Queensland’s Bundaberg is shaping up to be a hotspot for property investors across Australia.
Data from InvestorKit showed strong market conditions for Bundaberg, with vacancy rate at a low of 0.5% and a 40% increase in rent over the past decade averaging to $400 a week.
Meanwhile, the median house price in Bundaberg is currently at $395,000, representing a 20% increase over the last 12 months.
InvestorKit founder and head of research Arjun Paliwal said lifestyle and affordability have been two big attractors for locals and incoming locals.
“As for investors, the tight rental market and yield are big standouts, in an environment where costs are rising for investors — the trifecta of growth, yield and rising rents is great,” he told Your Investment Property.
Mr Paliwal said the undersupply is apparent in Bundaberg, with houses for sale currently down 44% lower than the month prior to the market.
Even the extremely low vacancy rates signify the imbalance between supply and demand in the area.
“Levels of undersupply this deep, even amongst headwinds of interest rates, are still key drivers of growth for rent and price in Bundaberg, and we expect it to continue,” he said.
Over the past three months, InvestorKit provided assistance to more than 30 property transactions in Bundaberg.
Sydney-based IT professional Gokul, an InvestorKit client, purchased a four-bedroom home in Bundaberg for $535,000 in December 2021. He said that in just nine months, he was able to earn $165,000 in capital gains.
“After purchasing in December 2021, I had tenants move in straight away, and after their lease was up, they requested to sign another lease and even offered to pay a higher rent to match the latest rental appraisal and avoid losing the tenancy,” he said.
Mr Paliwal said Bundaberg is a great spot for investors who are seeking opportunities with high rental yields at a price point between $450,000 to $750,000.
“Although macro conditions from sentiment has slowed, and interest rates and costs are higher, as things do normalise over time when investors do return and if they do consider Bundaberg, they will be met with a low level of supply,” he said.
“Bundaberg will bring back capital growth at fast rates once again.”
—
Photo from Wikimedia Commons.
