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Looking For A Cash-Flow Positive Property Investment? Tasmania Tops The Rankings

Author: CoreLogic
Source: CoreLogic

The Tasmanian suburb of Chigwell has been ranked Australia’s top rental performer for the second quarter in a row in the latest Top Rental Performers Report from CoreLogic.

Houses in Chigwell are returning a rental yield of 7.9% and have a median value of $237,217 which also made it the most affordable suburb to invest in. 

Tasmanian suburbs took out the top three rankings in the report, with houses in Warrane and Glenorchy taking out positions two and three in the rankings. Units in the Queensland suburbs of Reedy Creek and Nambour held the fourth and fifth positions.

Suburb State Property Type Median Weekly Rent AVM Rental Yield
CHIGWELL Tas House $320 7.4%
WARRONE Tas House $320 6.6%
GLENORCHY Tas House $350 6.3%
REEDY CREEK Qld Unit $400 6.3%
NAMBOUR Qld Unit $310 6.3%
BRIGHTON Tas House $350 6.2%
PROSPECT VALE Tas Unit $250 6.2%
ELANORA Qld Unit $425 6.1%
TOORIMA NSW Unit $320 6.1%
MERRIMAC Qld Unit $450 6.1%

*The Top Rental Performers Report is based on settled property sales data to 31 October 2017 from the CoreLogic Market Trends dataset released December 15, 2017.

With investment purchases still making up a significant proportion of the housing market, the Top Rental Performers report reveals 76 suburbs where houses or units have an estimated gross rental yield of 5% or more per annum.

These areas have been identified as making the grade as ‘best rents’ because they demonstrated solid rental yields, consistent rental growth and vacancy rates of less than 3%. They have also performed consistently from a capital growth perspective.

With housing affordability a key issue in the Australian housing market, and strong market growth dominant across the eastern states, most of these suburbs are found in regional and coastal markets as well as satellite cities.

The December report features 32 suburbs where houses represent good rental opportunities and 43 suburbs where units offer the best rental value, while at the same time demonstrating capital growth.

Queensland dominates the list with 24 suburbs overall, followed by 19 NSW and Tasmania with 18. There were 11 suburbs in ACT and 3 in Victoria. No suburbs from Western Australia, South Australia or the NT met the Top Rental Performers criteria.

Median dwelling values in the report ranged from $237,217 to $736,990. The highest frequency value range in this report is between $300,000 and $400,000. There were 34 suburbs in this range.

This report gives investors a starting point when considering purchasing a rental property, and offers areas where finding a positively geared investment is more likely. 

But as with all investing, it is important you do your own research, including visiting the area, understanding local development and infrastructure plans, and assessing your own personal financial circumstances. Paying the right price for the right property will also play a very important part.