In this article, we’ll take you through seven of the best places to buy investment property in Australia right now. We’ll also give you some insider tips on what to look for when you’re choosing an investment property.
By the end of this article, you’ll have all the information you need to make a well-informed decision about where to invest in property in Australia.
Investing in property is a solid way to secure your financial future and generate passive income. But with so many different locations to choose from, it can be hard to know where to start. If you’re looking for the best places to buy investment property in Australia, you’ve come to the right place.
Key Takeaways
- The 7 Best places to buy investment property in Australia
- Should you invest in a home or a rental property?
- What to consider before buying a rental flat as an investment
- Is the abundance of apartments a problem?
- Finding neighborhoods with a lot of growth potential
- Answers to some of the frequently asked questions
The 7 Best Places To Buy Investment Property In Australia
If you are determined to find an apartment or unit with the potential for significant returns, we believe these 10 areas are worth looking into further.
So, in 2022, which suburbs need to be on your radar? Here are Australia’s top 7 investment locations.
1. Woolloongabba
Wollongong real estate had a fantastic year in 2018, recording compound annual growth of 7.6%. Education and tourism are vital to the local economy’s main drivers. Sydney’s exorbitant costs have also aided, contributing to the roughly 1100 individuals who relocate to the area weekly.
Rental housing is also strongly influenced by the local school industry, which should keep vacancy rates low for the foreseeable future.
The Wollongong local free bus loop, a preferred mode of transportation for college students, provides service to Fairy Meadow, Wollongong CBD, North Wollongong, Keiraville, and West Wollongong, among other nearby suburbs.
2. Hobart apartments
Compared to the other state capitals in Australia, Tasmania is more cheap, but it has also risen to the top of many property investors’ lists owing to lifestyle elements that continue to drive people to the Apple Isle.
Hobart is worth looking into in terms of apartments due to low pricing – the median apartment price in Hobart in December 2018 was $381,819, and there was a high demand for rentals.
While the state of the rental market improved by 5.8% during 2018, Hobart’s unit sales experienced exceptional growth of 19.6%. A tight vacancy rate of only 2.0% reflects the high demand for rental units.
According to QBE’s Australian Housing Outlook, this trend will persist, and by the middle of 2020, the median unit price in Hobart is expected to reach $420,000, representing a cumulative gain of 9%.
3. Sunshine Coast And Gold Coast Apartments
In 2018, the Gold Coast and Sunshine Coast did better than Brisbane, with an annual higher price rise. The 2018 Commonwealth Games had a role in this, but other lifestyle variables that have contributed to increased interstate migration and rapid population expansion in both places also played a role.
According to CoreLogic, rental yields were 5.4% for the year ending in March.
You still need to research and examine supply and demand indicators. Regarding particular areas, Buddina, Forest Glen, and Noosa Heads all had growth in 2018.
4. Melbourne Apartments
Fitzroy and Carlton, famous for their closeness to educational facilities and lifestyle attractions, have some of Melbourne’s most significant rental property demand.
A one-bedroom flat in the area costs $412,000, whereas the median cost of a unit in Fitzroy is approximately $753,000. With 859 visitors per property, this is more than the state average. A one-bedroom rental may be expected to rent for $450 per week, a two-bedroom apartment for $645 per week, and a three-bedroom unit for $810 per week.
The suburbs with the most significant increases in median unit values for 2018 are Dandenong (22.1%), Kew (19.3%), and Brunswick East (12.9%), according to the Real Estate Institute of Victoria (REIV).
5. Sydney Apartments
Even for flats, affordability is a significant concern if you consider entering the Sydney market. Buying a home in a city’s eastern suburb is a wise investment if you’re hoping for long-term capital gain.
This is especially true for the areas along the new light rail line that runs through Surry Hills and Randwick from the CBD to Kensington.
6. Brisbane Apartments
Even while the Brisbane apartment market has specific areas of oversupply, there are still some hidden gems where older, established units are in high demand. The hip New Farm, near the CBD, is the most prominent of these, which has flats with bigger floor plans than many more recent constructions.
Here, the typical price for a unit is $383,904, and realestate.com.au shows this postcode as high demand with 689 visitors per property (March 2018), which is over twice as much as many as the state average.
7. Newcastle Apartment
Like Hobart, Newcastle has escaped its reputation as the ugly duckling and has since developed a strong local economy supporting its new identity. This includes significant infrastructure investment, clever tourism marketing that has helped it become one of NSW’s fastest-growing rural towns, and units that reported annual returns of 7.1% in 2018.
Should You Invest In A Home Or A Rental Property?
Your fundamental investing goals and approach should be considered when choosing a unit/apartment or home to invest in. To know what you can buy, you must also establish your financial situation.
Although they are often more expensive to buy, houses typically outperform units; therefore, most investors start with an apartment as their first investment. The national median price of a home is now $766,438 on Domain, while the price of a condo is at $530,999.
What To Consider Before Buying A Rental Flat As An Investment
Agent Mark Dawes of Richardson & Wrench (Alexandria) advises against making an investment property purchase based only on feelings. He thinks you should go beyond that and consider things like pricing, location, and value for money.
Then, consider whether the surrounding region is likely to undergo expansion soon. An established suburb without significant growth plans in the works will not see the same returns as a location with these elements.
Additionally, he suggests extensive study of your neighborhood, comprehending the local market’s characteristics, and seeking a unit with a standout feature. Additionally, the asking price must be reasonable for the neighborhood, with attractive rental yields and low vacancy rates.
Is The Abundance Of Apartments A Problem?
When there is a more excellent supply of flats or units than demand, an overstock of these properties results. Observable indicators of a local surplus of units include:
- Falling prices due to oversupply
- The vacancy rate rising
- A decrease in renting costs
- A decrease in construction approvals as a result of these circumstances
In some capital cities, there is now an issue with apartment oversupply. This includes parts of the CBDs of Brisbane, Melbourne, and Southbank. There are indications of oversupply in Sydney’s Hills and the Zetland neighborhood (near Green Square), where vacancy rates have increased above the Sydney average.
Finding Neighborhoods With A Lot Of Growth Potential
Property investors should try to select suburbs with significant growth potential to optimize their investment return in the shortest possible period. The key is to locate a location that benefits from as many factors as possible, such as:
- An expanding population will increase demand for your home.
- A community economy with a wide range of active employers and industries
- Anywhere where local infrastructure improvements, such as new transportation and public services, are being funded by the government
- Areas, where the rental yield is increasing suggest a high demand for rental properties.
- Regions were inflation-beats-median-household-income growth.
- Low home availability and great buyer demand.
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Conclusion
The typical Australian home used to include a garden, barbecue, and pool, but this is rapidly disappearing, especially in our cities.
The reality is that an increasing number of individuals are opting to live in flats or condominiums, with 47% of all new homes starting construction in the five years leading up to 2018 compared to 42% in the ten years prior. People are willing to live in apartments if it means being close to amenities like cafés, shopping malls, and transportation hubs.
FAQS
Is 2022 A Good Year To Buy An Investment Property?
If you’ve been looking for ways to enhance your passive income and diversify your portfolio, 2022 might be an excellent time to explore purchasing an investment property.
Is 2022 A Good Year To Buy A House In Australia?
The pent-up demand is dwindling: Although Covid caused many purchasers to postpone their intentions to purchase a home during the last several years, a sizeable portion already did so.
We may anticipate that fewer people will be looking to buy in 2022 because there are only a finite number of buyers and sellers.
Which City Is Best For Property Investment?
The best city for property investment is Frisco, TX, with a rating of 75.1
Is It Better To Put More Money Down On A House Or Invest?
If you put down a more significant amount, you won’t have as much cash on hand for investing or other key goals, such as paying off college loans or funding a wedding. Making a higher down payment could be advantageous if the interest rate you receive on your mortgage isn’t highly favorable.
How Much Should I Spend On An Investment Property?
According to the “2% rule,” an investment property’s monthly rent should be 2% of the purchase price or more. Here is an illustration of the 2% rule for a house with a $150,000 purchase price: $150,000 x 0.02 = $3,000
Should I Invest In Stocks Or Real Estate In 2022?
The answer is a loud “neither” in 2022 when asset values plunge from their high. In the third quarter (Q3) of 2022, stock prices were down 17% from a year earlier, plummeting from historic highs.
See the video below for additional explanations:
About Author
- I am a professional article and e-book writer with 4 years of experience, I write on well research content on cryptocurrency, stocks, loans and finances.
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