New South Wales’ North Coast region shelters some of the markets with the most attractive rental yields for property investors, according to new findings.
A new study by buyers’ agency InvestorKit has unveiled eight markets in NSW North Coast that possess strong market fundamentals for investors.
These include Gosford, Wyong, Lake Macquarie - East, Newcastle, Port Stephens, Port Macquarie, Coffs Harbour, and Richmond Valley - Coastal.
According to the study, these areas are under pressure, as indicators show tight conditions surrounding the demand and supply.
InvestorKit head of research Arjun Paliwal said the whole NSW North Coast appears to be in a property boom, with its house prices rising by at least 10% over the past 15 months.
"Property market pressure for the NSW northern coastal markets is currently some of the highest in the country,” Mr Paliwal said.
“This is good news for those already in the market but problematic for prospective buyers due to the extremely high competition.”
"Investors can expect a healthy gross rental yield for most of the coastal cities of around 4 per cent, but this will fall closer to the major hubs of Sydney,” Mr Paliwal said.
Mr Paliwal said there are several factors contributing to the market pressure in the NSW North Coast region.
These include the low interest-rate environment, greater access to credit, a strong local job market, and changing lifestyle preferences that encourage Australians to look beyond the capital cities.
"We expect that market pressure over the next 12 months will remain intense, sales and rental pricing will continue to surge, and the North Coast regions will continue to outperform our capital cities over 2022," he said.
Best NSW North Coast markets for investors
According to InvestorKit, these are the eight best markets in the NSW North Coast for investors.
Most of these markets have rental yields hovering around 3.5%.
Take note the median prices stated for each market are from the latest data available from the sources enclosed in parentheses.
Gosford - $790,000 (Realestate.com.au)
Gosford recorded an 18.4% growth in median housing price over the past 12 months.
While new listings declined in this market, sales volume continued to grow since June.
Demand for rental property also remained high, with the average number of monthly listings down 28.7% over the past year.
Gosford's rental yield is at around 3.5%.
Wyong - $725,000 (Realestate.com.au)
Wyong recorded a 16.7% gain in median prices over the past year while reporting a 40.3% reduction in the average number of days for sale in the market.
Wyong’s rental vacancy rate is at 0.3%, indicating a “rental crisis”. The tight rental conditions in this market have led to a rise in median rents.
This market has a rental yield of 3.5%.
Newcastle - $1.38m (Realestate.com.au)
Newcastle's median property price increased by 15.3% on the 12-month period.
Over the same period, monthly rental listings in the region declined by 21%, making Newcastle a high-pressure rental market.
Port Stephens - $800,000 (PRD Real Estate)
The median price in Port Stephens has increased by 10.7% over the past year, as properties remained listed in the market 40% shorter than last year.
Lake Macquarie - East - $675,000 (Real Estate Investar)
Since the second quarter of 2020, the median price in Lake Macquarie - East has been rising strongly.
In fact, it reported a 13.7% increase in prices over the past 12 months.
The demand for rental properties in this market has also been strong, with listing days decreasing by a third.
Port Macquarie - $703,500 (Realestate.com.au)
Of all the markets in this list, Port Macquarie registered the lowest median price gain at 10.2%.
Listings in this market have been on the decline since June 2020, going down by 35% on average every month.
Still, it has one of the highest rental yields at 4%.
Coffs Harbour - $660,000 (Realestate.com.au)
Coffs Harbour reported one of the highest median price gains of all markets in this list at 21%.
Its rental market also shows signs of increased competition, as listings declined by 31.8% over the past year.
Rental yields in Coffs Harbour are expected to reach 4%, which is "rare" for a coastal location.
Richmond Valley - Coastal - $389,000 (Real Estate Investar)
Richmond Valley - Coastal, which includes Ballina, Brunswick Heads, Byron, Bangalow, Woodburn, and Evans Head, took the lead in terms of price growth.
Over the past year, the median price in this market grew by 27.3%.
Listings in Richmond Valley - Coastal continued to be on a decline.
On the other hand, monthly sales volumes remained on an uptrend since mid-2020, and recently hit a peak in July 2021.
Rental listings in this market also went down over the past year by 37.1%.
Photo by Prescott Horn on Unsplash.
