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Emily Hutchinson 21 Mar 2022

New data from realestate.com.au has revealed where investors are focusing their searches for property right now.

And Queensland has dominated the results, with six rankings in the top 10 list for February 2022.

“Queensland, and particularly southeast Queensland, has always been a popular location for investors, but I think COVID-19 has exacerbated things somewhat,” said Cameron Kusher, director of economic research at PropTrack.

“Even if people can’t make the permanent move to lifestyle markets, buying a holiday property in one has become a more attractive option.

“Queensland also tends to have much cheaper property prices than Sydney and Melbourne and much higher rental returns so it seems to tick the boxes for investment much more easily.”

Ranking Suburb Property type Median price Rental yield
1 Surfers Paradise, QLD Unit $480,000 6.17%
2 Melbourne, VIC Unit $490,000 4.37%
3 Redbank Plains, QLD House $400,000 5.31%
4 Southport, QLD Unit $442,600 6.17%
5 Brisbane CBD, QLD Unit $519,000 5.27%
6 Adelaide, SA Unit $435,000 5.59%
7 Broadbeach, QLD Unit $670,000 4.96%
8 Maroochydore, QLD Unit $590,000 5.00%
9 Wollongong, NSW Unit $650,250 3.94%
10 Port Macquarie, NSW Unit $535,000 4.73%

The most enquired about suburb and property type for investors during the month was Surfers Paradise for apartments, where the median unit price is $480,000 and the rental yield is 6.17%. Houses in Redbank Plains came in third, where the median price is $400,000 and the yield is 5.31%, units in Southport came in fourth where the median is $442,600 and the yield is 6.17%, and units in Brisbane CBD at fifth where the median is $519,000 and the yield is 5.27%.

Cities still sparking investor interest

Despite suffering high vacancy rates throughout lockdowns, reaching a peak of 10.8% in December 2020, Melbourne CBD continues to spark investor interest with units ranking as the second most enquired about suburb nationally in February 2022.

The median price for a unit in Melbourne CBD is $490,00 and the rental yield is 4.37%.

Michael Pastrikos, who is a sales manager at Ray White Southbank and Port Philip, said he noticed the return of investors from January.

“Our vacancy rates [agency specific] have gone back to pre-COVID rates, places are leasing out in about two weeks after being put on market, and there’s high demand. We’ve started to see a shift on rental return as well with prices creeping back up to what they were pre-COVID.

“I think with the state of the world at the moment, [investors] are looking at where to park their money, where is a good investment. And they’re starting to notice the resurgence of the rental market in Melbourne.

“It’s still a relatively affordable market. When you talk about investment, not everyone has huge amounts of capital to put into property… so it’s a good entry point for a lot of investors.”

Mr Pastrikos also said he had recently seen a lot more parents buying units in the CBD for their children to live in, particularly as universities return to on-campus learning.

Investors were also eyeing off units in Adelaide, which came in as the sixth most enquired about investor suburb. The median price there is $435,000 and the rental yield is 5.59%.

In New South Wales investors looked away from inner-Sydney as prices soared and instead looked at units in Wollongong, which was the ninth most enquired after suburb in Australia. Units in Port Macquarie were the tenth most enquired after.

What investors need to consider

According to Mr Kusher, market conditions for investors are still favourable, with borrowing costs low and rental demand strong across the country.

“Although rental yields have fallen, with very low interest rates and prices rising, the housing market is currently an attractive investment option,” said Mr Kusher.

COVID saw many investors sell, which decreased rental supply and pushed prices higher, however Mr Kusher said purchasing is increasing as confidence in the market is renewed.

He added that location and tenant demand are the two most important considerations for investors.

“If purchasing outside of a capital city investors should also consider the long-term drivers and sustainability of rental demand. It’s also important to consider what the future supply of housing in the market looks like,” he said.

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