseable, identified the top five areas or local government areas to ‘rentvest’ in 2022.

  1. Casey City Council (Melbourne)
  2. Moreton Bay Regional Council (Brisbane)
  3. City of Onkaparinga (Adelaide)
  4. City of Sterling (Perth)
  5. Penrith City Council (Sydney)

"Rentvesting has become a popular strategy for those who want to buy property but still [live] in an expensive real estate city such as Sydney or Melbourne," Ms McDougall said.

“Being a long-term renter without putting your money to work somehow has significant ramifications on your financial future as well as potentially causing hardship in retirement," Ms Hill said.

Let’s not totally neglect cities

There’s definitely a sustained regional property push, which is likely to continue in 2022. However, there is still utility in looking at some of the big cities.

RentRabbit looked at some of the best ‘tenant friendly’ suburbs within cooee of a capital city. It may be a case of a ‘build it and they will come’ mentality for investors.

With Melbourne/Victoria absolutely dominating, the top 10 in order were:

Suburb

Distance to Capital City*

Median Weekly Rent

Hoppers Crossing, Vic 3029

37km

$350

Wyndham Vale, Vic 3024

37km

$355

Derrimut, Vic 3030

18km

$380

Pakenham, Vic 3810

74km

$380

Bellbird Park, Qld 4300

23km

$380

Tarneit, Vic 3029

37km

$390

Epping, Vic 3076

34km

$390

Mill Park, Vic 3082

34km

$390

Logan Reserve, Qld 4133

27km

$390

Sunbury, Vic 3429

33km

$395

* ‘Distance to Capital City’ is not the average distance of the suburb to these capital cities but the average distance of the suburb’s ‘SA3’ (a technical term the Australian Bureau of Statistics uses to define a cluster of suburbs) to the capital city.

59 Top Rental Locations 2022

Mr Pressley identified these locations where annual rents could increase by $5,000 or more in a year.

Suburb/City

State

Property Type

Median Price

12-Month Growth

Average Annual Growth

3-Year Growth

5-Year Growth

Weekly Median Advertised Rent

Gross Rental Yield

Adelaide

SA

House

$743,250

10%

4.2%

24%

27%

$480

3.4%

Airlie Beach

QLD

House

$881,250

24%

13.8%

120%

NA

$655

3.9%

Albany

WA

House

$580,000

12%

1.5%

9%

15%

$355

3.2%

Albury

NSW

House

$785,000

31%

8.0%

52%

67%

$420

2.8%

Ballina

NSW

House

$860,000

37%

8.6%

56%

91%

$600

3.6%

Batemans Bay

NSW

House

$600,000

21%

7.1%

50%

69%

$405

3.5%

Bathurst

NSW

House

$559,000

32%

7.5%

37%

57%

$380

3.5%

Bendigo

VIC

House

$605,000

26%

8.3%

56%

41%

$393

3.4%

Bowral

NSW

House

$1,395,000

21%

10.1%

38%

60%

$708

2.6%

Brisbane

QLD

Units

$507,000

7%

1.1%

3%

3%

$490

5.0%

Bundaberg

QLD

House

$315,000

20%

1.7%

24%

5%

$330

5.4%

Burnie

TAS

House

$398,379

19%

8.9%

26%

49%

$330

4.3%

Busselton

WA

House

$482,500

4%

3.5%

4%

-11%

$420

4.5%

Cairns

QLD

House

$530,000

42%

4.8%

20%

9%

$485

4.8%

Canberra

ACT

House

$577,000

NA

NA

NA

NA

$580

5.2%

Coffs Harbour

NSW

House

$720,000

30%

7.6%

45%

64%

$550

4.0%

Dubbo

NSW

House

$455,444

18%

5.9%

23%

28%

$395

4.5%

Esperance

WA

House

$360,000

19%

0.7%

21%

8%

$350

5.1%

Geelong

VIC

House

$952,500

6%

7.2%

32%

66%

$450

2.5%

Geraldton

WA

House

$285,000

10%

-1.3%

24%

-5%

$335

6.1%

Gladstone

QLD

House

$285,000

16%

-1.1%

NA

-10%

$310

5.7%

Gold Coast (Surfers Paradise)

QLD

House

$1,750,000

19%

3.6%

42%

21%

$820

2.4%

Gosford

NSW

House

$937,500

NA

14.1%

NA

NA

$420

2.3%

Goulburn

NSW

House

$520,000

21%

6.9%

24%

41%

$390

3.9%

Gympie

QLD

House

$400,000

33%

5.7%

53%

63%

$375

4.9%

Hervey Bay

QLD

House

NA

NA

NA

NA

NA

NA

NA

Kiama

NSW

House

$1,450,000

41%

10.7%

57%

70%

$600

2.2%

Kempsey

NSW

House

$347,000

29%

9.0%

49%

114%

$330

4.9%

Kingscliff

NSW

House

$1,800,000

45%

11.6%

93%

110%

$800

2.3%

Launceston

TAS

House

$677,250

17%

7.8%

21%

76%

$450

3.5%

Lismore

NSW

House

$490,000

32%

6.1%

42%

63%

$430

4.6%

Lorne

VIC

House

$2,010,000

33%

10.4%

75%

161%

$890

2.3%

Mackay

QLD

House

$335,000

18%

-0.4%

18%

34%

$380

5.9%

Maitland

NSW

House

$564,000

31%

8.0%

47%

80%

$430

4.0%

Maryborough

QLD

House

$287,000

31%

2.9%

44%

44%

$330

6.0%

Mount Barker

SA

House

$470,000

11%

2.5%

15%

11%

$420

4.6%

Mount Gambier

SA

House

$295,000

13%

2.6%

16%

20%

$320

5.6%

Mornington Peninsula

VIC

House

$1,087,000

24%

8.1%

35%

48%

$575

2.7%

Mudgee

NSW

House

$600,000

28%

6.9%

52%

59%

$475

4.1%

Newcastle

NSW

House

$1,355,000

NA

11.1%

-24%

NA

NA

NA

Noosa

QLD

House

$1,800,000

29%

11.8%

57%

114%

$890

2.6%

Orange

NSW

House

$605,000

27%

7.0%

49%

73%

$460

4.0%

Perth

WA

House

$856,000

8%

2.5%

17%

4%

$550

3.3%

Port Macquarie

NSW

House

$775,000

29%

7.4%

35%

49%

$550

3.7%

Rockhampton

QLD

House

$210,000

35%

1.0%

33%

32%

$300

7.4%

Sunshine Coast (Caloundra)

QLD

House

$810,000

43%

8.0%

53%

49%

$495

3.2%

Toowoomba City

QLD

House

$441,250

32%

5.4%

19%

22%

$380

4.5%

Torquay

VIC

House

$470,000

31%

5.0%

42%

45%

$398

4.4%

Townsville City

QLD

House

$595,000

NA

-25.4%

NA

NA

$400

3.5%

Traralgon

VIC

House

$405,000

19%

4.3%

36%

50%

$389

5.0%

Wagga

NSW

House

$515,000

14%

4.6%

29%

36%

$410

4.1%

Wangaratta

VIC

House

$430,000

21%

6.0%

35%

58%

$393

4.7%

Warrnambool

VIC

House

$517,250

26%

5.2%

48%

62%

$420

4.2%

Warragul

VIC

House

$582,000

18%

7.1%

35%

71%

$415

3.7%

Warwick

QLD

House

$290,000

15%

1.5%

5%

16%

$293

5.2%

Wodonga

VIC

House

$440,000

26%

4.9%

26%

40%

$400

4.7%

Wollongong

NSW

House

$1,230,000

42%

11.0%

43%

57%

$580

2.5%

Yamba

NSW

House

$812,500

27%

10.1%

52%

58%

$560

3.6%

Yeppoon

QLD

House

$445,000

14%

1.1%

33%

24%

$480

5.6%

 

Top Suburbs : melton , darlington , flemington , north epping , nundah

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