Investors are increasingly targeting outer-city areas, with new research showing these regions delivering strong rental and capital returns.
This week, Onthehouse.com.au released the findings of its research from its property data experts Residex, which revealed the suburbs that presented the top investment opportunities for residential property buyers, and the streets with the best renovation potential.
Although New South Wales continued to dominate the returns charts, Australia’s top suburb for investors was Morayfield in Queensland, with a predicted five-year growth of 10 per cent and a median rental yield of 5.51 per cent.
The remainder of the list is dominated by New South Wales, taking out spots two to six, with Mount Annan, Sanctuary Point, Karabar, Berkeley and Katoomba.
Each of these suburbs recorded a total return of 15 per cent when combining rental yields and future growth.
Nugunnawal in ACT also made the list in seventh place, with median rental yield of 5.78 per cent and five-year growth of nine per cent.
Seville Grove and Clarkson in Western Australia came in at spots eight and nine, while Moss Vale in NSW rounded out the top 10.
John Edwards, consulting analyst for Onthehouse and founder of Residex, said: “There’s been a lot of noise in the media recently regarding the possibility that markets are overheating, especially in major metro areas like Sydney and Melbourne. However, with interest rates still low, investors who do their research will find some very attractive options.
“One of the oldest tricks of the trade that buyers shouldn’t forget about is looking for the worst house on the best street. Renovating a property can add immediate value if it’s done right.”
The research was based on rental yields and five year capital growth predictions with industry surroundings, confidence ratings and employment opportunities taken into consideration.
Mr Edwards said while there was full confidence in the statistical models, it was vital the data was paired with insights and local knowledge.
“Our models have indicated that these areas are the top picks of markets we think are going to perform well – but only by building personal knowledge can investors really make an astute purchasing decision.”