Capital cities have at least six suburbs where rental yields outweigh the cost of a mortgage which, according to Aussie Home Loans, is prompting first time investors into the market.
For many years, property investment has been seen as the domain of the wealthy investor with cash to spare, but according to executive chairman of Aussie, John Symond, property investment is within reach for everyday Australians.
“Every day Australians can seriously consider moving into the investment property market and having the rent cover the mortgage. In effect they could ‘set and forget’ an investment plan for their future,” said Mr Symond.
Low interest rates and rising rents are encouraging aspiring property investors to take their first step on the property ladder.
After reviewing suburb statistics commissioned from RP Data, Mr Symond revealed there are at least half a dozen suburbs in each capital city where gross rental yields are greater than the cost to repay the mortgage.
“Both fixed rates and variable rates are the lowest they have been in years, with interest rates can be below five per cent, housing prices in some areas are historically low but are starting to move back up and now investors can earn rental yields between five and 10 per cent in some areas, and as high as a whopping 16 per cent in one area of Darwin.
“Properties with high rental yields are of benefit to those investors who have less disposable income that they can use to pay the property's associated bills.
“If they are earning higher gross rental yields, they can afford to own it in the first place, where otherwise they might not be able to,” he continues.
The best suburb in the country for investors to consider was Bellamack in Darwin, with a 16.9 per cent rental yield coupled with an even bigger 24 per cent increase in rents in the last 12 months.
However RP Data identified at least half a dozen in each city that showed solid investment potential over the last 12 months.
According to RP Data's statistics, in Sydney and surronds Bella Vista, Ultimo, Wyong, Bradbury, Tregear and Jamisontown were all identified as winning suburbs.
Investor hotspots for Melbourne and surrounds were Carlton, Whittlesea, Chirnside Park, Broadmeadows, Melton and Melbourne.
Brisbane investors are looking to Goodna, Woodridge, Dinmore, Wynumm West, Gailes and Waterford West for opportunities.