Low yields for Bondi Beach house investors in RP Data top 50 most active rental suburbs list

Alistair WalshAugust 12, 20120 min read

Sydney's Bondi Beach has the highest median price – and one of the lowest yields for houses – among the most active rental suburbs across Australia.

It has a median house price of $1.4 million, and rentals reflect a yield of 3.7%, one of the lowest of the most active rental suburbs.

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 differentiation 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.

Bondi Beach had some 60.1% of its dwellings rented out, with the bulk being units which typically reflected a 4.8% yield.

Houses, especially freestanding ones, are getting rarer at Bondi Beach, in part because of redevelopment and the high land tax that investors are required to pay. The median house yield is $1,000 per week. 

A single-storey three-bedroom two-bathroom house on 183 square metres of land is currently listed for rent at $3,000 per week through Natalie Sassoon of Laing + Simmons. RP Data shows it last sold for $955,000 in 2007.  

A four-bedroom house (pictured below) on 228 square metres that recently sold for $2.75 million through the principal of Raine & Horne Double Bay, Ric Serrao, is listed for rent at $1,900 per week. This gives a yield of 3.59%. 

Serrao says yields in that range are about normal for the suburb but they are somewhat offset by capital gains which he thinks will accelarate in a few years.

"I think it’s an average yield. In the earstern suburbs if you’re getting over 4 % in residential you’re probably doing well."

"Especially at Bondi where we have exciting redevelopments with the old hotelier club which is now  being redeveloped and the Boheme devlopment in Hall Street with a lot of new shops opening up.

"Also with the Swiss Grand redevelopment there’s a lot of new shops and new eateries so I think the lifestyle is improving month on end.

"I beleive in three years when these developments are completed, Bondi will experience a surge. I would think it would probably have an annual rate of 5% to 7% each year in three years' time."

He says the proximity of the suburb to the beach is what attracts renters to the area, but he says more owner occupiers are buying.

"The closer to the beach the higher the demand. With properties like the  the Swiss Grand closing down it will put pressure on rents."

"In my opinion now it's more owner occupiers buying. It's more often a local person upgrading when the family has gotten larger."

 


Westcourt in Queensland is the suburb with the highest yields for houses on the list of the top rental suburbs. The suburb earns a yield of 5.6% for houses, according to RP Data figures. It also had the highest yield for units.

In Westcourt 62.4% of homes are rented and the median price for houses is $295,000 – the lowest median price in the list. The median rental for Westcourt houses is $320 per week.

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

Westcourt is followed by Melbourne and Hobart at 4.9%, and Gosford in NSW and West End in Queensland at 4.8%. 

The yields for houses in the list range from 3% in North Wollongong, NSW, and South Brisbane up to 5.6% in Westcourt.

Median house prices range from $295,000 in Westcourt, Queensland, to $1.4 million in Bondi Beach, NSW.

Bondi Beach has a yield of 3.7% for houses, with 60.1% of homes rented. 

State

Suburb

Median
Price ($)

Median Rent
($ per week)

Yield
(%)

% of
homes
rented

QLD

Westcourt

295,000

320

5.6

62.40%

VIC

Melbourne

485,000

460

4.9

63.10%

TAS

Hobart

407,000

380

4.9

62.10%

NSW

Gosford

385,500

355

4.8

67.60%

QLD

West End

355,000

330

4.8

59.10%

QLD

Cairns North

347,500

300

4.5

66.80%

NSW

Ultimo

792,500

650

4.3

67.60%

NSW

The
Entrance

391,000

320

4.3

63.30%

QLD

Rosslea

375,000

305

4.2

62.80%

NSW

Pyrmont

800,000

650

4.2

60.70%

QLD

Kelvin
Grove

581,500

475

4.2

60.30%

NSW

Chippendale

792,500

620

4.1

68.30%

NSW

Harris Park

552,000

440

4.1

66.30%

NSW

Surry Hills

900,000

718

4.1

62.00%

NSW

Parramatta

575,000

450

4.1

61.60%

WA

Perth

700,000

550

4.1

60.80%

QLD

Milton

649,500

495

4

63.60%

NSW

Darlinghurst

915,000

680

3.9

60.00%

NSW

Bondi
Beach

1,400,000

1,000

3.7

60.10%

VIC

St Kilda

1,300,250

900

3.6

62.50%

NSW

Westmead

635,000

440

3.6

61.50%

QLD

Kangaroo
Point

675,000

465

3.6

59.90%

QLD

Spring Hill

770,000

498

3.4

67.70%

ACT

Turner

852,500

550

3.4

62.90%

NSW

St Leonards

1,302,500

848

3.4

59.70%

WA

West Perth

752,500

480

3.3

62.70%

VIC

South Yarra

990,000

635

3.3

60.80%

QLD

North Ward

570,000

360

3.3

60.70%

VIC

West
Melbourne

860,000

520

3.1

58.80%

QLD

South
Brisbane

725,000

425

3

64.20%

NSW

North
Wollongong

820,000

478

3

60.40%

QLD

Fortitude Valley

520

70.00%

NSW

Kirribilli

1,075

65.00%

NSW

Sydney

900

63.50%

NSW

Potts Point

458

63.10%

VIC

Docklands

1,300

61.50%

NT

Larrakeyah

773

59.10%

 

Source: RP Data/ABS

Alistair Walsh

Deutsche Welle online reporter
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