- Distance from Perth CBD: 14km
- Population: 7,458
- Median Price: $380,000
- 12-month growth: -14%
- Rental yield: 5.37%
- Market type: Units
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Carving out the bottom spot in the top 10 of our rankings is Fremantle. With a local government area populated by close to 30,000 people, the suburb is an important port area of Greater Perth, used for large exports of commodities to overseas buyers. This brings with it a certain amount of clout among property circles and few could deny that it is a popular place to live.
Most buyers would also agree that this popularity comes with a price tag. Over the last few years it has become quite difficult to locate decent houses within the area for under $800,000, a fact that has been reflected in the performance of houses of late. Three year growth in the housing market has been only 3%, according to April RP Data figures, while 5-year growth barely scraped 10%.
As this happens, the unit market remains an excellent bet. Median unit prices are at $380,000, and residents living in apartments and townhouses get exactly the same advantages from the area. Being an important Perth region, Fremantle abounds with air-conditioned shopping centres, preschools, primary and secondary schools and is the site of the main campus for the University of Notre Dame.
Property data hints at units in the suburb hitting something of a boom – and soon. Rental yields are edging upwards at 5.37%, from 4.51% a year ago. Vacancies are also tight at 0.73%, which says a lot for suburb where almost half of the residents are renters.
Raine and Horne-Fremantle principal John O’Neil believes that Fremantle may also pick up as more fly-in, fly-out tenants move into the area. “We have recently received a lot of applications from fly-in, fly-out tenants, and this usually translates to a corresponding increase in home sales,” he says.
- Distance from Perth CBD: 5km
- Population: 9,613
- Median Price: $280,000
- 12-month growth: -10%
- Rental yield: 6.89%
- Market type: Units
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Many Perth investors are probably not as familiar with Wembley as they are with its neighbour Subiaco. The latter is one of Perth’s premium suburbs and attracts an affluent renter base. It has also been something of a darling among property investment circles, thanks to its strong capital growth in the past. Subiaco even made 23 on this magazine’s Top 100 last year.
Times have changed, however, and while this region of Perth offers some great investment opportunities, the buck seems to have passed to Wembley, which shows much better potential than Subiaco – if not great potential as a whole.
One only needs to look at the stark differences in median prices between Wembley units and houses to get a sniff of the opportunity. Four kilometres from the Perth CBD, houses are median priced at $865,000 – units at only $280,000. This is when units show average annual growth of 13.7%, with yields of just below 6%. Vacancies are almost non-existent at 0.59%, while properties spend 93 days on the market, on average. Another indication of strong demand is the large amount of online search interest the suburb attracts, according to DSRscore.com.au.
Ben Kingsley, founding director of Empower Wealth, believes that Perth’s inner north-west, incorporating Daglish, West Perth, Shenton Park, West Leederville, Subiaco and Wembley, is going to see very good growth in the months and years ahead because of the lifestyle this area offers.
“[It’s] one of the areas to be seen in Perth and the lifestyle drivers of sophisticated living, driven by higher than average disposable incomes and high demand for rental accommodation, will see yields remain strong,” he says.
- Distance from Sydney CBD: 27km
- Population: 32,282 (Hornsby LGA)
- Median Price: $475,000 (units)
- 12-month growth: 3%
- Rental yield: 5%
- Market type: Units
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After being named as one of Australia’s fastest growing rental markets, Hornsby continues its winning streak, racing to 8th place in this year’s Top 100 Suburb list. This is no mean feat considering there were more than 15,000 suburbs in Australia and the shortlist was as long as 250 suburbs.
So what makes this Sydney Upper North Shore suburb stand out? First is the strong demand from both renters and owner occupiers. Second is the tight supply of both rental and properties for sale.
Hornsby’s appeal stems from its affordability, accessibility and convenience. The suburb is located within 27km of the Sydney CBD and boasts a number of express trains on both the Northern railway line and the North Shore line, enabling travel to the city via Strathfield or Chatswood respectively. Express peak hour train travel to the CBD takes approximately 40 minutes.
Buses also run regularly to and from CBD, Macquarie University and around the Upper North Shore area.
Notable amenities in the suburb include a massive Westfield Shopping Centre that houses cinemas, restaurants, Myer, David Jones as well as Coles, Woolies and other retailers. Hornsby also has a number of schools including a TAFE campus, hospital and many park lands.
“Hornsby has strong appeal to tenants due to the services offered and its location,” says Kim Quick, residential director, Herron Todd White-NSW. “It also offers a variety of properties at various price bands that allow for future capital growth.”
7. ALEXANDRIA, NSW
- Distance from Sydney CBD: 4km
- Population: 5,900
- Median Unit Price: $450,000
- 12-month growth: -1%
- Rental yield: 6.36%
- Market type: Units
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Ranked number one in this magazine’s Top 100 last year, Alexandria remains an excellent investment choice. Four kilometres from the Sydney CBD, units are remarkably affordable at around $450,000, rental yields are high (6.36%) and the suburb is one of the Harbour City’s most popular places to live.
Local agent Brad Gillespie of McGrath-Edgecliff says that one of the best things about the suburb is that it is improving all the time. “Many of the outer streets were once industrial and are slowly being replaced by trendy cafes and restaurants, so for many people it’s a great place to live,” he says.
The suburb is located close to three universities (Sydney University, the University of NSW and the University of Technology, Sydney) and benefits from demand for student housing as a result. Professionals also love the area thanks to its proximity to the CBD, with the average age of residents at 33, according to the Australian Bureau of Statistics.
Surprisingly, for a suburb so close to the CBD, most residents are owner-occupiers, with renters accounting for 34% of households. This is reflected in the good condition that most properties are in, and Gillespie says that two to three bedroom terraces rule the market. “Young professionals usually come to Alexandria because it’s affordable and close to the city, so these properties usually attract the most demand,” he says.
- Distance from Perth CBD: 1,308km
- Population: 7,850
- Median Price: $775,000 (houses), $645,000 (units)
- 12-month growth: 26.8%
- Rental yield: 10.08%
- Market type: Units and houses
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Located over 1,000km north of Perth is South Hedland, right next door to Port Hedland. The region is in the midst of a mining boom, with houses and apartments routinely renting for $80-$100,000 per year.
Charles Tarbey, chairman of Century 21 Australasia, says investors are in a unique position to benefit from the resources-driven growth in the region, as South Hedland is able to deliver positive cash flow– and then some.
“It’s at the centre of WA’s iron ore boom,” Tarvey says, “and new development opportunities remain limited, which is keeping upward pressure on house prices.”
South Hedland is currently undergoing a $23 million government funded revamp, but that’s hardly the exciting news when compared to the whopping yields the suburb offers. Standard three-bedroom homes are renting for upwards of $1,500 per week, and local real estate agents report that mining companies are more than willing to sign long-term leases at these inflated rates.
Rick Hockey from Hedland First National confirms that rental demand is through the roof. “We’re experiencing a huge amount of rentals at the moment – we’ve had up to 20 companies turning up to a property to view it, and rentals are often going for higher than the asking price. This has happened quite a few times,” he says.
Investing in mining towns is not without risk, but if this type of investment suits your budget and risk profile, there’s no time like the present to take action. With tight vacancy rates of just 0.86% and renters accounting for 56% of the suburb, there are plenty of opportunities yet for investors to take advantage of South Hedland’s booming property market.
