Rising prices and a flood of new properties haven’t been enough to dethrone one of Adelaide’s most talked-about regions from its title of top-performing investment hotspot.
PropTrack data on South Australia’s suburbs delivering house-owning investors the highest rental yield shows one region dominating the metro figures – with every single one of the top-10 suburbs revealed coming from that area.
We’re talking, of course, about Adelaide’s northern suburbs.
And the star of the show here is Elizabeth north, where the typical house sells for $547,000 and rents for $470 a week, delivering a rental yield of 4.5 per cent.
Elizabeth Park houses weren’t far behind either. Their owners are receiving, on average, a 4.4 per cent return on their $620,000 properties, which are renting for $500 a week.
Davoren Park, Eyre, Salisbury North, Smithfield Plains and Elizabeth Downs houses are all delivering investors yields to the tune of 4.3 per cent, while Elizabeth East, Smithfield and Craigmore houses attract a rental yield of 4.2 per cent.
Aerial view of Adelaide CBD. Picture: Knight Frank
The north has decent representation in the top 10 unit list too, however the top spot was shared by two suburbs.
The first of these were CBD units and apartments, where a median-priced unit of $600,000 rents for $620, returning a yield of 5.1 per cent.
Mawson Lakes units also return a yield of 5.1 per cent, with its homes more affordable at $565,000 and renting for $550,000.
Gawler Ease and Gawler South both made the top 10 for northern units, as did Salisbury East, while closer to the city New Port, St Clair and Keswick in the western suburbs, and Tonsley in Adelaide’s south rounded out the top 10.
Edge Realty selling agent Mike Lao outside a home in Adelaide’s northern suburbs. Picture: Kelly Barnes
Edge Realty director Mike Lao, who sells in the northern suburbs, said the north continued to be hot property, particularly in areas some overlooked because of the image they once had but were now shedding.
“There’s a lot of development happening out there and investors don’t look at stigma – they just don’t want to miss out,” he said.
“There are some really nice developments going in and they’ve really set the trend and are changing the face of the area.
“People are paying whatever they can for whatever they can get.
“I’m selling probably 30 per cent to owner-occupiers, 30 per cent to local investors and the other 40 per cent to interstate investors.”
Mr Lao said, aside from any unforeseen effect the war in Iran has on the market, he couldn’t see any reason why prices, and rents, in the north wouldn’t continue to rise and continue to pay dividends to investors.
Port Pirie’s iconic smelter. Picture: Simon Cross
While many look to metropolitan investments for their security and greater potential for capital growth, those purely chasing rental yield need look no further than regional South Australia, where returns far outstrip those found closer to the city.
According to the data, Port Pirie houses have recorded a rental yield of 7.4 per cent.
Here, a $292,500 house rents for $400.
Both Roxby Downs and Solomontown houses pay investors dividends of 7 per cent, while Peterborough houses recorded a yield of 6.7 per cent.
Ray White Group head of research Vanessa Radar. Image supplied.
Ray White Group head of research Vanessa Rader said regional SA properties played an important role in many people’s portfolios.
“A look at regional markets across Australia reveals many locations where median house prices sit well below $600,000 and rental yields range from 6.3 per cent to 10.7 per cent,” she said.
“For investors seeking properties that can work on a cash flow basis rather than relying on tax concessions, or for first home buyers and lifestyle seekers priced out of coastal and metropolitan markets, these towns are worth understanding.”
Separate Ray White data released yesterday has Port Augusta returning 6.9 per cent, with Ms Rader saying it played a pivotal role in the state’s economy.
“Port Augusta occupies a genuinely important position in South Australia’s economy, sitting at the top of the Spencer Gulf and serving as a crossroads for road and rail freight moving between Adelaide, the outback, Darwin and Perth,” she said.
“It has a hospital, schools and government services that employ a significant portion of the local workforce, and its role in supporting the state’s renewable energy transition has added a new employment dimension in recent years.”
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