Suburban Cairns unit investors reaping the highest yields amid Australia's most active 50 rental suburbs

Suburban Cairns unit investors reaping the highest yields amid Australia's most active 50 rental suburbs
Suburban Cairns unit investors reaping the highest yields amid Australia's most active 50 rental suburbs

Westcourt in Queensland and Larrakeyah in Northern Territory are the suburbs with the highest gross yields for units on the list of the most active rental suburbs. Both suburbs earn yields of gross 6.5% for units, according to RP Data figures.

The original top 50 most highly rented suburbs list was compiled by RP Data’s Tim Lawless using 2011 ABS census data.

The suburbs on the list are those with greatest proportion of rented dwellings, making no distinction between units and houses. The list excluded suburbs with fewer than 200 dwellings or suburbs where more than 25% of rental dwellings are not privately owned.

Property Observer has compiled a subsequent list of the top unit yields for those top rental suburbs. Three of the suburbs on the original list lacked statisitically reliable data for units.

In Westcourt, an inner suburb of Cairns, 62.4% of homes are rented, and the median price for units is $145,000 – the lowest median price in the list.

And in Larrakeyah, an inner suburb of Darwin, 59.1% of homes are rented with a median unit price of $430,000.

However, LJ Hooker Cairns Edge agent Jason Edwards says in real practice he hasn't seen yields like this in Westcourt.

"The figures [for] the rental yields sound high. If we were getting yields that high property would be selling like hot cakes."

Edwards is currently selling unit four at 8 Ascot Avenue for $139,000 with a current rental income of $200 per week. Without taking any outgoings into account this is technically a yield of 7.5, though Edwards says outgoings quickly eat away at this.

"[The apartment earns] $10,400 for 52 weeks. With body corp fees of $3,200 and council rates of $2,200 that leaves you with $5,000. That doesn't add up to 7.48% to any investors I talk to relative to $149,000 purchase price."

Rod Hass, residential sales manager at Knight Frank Darwin, says rental demand in Larrekayah  is driven by oil and gas investments around Darwin.

"It’s a central suburb close to the CBD. It’s one of the premier suburbs here along with Fanny Bay.

"The rental market is quite strong in Darwin with the financial signoff of the Impex project – a $30 billion gas project. We’ve got workers and contractors coming in for that."

He says more unit developments are coming up but the rental market will remain strong.

"The rents are increasing on this time last year. We’ve got a strong rental market, and we’ve got quite a few buildings coming out of the ground."

"It will just balance out. There’s still a shortage of stock and we’re getting good numbers turning up to rental properties. Lots of applications."

The suburbs are followed by Spring Hill Queensland, Sydney NSW and Rosslea Queensland, all with rental yields of 6.4% for units.

The most highly rented suburb, Fortitude Valley in Queensland, comes in at number 10 with a yield of 6% and a median price of $399,000.

The yields for units in the list range from 3.8% in Crawley, WA, to 6.5% in the top two.

Median unit prices range from $145,000 in Westcourt Queensland to $663,500 in Pyrmont NSW.

State

Suburb

Median
Price ($)

Median
Rent ($ per
week)

Yield

(%)

Percentage
of homes
rented

QLD

Westcourt

145000

180

6.5

62.40%

NT

Larrakeyah

430000

540

6.5

59.10%

QLD

Rosslea

230000

285

6.4

62.80%

QLD

Spring Hill

380000

465

6.4

67.70%

NSW

Sydney

525750

650

6.4

63.50%

NSW

Harris Park

295000

360

6.3

66.30%

VIC

Melbourne

370000

450

6.3

63.10%

NSW

Ultimo

430000

520

6.3

67.60%

QLD

Cairns North

225000

260

6

66.80%

NSW

Gosford

276775

320

6

67.60%

NSW

Rushcutters Bay

365500

420

6

60.60%

QLD

Fortitude Valley

399000

460

6

70.00%

ACT

Turner

435000

500

6

62.90%

WA

Perth

485150

550

5.9

60.80%

NSW

Haymarket

638000

730

5.9

63.30%

QLD

West End

260000

290

5.8

59.10%

QLD

South Brisbane

470000

505

5.6

64.20%

WA

West Perth

513250

550

5.6

62.70%

NSW

Westmead

375000

400

5.5

61.50%

ACT

Phillip

438000

460

5.5

58.80%

WA

Northbridge

450000

475

5.5

69.30%

QLD

North Ward

310000

320

5.4

60.70%

NT

Darwin

460000

475

5.4

67.40%

ACT

Kingston

480000

500

5.4

63.50%

NSW

Parramatta

380000

390

5.3

61.60%

NSW

Surry Hills

509000

520

5.3

62.00%

WA

East Perth

491000

500

5.3

60.10%

NSW

The Entrance

320000

320

5.2

63.30%

NSW

Chippendale

458000

460

5.2

68.30%

QLD

Kangaroo Point

435000

430

5.1

59.90%

QLD

Kelvin Grove

468250

460

5.1

60.30%

VIC

West Melbourne

500000

493

5.1

58.80%

TAS

Hobart

510000

500

5.1

62.10%

NSW

Pyrmont

663500

650

5.1

60.70%

NSW

North Wollongong

342500

320

4.9

60.40%

NSW

St Leonards

530000

500

4.9

59.70%

SA

New Port

400000

368

4.8

69.10%

NSW

Potts Point

458000

420

4.8

63.10%

NSW

Kirribilli

645500

600

4.8

65.00%

NSW

Bondi Beach

650100

600

4.8

60.10%

NSW

Macquarie Park

465000

420

4.7

63.10%

NSW

Darlinghurst

552750

500

4.7

60.00%

VIC

Docklands

605000

550

4.7

61.50%

VIC

St Kilda

444550

360

4.2

62.50%

QLD

Milton

487750

385

4.1

63.60%

VIC

South Yarra

535000

400

3.9

60.80%

WA

Crawley

611000

450

3.8

63.00%

ACT

ACT City

NA

NA

NA

69.70%

NSW

Meadowbank

NA

NA

NA

61.10%

NSW

Darlington

NA

400

NA

59.20%

 

Source: RP Data/ABS


Alistair Walsh

Alistair Walsh

Deutsche Welle online reporter

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