The Urban Developer
AdvertiseEventsWebinars
Urbanity
Awards
Sign In
Membership
Latest
Menu
Location
Sector
Category
Content
Type
Newsletters
Untitled design (8)
2 WEEKS UNTIL OUR UNMISSABLE FLAGSHIP CONFERENCE MORE THAN 550 ALREADY ATTENDING
2 WEEKS UNTIL OUR FLAGSHIP CONFERENCE 550+ ALREADY ATTENDING
REGISTER NOWDETAILS
TheUrbanDeveloper
Follow
About
About Us
Membership
Awards
Events
Webinars
Listings
Resources
Terms & Conditions
Commenting Policy
Privacy Policy
Republishing Guidelines
Editorial Charter
Complaints Handling Policy
Contact
General Enquiries
Advertise
Contribution Enquiry
Project Submission
Membership Enquiry
Newsletter
Stay up to date and with the latest news, projects, deals and features.
Subscribe
ADVERTISEMENT
SHARE
501
print
Print
OtherRenee McKeownThu 13 Feb 20

Five Cities Tipped for Property Investment Growth

a5c13956-fb1d-427a-9af9-17d1cd0ef541

Four capital cities and one major regional location are the best picks for investors in 2020 with major infrastructure projects and rental yield driving property investment growth.

Although first home buyer loans hit the highest rate since 2009, investor lending also increased 4.9 per cent reveals year-on-year data from the latest Australian Bureau of Statistics report.

Major infrastructure projects were also expected to fuel house prices and rent in most of the top cities.

The five top locations to invest in are Brisbane, Adelaide, Canberra, Perth and the Sunshine Coast according to analysis by InSynergy Property Wealth Advisory.

InSynergy chief property investment advisor Richard Sheppard said property prices in the strongest markets over a six to 10-year growth cycle could increase by 80 per cent to 120 per cent while also enjoying higher yields at the start of the cycle.

“However, the worst performing markets could see prices slide by up to 20 per cent over the same period, which means choosing the wrong location could cost you dearly,” he said.

Sheppard said recent price growth in Sydney and Melbourne could falsely entice investors back to overpriced markets.

“When I don’t believe the current supposed upswing will last long,” he said.

“The only exception would perhaps be units in Melbourne as they are so much more affordable than houses, as well as having one of the biggest price differences between houses and units we have ever seen in Australia.”


5. Sunshine Coast

▲ The new Sunshine Coast CBD in Maroochydore is expected to drive property prices up. Image: Scharp


Big projects in the area include Yaroomba Beach Village, Aura Caloundra South masterplan as well as the new Sunshine Coast CBD in Maroochydore.

There are also major rail and road projects including the Sunshine Coast Airport expansion project, $2 billion on Sunshine Coast Light Rail System, $880 million on the Bruce Highway Pine Rivers to Caloundra Road and the $195 million Beerburrum to Landsborough duplication.

“Noosa is probably the most well-known part of the Sunshine Coast, but its market has already enjoyed a number of years of price growth, so it is far too close to the end of its growth cycle.

“Also, geographically, it's a fair distance from the new town centre, so savvy investors have been cherry-picking more affordable houses and units closer to where the city’s future economic action will be.”

While coastal suburbs may have a few years of good times left, Sheppard said they were potentially halfway through their growth cycle.

The average price to buy a Sunshine Coast house is $617,525 and rent costs $500 a week according to regional Queensland data from Domain.

Houses⁠—Buderim, Peregian Springs and suburbs close to Maroochydore

Units⁠—Maroochydore, Mooloolaba and Coolum


4. Perth

▲ Perth has many major infrastructure projects and redevelopments in the pipeline.


Major projects for the area include Metronet, Perth City Link, Civic Heart apartment towers, Elizabeth Quay, Riverside, Optus Stadium and the new WA Museum.

“Recent data has shown Perth's median dwelling price finally starting to strengthen, plus the resources sector has also improved significantly as well,” Sheppard said.

“At the end of the day, Perth is one of our major capital cities and is home to nearly two million people, so its market was never going to stay in the doldrums forever, plus investing now, or by next year is better than investing anytime in the past 12- plus years.”

“In Sydney, gross rental yields for houses are just 2.7 per cent, but in Perth they are 4.2 per cent, so there is the opportunity there for future capital growth as well as current solid cash flow.”

The average price to buy a Perth house is $537,013 and average rent is $370 a week.

Units cost $342,708 on average to buy and $310 a week to rent, according to Domain.

Houses and Units⁠—areas closer to the city and coast


3. Canberra

▲ Canberra became one of the most expensive places to rent in 2019.


The average price to buy a Canberra house is $788,621 and rent $580 a week.

Units cost $455,537 on average to buy and $480 a week to rent according to Domain.

Due to its robust economy, job opportunities, and the highest median incomes anywhere in the country, Canberra continues to be one of the steadiest markets in the country.

“Investors can earn anywhere from five-to-seven per cent gross rental yields for apartments, coupled with vacancy rates currently sitting at just one per cent," Sheppard said.

“This also creates net rental returns about twice as high as houses, especially when you take land tax into account as there is no tax-free threshold in the ACT.

“When the price gap becomes so large, history shows us that unit demand increases and prices along with it, especially when rents are so much higher for units.

“For these reasons, we are only recommending investment units and townhouses in Canberra. Investors should consider areas like Turner, Braddon and Kingston.”

Units only⁠—Turner, Braddon, Kingston


2. Adelaide

▲ Large projects will drive employment and rent in Adelaide.


Major projects in the area include the Whyalla steel mill expansion, Olympic Dam and $80 billion Navy frigate and submarine projects.

“These are very large projects that will attract very strong employment, wages and population growth, so after a slow 10- years for Adelaide property, leaving it relatively very affordable, we should finally see a great run of growth for at least a decade,” Sheppard said.

BIS Oxford Economics has also forecast price growth of 11 per cent growth over the next three years for houses, which is second only to Brisbane for Australian capital cities.

The average price to buy an Adelaide house is $542,947, while rent is $390 a week.

Units cost $306,327 on average to buy and $315 a week to rent according to Domain.

Units and Townhouses - Bowden, Kent Town, areas close to Port Adelaide

Houses—Areas close to Port Adelaide


1. Brisbane

▲ Eagle Street Pier is another big project for Brisbane.


The average price to buy a Brisbane house is $577,664 and rent $410 a week.

Units cost $377,549 on average to buy and $385 a week to rent according to Domain.

Major projects for the area includes the Cross River Rail, Queen's Wharf, Roma Street Station and South Bank.

For Brisbane, affordability relative to incomes was its strongest market indicator with prices at 55 per cent of Sydney and incomes only 12 per cent lower.

“This is one of the reasons why about 1000 new residents are shifting to Queensland every week,” Sheppard said.

Houses⁠—Middle and outer rings of Brisbane including Wynnum, Manly and Lota.

ResidentialAustraliaBrisbaneMelbournePerthAdelaideCanberraSector
AUTHOR
Renee McKeown
More articles by this author
ADVERTISEMENT
TOP STORIES
The Port of Brisbane has released its Vision 2060 which details the need for inland rail connectivity
Infrastructure

Brisbane Port’s $15bn Future Faces One Big Obstacle

Renee McKeown
5 Min
Freecity Rouse Hill triple towers 2 Tempus Street
Exclusive

Freecity Takes Covers Off $330m Triple Towers in Sydney’s North-West

Leon Della Bosca
5 Min
Parallel Workshops Stockdale Housing PBSA project
Exclusive

Suburban Success Story Turns PBSA Thinking on its Head

Leon Della Bosca
7 Min
Exclusive

Interstate Developers Find Lots to Love in ‘Progressive, Affordable’ SA

Taryn Paris
5 Min
Bates Smart Richmond Sportslink HERO
Exclusive

BtR Focus Drives Bates Smart’s Richmond Sportslink Concept

Leon Della Bosca
6 Min
View All >
Logan Wastewater Funding hero
Infrastructure

Flush of Funding to Deliver 20,000 New SEQ Homes

Phil Bartsch
Residential

Home Affordability Gap Widens Across Asia-Pacific

Lindsay Saunders
Industrial

Inland Rail: Site at Rural Hub Comes to Market in Victoria

Lindsay Saunders
The 196ha site at a regional centre slated as a stop on the $31-billion rail megaproject comprises two industrial-zoned …
LATEST
Logan Wastewater Funding hero
Infrastructure

Flush of Funding to Deliver 20,000 New SEQ Homes

Phil Bartsch
3 Min
Residential

Home Affordability Gap Widens Across Asia-Pacific

Lindsay Saunders
3 Min
Industrial

Inland Rail: Site at Rural Hub Comes to Market in Victoria

Lindsay Saunders
2 Min
Stockland's Triniti HERO
Build-to-Rent

Stockland $400m North Ryde BtR Approved on Appeal

Leon Della Bosca
3 Min
View All >
ADVERTISEMENT
Article originally posted at: https://theurbandeveloper.com/articles/five-cities-tipped-for-investment-growth