property investment
Where to Find Investment Bargains in Australia’s Property Hotspots
“A two-bedroom unit in Wollongong or a modern four bedroom house outside of Brisbane? You can actually get into some great property investment hotspots with less capital than you think! Here’s what you can get for less than $500 000!”
What’s one of the most common misconceptions that puts people off investing in property? It’s that they simply can’t afford to do it – that you need to be in a top income bracket to be able to get into property investment in any part of Australia.
But yet there are still bargains and opportunities to be had. Not only can you still buy decent property for less than $500 000 around Australia, you can still buy into some of the top property hotspots that are trending high with rental returns and growing housing prices. But, as you will see, some areas give you a much better return than others.
Sydney: look to apartments further out
Sydney is still a relatively popular destination for investors but the heat has really come out of the market. It’s fair to say that Sydney is nowhere near as strong as it once was. Housing prices have dropped by 4.5% in the last year. Clearance rates are around a sluggish 50%. Apartment prices in the once fertile Western Sydney market have fallen. Yet it’s still a hard market to break into. There are opportunities but they are lying further out of Sydney. For instance, $450 000 can get you a two-bedroom apartment in Wollongong and $400 000 can land you a two-bedroom apartment in the south west region of Campbelltown.
Both Wollongong and Campbelltown are areas of strong growth, but there’s always a danger with apartments in the Sydney region that a sudden over development will lead to a surplus of units on the market. This in turn leads to a drop in rental prices, so you have less income plus the value of your property can also be affected.
Melbourne: smaller houses in the outer suburbs
Melbourne is going through a similar property experience to Sydney. The two cities seem to share the same property cycle. There’s a dramatic cooling off in housing prices after the giddy rush of the last few years. Melbourne has also been hit hard with an oversupply of apartments. This has pushed prices down. Having said that, there are still bargains around. For instance, Wyndham Vale in Melbourne’s outer west has a good annual growth of around 10%. You can pick up a two-bedroom house in Wyndham Vale for around $410 000. It’s one of Melbourne’s faster growing suburbs, but it is 40 kms from the CBD. Broadmeadows, 16 kms north of the CBD, is much closer.
Here it’s possible to buy a two-bedroom house for $430k. However, this is a suburb where house price growth has outstripped rental yields. Housing prices galloped up by 80% in the last five years, yet rental income hasn’t risen as fast. So you won’t necessarily make as strong a profit on rentals depending, of course, on what you buy.
Brisbane: many good buys close to the city
While Melbourne and Sydney are currently going through a flat lining in their property cycle, Brisbane remains the most buoyant of the major property markets. Indeed, some areas are enjoying stratospheric jumps in housing prices and surges in population growth. Take some of the suburbs in Ipswich. This area has been going gangbusters and for the last few years has been outstripping some parts of Brisbane and the Gold Coast in terms of growth. A new build four-bedroom house in that area can fetch around $420 000, which is a terrific bargain considering the region has jumped in value by about 20% over the last 12 years.
Indeed, you can still cherry pick modern new builds – a three-bedroom house for $350 000 in the outer suburbs north, south and east of Brisbane.
There are other areas around Brisbane such as Logan City that have seen dramatic housing price increases over the last few years. There you can buy a three-bedroom house for $305 000. This area has been popular for investors as it’s a very high rental area, meaning you get the benefits of strong rental income as well as housing price growth.
Many other areas further out, such as Springfield or the Moreton Bay region, are also highly prized. Moreton Bay is one of the fastest growing areas of Queensland and perfectly located between Brisbane and the Sunshine Coast. Here it’s still possible to buy a brand new three-bedroom house for $440 000 and enjoy the windfall of high rental yield. The combination of (still) low housing prices and high rental income makes properties in the Brisbane area very attractive to investors, as they virtually pay for themselves.
If there’s a downside to Queensland property investment, it’s that it’s no longer one of Australia’s best-kept secrets. Many of these suburbs mentioned have already been discovered and the housing prices are jumping up as a result. Canny investors are starting to look into other areas around the Brisbane corridor to get the best returns.
Contact Mirren today
No guesswork. No dramas. Just results.