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Small town, big rental returns

21 July 2014 Staff Reporter

A small town and community has recently recorded rental yields well above Australia’s most lucrative real estate markets, a recent market report shows.

The Pilbara Market Outlook report, commissioned by Megara, revealed that the rapidly growing town of Port Hedland would achieve a gross rental yield of over 7.50 per cent on current prices and rents, compared to its counterparts Melbourne with 3.40 per cent, Sydney with 3.90 per cent, Perth with 4.30 per cent and Brisbane with 4.70 per cent.

Megara’s managing director, Matt Pickford, said that although prices, rents and yields have eased from the mining boom days, the key findings from the Pilbara Market Outlook suggest that resource-driven communities such as Port Hedland still stand as an extremely smart investment opportunity.

“With so many resource heavyweights injecting such large amounts of capital and human resources into the region, it comes as no surprise that community services and accommodation in Port Hedland are in extremely high demand. We are witnessing the classic tale of ‘supply and demand’,” he said.

“By 2035 it is estimated the current population of 20,000 will rise to over 50,000, an average of 2,000 people per year. That’s 10 per cent of the current population to be added each year.

“This demand increase will likely far outstrip all known housing development currently planned, suggesting Port Hedland’s consistently high rental yields will continue well into the future,” he added.

Investment in long-term civil infrastructure has also been significant in the region to support the rapid growth and to ensure sustainability well into the future, including a proposed marina development. 

Small town, big rental returns
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