The current conditions of rental markets in the Gold Coast, Brisbane, Sydney, and Melbourne could indicate that it is high time for property investors to act.
PRD Real Estate released its latest affordability report and found that rental markets in some of the biggest regions are starting to show favourable conditions to potential investors who want to beef up their portfolios.
Over the rest of the year, the Gold Coast is expected to have the most favourable conditions for investors.
Rental yields on the Gold Coast hit 4.6% in March, at the time when the median weekly house rents increased annually by 20.6% to $720. Rents on the Gold Coast went up at a higher rate than median sale prices, which grew by 16.8%.
Rental properties on the Gold Coast only took 17 days on average before becoming occupied again. This helped maintain the region’s vacancy rate at 0.4%, which is considerable compared to the other major rental markets.
“Gold Coast Metro’s vacancy rate is the lowest compared to Brisbane, Sydney, Melbourne, and Hobart; and showcases a historical low in the past 24 months — this should provide greater confidence to investors,” the report said.
“Now is the time for investors to act, to capitalise on a slower selling market and higher rental demand.”
Ripe conditions in Sydney, Melbourne
Would-be property investors in Sydney and Melbourne can also take advantage of the current market conditions.
Weekly house rents in Sydney grew by 25% to $750 per week in March. At the same time, the median selling price for a house only increased by 5.6%.
Vacancies in Sydney’s metro region were tight, with a rate of 1.6%, still below the benchmark of 3%.
A similar situation can be observed in Melbourne, where weekly house rents increased by 15.2% to $530 per week while the median sale price declined by 1%.
Melbourne’s vacancy rate was also below the 3% benchmark, hitting 1.9% in March.
The growth gap between rents and sale prices in these two cities are providing greater confidence to investors who are planning to enter the market.
Brisbane still at its prime
The situation is a little different in Brisbane, which, according to the PRD report, is at its peak market conditions.
On an annual basis, median house price in Brisbane went up by 28.2% to $950,000.
“An undersupply is evident in Brisbane Metro’s house market, as median price growth is alongside lower sale volumes,” the report said.
Meanwhile, weekly rents also went up at a considerably strong rate of 13.4%, reaching $550. This was supported by Brisbane’s low vacancy rate of 0.7%.
“Brisbane Metro’s vacancy rate continues to show a declining trend since April 2020, showcasing historical low trends in the past 24 months — combined with median rental price growth this creates a confident investment environment,” the report said.
Top suburbs for investors
The PRD report identified three suburbs in the housing markets of the Gold Coast, Brisbane, Sydney, and Melbourne which exhibit the right balance of investment potential, affordability, liveability and project development.
|
Region |
Suburb |
Median Price ($) |
Rental Yield (%) |
|
Gold Coast |
Oxenford |
750,000 |
4.6 |
|
Carrara |
850,000 |
4.5 |
|
|
Mudgeeraba |
930,000 |
4.5 |
|
|
Brisbane |
Tingalpa |
735,981 |
3.6 |
|
Geebung |
790,000 |
3.8 |
|
|
Lota |
892,500 |
3.5 |
|
|
Sydney |
Miranda |
1.64m |
2.4 |
|
Peakhurst |
1.42m |
3.0 |
|
|
Riverwood |
1.2m |
3.0 |
|
|
Melbourne |
Greensborough |
1.0m |
2.6 |
|
Mulgrave |
1.0m |
2.5 |
|
|
Briar Hill |
1.1m |
2.6 |
—
Photo by @lukechesser on Unsplash
