These hotspots offer the combined advantages of strong rental yields, excellent capital growth potential, and attractive depreciation benefits for investors.
Washington Brown Director Tyron Hyde explained that the top-performing locations are spread across Queensland, Western Australia, and New South Wales, with each boasting yields above 6% and promising growth potential.
“Our nation offers so many promising areas that investors should consider for their first, or their next, investment property,” Mr Hyde said.
“Research like this shows current and prospective investors that there are a variety of affordable investment locations with excellent cash flow and capital growth still available to purchase.”
Houses delivering high returns
Leading the pack is Blacks Beach, QLD, located in Mackay. The suburb offers entry-level prices in the $300,000s for units and $400,000s for houses, coupled with ultra-low vacancy rates of just 0.3%.
“Blacks Beach in Mackay continues to offer buy-in prices in the $300,000s for units and the $400,000s for houses,” said Mr Hyde.
“Its ultra-low vacancy rate of just 0.3% is also pushing rents and cash flow higher, with yields of six to seven per cent common.” Annual tax depreciation benefits here could reach $5,510.
In Calliope, QLD, a suburb in the Gladstone region, houses have a median price of $425,000, with an average annual growth rate of 11% over the past five years.
Rental demand is strong, with rents up 18% and properties selling in under three weeks. Annual depreciation benefits are estimated at $4,180.
Western Australia’s Carey Park, in Bunbury, continues to deliver on all metrics, with a median house price in the low $400,000s and price growth of 29% over the past year.
Rental yields exceed 6%, and rents are up 23%. Depreciation benefits here could amount to $3,725 annually.
Other standout suburbs include Koongal, QLD, with a median house price below $400,000 despite strong growth of 21% in the past year, and Wonthella, WA, where house prices are under $400,000 but have increased 26% annually.
Both suburbs offer yields around 7%, and depreciation benefits of $4,481 and $5,545, respectively.
Affordable units
For unit investors, Bowen Hills, QLD, stands out, offering proximity to Brisbane’s CBD and major hospitals, with median prices just above $500,000 and yields above 6%.
Mr Hyde noted: “Bowen Hills offers proximity also to Brisbane’s largest hospitals complex, but with affordable units.” Depreciation benefits could reach $5,341.
In Perth’s Glendalough, units are priced at a median of $355,000, with rental yields close to 7%. Properties sell quickly, within two weeks, and annual depreciation benefits could be as high as $6,027.
Sydney’s Harris Park and Lakemba also made the list. In Harris Park, units priced at $485,000 have seen 13% price growth, while Lakemba’s affordability at $440,000 and 24% rental growth make it attractive. Depreciation benefits for these suburbs are $5,302 and $3,750, respectively.
Rivervale, WA, rounds out the top unit locations, with units priced well under $500,000 and strong yields of 7%. Depreciation benefits here could reach $6,456.
Added value through depreciation
Mr Hyde emphasised the value of depreciation benefits across the top locations.
“Across the top 10 locations, annual taxation benefits potentially range anywhere from $3,500 to nearly $7,000, depending on the type of property and the location,” he said.
He pointed to Blacks Beach as an example, where investors could gain approximately $6,900 in annual depreciation, leading to a net benefit of $2,500 to $3,100 depending on their tax bracket.
Here are the top 10 investment locations under $500,000, as identified in the report:
Houses
Blacks Beach, QLD
Median Price: $400,000+
Yield: 6-7%
Annual Depreciation Benefit: $5,510
Calliope, QLD
Median Price: $425,000
Yield: Above 6%
Annual Depreciation Benefit: $4,180
Carey Park, WA
Median Price: Low $400,000s
Yield: Over 6%
Annual Depreciation Benefit: $3,725
Koongal, QLD
Median Price: Below $400,000
Yield: 6.5%
Annual Depreciation Benefit: $4,481
Wonthella, WA
Median Price: Below $400,000
Yield: Close to 7%
Annual Depreciation Benefit: $5,545
Units
Bowen Hills, QLD
Median Price: $500,000+
Yield: Over 6%
Annual Depreciation Benefit: $5,341
Glendalough, WA
Median Price: $355,000
Yield: Close to 7%
Annual Depreciation Benefit: $6,027
Harris Park, NSW
Median Price: $485,000
Yield: Above 6%
Annual Depreciation Benefit: $5,302
Lakemba, NSW
Median Price: $440,000
Yield: Around 6%
Annual Depreciation Benefit: $3,750
Rivervale, WA
Median Price: Below $500,000
Yield: Around 7%
Annual Depreciation Benefit: $6,456
