High investment interest continues in Mount Gambier: HTW

High investment interest continues in Mount Gambier: HTW
High investment interest continues in Mount Gambier: HTW

Valuation experts Herron Todd White have suggested that in comparison to the city and other SA regional areas, the returns on properties in the Mount Gambier region have been relatively good in recent years.

The November HTW review advised that while the rental returns are attractive for investment properties, capital growth in the region has remained relatively stable.

"Local and out of town investors are purchasing properties in Mount Gambier.

"Local investors typically will spend less on a property (say under $250,000) and generally lean towards a detached family home."

The report added that in recent years the number of unit sales occurring has stabilized, however they are approximately half of what they were around five years ago.

"In recent years we have averaged around 70 units sales a year, while from 2007 to 2009 there were approximately 140 unit sales per year.

"Out of town investors often have larger budgets and will invest in properties with a value greater than $300,000."

The review noted that properties in Mount Gambier are much more affordable than other regions and $300,000 will buy a good quality family home and will appear to the investor that they are getting good value for money compared to other locations.

"Also in this price range the dwellings are likely to have been recently constructed offering good tax depreciation benefits to the investor.

"Gross yields for groups of flats range from 6% to 8%.

Yields vary for a number of reasons, but typically the location, age of improvements and condition are the main influences."

The report showed that maisonettes have higher gross yields ranging from 8% to 10%.

"While the yields are higher these types of properties are generally riskier as they are situated in less desirable locations, accommodation is basic and properties tend to get poorly treated.

"Houses in regional areas can show gross yields of around 5% to 6%, however they typically are a more risky investment as market values can fluctuate and they can often have extended periods of vacancy."

 

Tags: 
Property market Mt Gambier

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