It is still possible to buy an investment property for under $500,000 — with strong yields and good capital growth prospects.
That’s according to new research from depreciation experts Washington Brown and Hotspotting, which reveals the top 10 investment locations for houses and units around the nation with median prices under $500,000 and yields above six per cent.
RELATED: QLD dominates Australia’s top 10 investor hot spots
Four of the locations are in Queensland, with three each in New South Wales and Western Australia — and many are places you didn’t even know existed.
This four-bedroom house at 43 Duranbah Circuit, Blacks Beach, is on the market for offers from $545,000.
“Research like this shows current and prospective investors that there are a variety of affordable investment locations with excellent cash flow and capital growth still available to purchase,” Washington Brown director Tyron Hyde said.
Mr Hyde said investors in the top investment areas around the nation were also benefiting from thousands of dollars-worth of depreciation benefits each year.
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“Across the top 10 locations, annual taxation benefits potentially range anywhere from $3,500 to nearly $7,000, depending on the type of property and the location,” he said.
This four-bedroom house at 17 Stirrat St, Calliope, is on the market for offers over $479,000.
HOUSES
1. Blacks Beach, QLD
Mr Hyde said one of the most promising spots was Blacks Beach, where both houses and units offered “excellent yields” and property price growth prospects.
“Blacks Beach in Mackay continues to offer buy-in prices in the $330,000s for units and the $400,000s for houses,” he said.
“Its ultra-low vacancy rate of just 0.3 per cent is also pushing rents and cash flow higher, wit yields of six to seven per cent common.
“For investors in Blacks Beach, for example, the possible annual taxation benefit could be approximately $6,900 resulting in a net benefit of about $2,500 to $3,100 over the past year.”
Real estate expert and Hotspotting.com.au founder Terry Ryder.
Hotspotting director Terry Ryder said the Central Queensland city of Mackay was being targeted by property investors, with the northern beach suburbs popular.
“Over 200 houses have sold in Blacks Beach in the past 12 months, with properties typically selling within two weeks,” Mr Ryder said.
“The median house price has increased 14 per cent in the past year and the median rent is up 12 per cent, with vacancies ultra-low at just 0.3 per cent.”
2. Calliope, QLD
Calliope is a standalone township, but part of the Gladstone local government area in Central Queensland, about 20km from Gladstone.
“Its median house price is $425,000, having grown at an average annual rate of 11 per cent over the past five years,” Mr Hyde said.
“The median rent has increased 18 per cent in the past 12 months, with vacancies just 0.5 per cent. It’s a popular market with houses typically selling within three weeks.”
According to Washington Brown, the annual depreciation taxation benefit on a median priced house in Calliope could be $4,180.
This three-bedroom house at 10B Frankel St, Carey Park, is on the market for offers from $499,000.
3. Carey Park, WA
Mr Ryder said the regional city of Bunbury had been among the nation’s best-performing markets in the past two years.
“The suburb of Carey Park continues to deliver on every metric, with houses typically selling in less than two weeks, the median house price up 29 per cent in the past year, but still in the low $400,000s, and the median weekly rent rising 23 per cent,” he said.
“Yields remain well above 6 per cent.”
Mr Ryder said Bunbury also offered an attractive seaside lifestyle and affordable housing, which accounted for it having a population growth rate well above the national average.
According to Washington Brown, the annual depreciation taxation benefit on a median priced house in Carey Park could be $3,725.
This three-bedroom house at 269 Joiner St, Koongal, is on the market for offers from $430,000.
4. Koongal, QLD
This Rockhampton suburb has a median house price below $400,000, despite a five-year growth average of 16 per cent per year, including 21 per cent price growth in the past 12 months.
“But with houses typically selling in a fortnight, it’s likely to rise well beyond that benchmark in the near future,” Mr Ryder said.
“The suburb has also recorded major growth in its median weekly rental — up 17 per cent in the past year, with a median rental yield for houses of 6.5 per cent.”
According to Washington Brown, the annual depreciation taxation benefit on a median priced house in Koongal could be $4,481.
This two-bedroom house at 281 Seventh St, Wonthella, is on the market for $320,000.
5. Wonthella, WA
Mr Ryder said the regional city of Geraldton had joined Mandurah and Bunbury in delivering “outstanding uplift” in both prices and rents.
“The affordable suburb of Wonthella has recorded 26 per cent annual growth in its median house price (but still well below $400,000) and 27 per cent uplift in its median weekly rent,” he said. “Typical yields are a tick below 7 per cent.
“Its location between the resource-rich Pilbara area and the expanding Kimberley region to the north ensures the LGA’s continued prosperity.”
According to Washington Brown, the annual depreciation taxation benefit on a median priced house in Wonthella could be $5,545.
UNITS
1. Bowen Hills, QLD
This one-bedroom unit at 308/16 Brewers St, Bowen Hills, is on the market for $410,000.
On the doorstep of Brisbane’s CBD, this underrated suburb offers affordable apartments with rental yields above 6 per cent.
“Bowen Hills offers proximity also to Brisbane’s largest hospitals complex, but with affordable units,” Mr Ryder said.
“The median price has increased 15 per cent in the past 12 months to a little above $500,000 and the median weekly rent has grown at a similar rate. Units currently sell in about three weeks in this popular market.”
According to Washington Brown, the annual depreciation taxation benefit on a median priced unit in Bowen Hills could be $5,341.
2. Glendalough, WA
A two-bedroom unit in this complex at 92/16 Leeder St, Glendalough, is on the market for offers over $389,000.
Mr Ryder said the unit market in this City of Stirling suburb, about 6km from Perth’s CBD had the kind of metric investors dreamed about.
“The median unit price has risen 24 per cent in 12 months, but still affordable at $355,000,” he said.
Rents have increased 21 per cent in that time, underpinned by a vacancy rate of 0.4 per cent, and yields are close to 7 per cent.
According to Washington Brown, the annual depreciation taxation benefit on a median priced unit in Glendalough could be $6,027.
3. Harris Park, NSW
A two-bedroom unit in this complex at 10/5 Wigram St, Harris Park, is on the market for under $500,000.
This suburb may be considered downmarket, but it’s recording above-average market growth thanks to its affordability, good transport links and proximity to the Parramatta CBD.
“The median unit price has risen 13 per cent to $485,000 in the past 12 months and the median weekly rent has increased 16 per cent in the same time period, supported by a low
vacancy rate at 1.6 per cent,” Mr Hyde said.
“The Parramatta LGA is Sydney’s second-largest economic base and its economy is expected to grow further with major projects either proposed or under way including the Sydney Metro and Parramatta Light Rail.”
According to Washington Brown, the annual depreciation taxation benefit on a median priced unit in Harris Park could be $5,302.
4. Lakemba, NSW
This one-bedroom unit at 1/64 Colin St, Lakemba, is on the market for $369,950.
Mr Ryder said the Canterbury-Bankstown LGA was attracting buyers for its relative affordability in an expensive Sydney market, especially for units priced below $500,000.
“Lakemba is seeing growth in both unit prices, up 13 per cent to $440,000 in the past 12 months, and the median weekly rent is up 24 per cent in the past 12 months, with a vacancy rate below 1 per cent,” he said.
“It is the region’s relatively affordable apartment price point which continues to generate interest from first-home buyers and investors.”
According to Washington Brown, the annual depreciation taxation benefit on a median priced unit in Lakemba could be $3,750.
5. Rivervale, WA
A two-bedroom unit in this complex at 5/92 Surrey Rd, Riverdale, is on the market for offers from $499,000.
Mr Hyde said Rivervale was becoming increasingly popular with buyers seeking affordable units in good locations between the Perth CBD and the city’s airport.
“Units in the suburb of Rivervale are typically selling in less than 20 days, with the median price up 13 per cent in 12 months, but still well under $500,000, while rents, underpinned by a vacancy rate below 1 per cent, have increased 20 per cent in the past year,” he said. Rental yields are around 7 per cent.
According to Washington Brown, the annual depreciation taxation benefit on a median priced unit in Rivervale could be $6,456.
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