Western Australia and Queensland have a number of locations where investors can potentially see both capital growth and high yields, according to new report.
The Pulse report, by Hotspotting and Washington Brown, found that locations including Dalby, Bowen Hills, Yorkeys Knob, Woodridge and Bundaberg South are set to be standout performers across Queensland.
While in Western Australia, Armadale, Balga, Carey Park and Geraldton are also highly rated.
Washington Brown Director, Tyron Hyde, said the research demonstrated that it was possible to achieve an investment property that ticked every box – high capital growth and above-average rental yields in affordable locations with ultra-low vacancies and rising rents.
“Among the most outstanding performers identified by this report are locations where property values have risen notably, but rental yields have increased because there has been an exceptional increase in rents,” Mr Hyde said.
“One of the stand-out markets highlighted by this report is the Queensland town of Dalby, the key regional centre for the Western Downs region, west of Brisbane.”
Property values have soared in Dalby, up 15 per cent in the past year, while yields have increased to 7.2 per cent.
Mr Hyde said there was also growing demand for properties, especially apartments, in Bowen Hills and surrounds due to its close proximity to infrastructure projects and its position in one of the top 30 most liveable cities in the world.
“With its population expected to continue growing, the unit market is expanding to accommodate its new residents,” he said.
Mr Hyde said the vacancy rate for Bowen Hills was 1.2 per cent and the median unit rent had risen 15 per cent in the past 12 months, with the median rental yield increasing from 6.2 per cent to 6.6 per cent in the past three months, with median unit prices up 7.1 per cent.
Hotspotting Director, Terry Ryder, said Yorkeys Knob in Cairns had also proved popular.
“The median yield has lifted from 6.4 per cent to 6.5 per cent in the past three months and its median unit price has recorded an annual rise of 15 per cent to $340,000,” Mr Ryder said.
“Yorkeys Knob has long been a popular suburb for tenants with some 50 per cent of its residents being renters.
“There are also more units and townhouses than houses in the suburb, which ensures that investors are purchasing dwellings that are the most in demand by the people who want to live there.”
Mr Ryder said unit rents in Woodridge grew 15 per cent in the past year, on the back of a 0.6 per cent vacancy rate, while the median rental yield remained high at 7.1 per cent.
“This high rental yield was achieved despite a 24 per cent annual increase in the median unit price to $298,000,” he said.
“Woodridge in the Logan council area of Greater Brisbane is well-located and well-connected and is benefiting from its affordable price points for homebuyers and investors.”
Mr Ryder said Armadale was WA’s best performer.
“The Armadale property market has gone from strength to strength over the past year, partly due to strong investor demand as well as affordable buy-in prices,” he said.
“The City of Armadale is also the fourth fastest-growing local government area in WA and the 15th in Australia.
“The population is approximately 91,000 and is expected to grow to 141,000 by 2036.”
Mr Hyde said Balga, north of Perth, had the lowest possible vacancy rate at just 0.1 per cent, prompting the median house rent to rise 22 per cent in the past year.
“The median house price has lifted 22 per cent in 12 months to $465,000, but the median rental yield also remains high at 6.4 per cent,” he said.
“One of the major infrastructure projects in Balga is the $47.9 million upgrade of Balga TAFE, which is due for completion at the end of this year.”
Mr Hyde said Carey Park in Bunbury recorded a 23 per cent annual rise in its median house price to $370,000.
“However, the median rental yield remained high at 7.0 per cent, thanks to a 15 per cent annual increase in the median house rent, on the back of a 0.6 per cent vacancy rate,” he said.
“As well as having a diverse economy, Bunbury benefits from its strategic location as a key transport hub and gateway to the southwest region of Western Australia.
“Being two hours’ south of Perth, Bunbury also benefits from the economic influence of the larger metropolitan area.”
