Warrnambool emerges, but Queensland's Gladstone still darling of top 50 investment list
The regional Victorian town of Warrnambool is one of only three locations to receive multiple votes in Smart Property Investment magazine’s 2012 list of 50 suburbs or towns with the most capital growth potential.
Out of the three towns that received multiple votes – the others being perennial hotspot list favourite Gladstone and nearby Rockhampton City, both in north Queensland – Warnambool is the only one not reliant on the resources boom for its high rating.
Multiple vote towns in the SPI Fast 50
Suburb | Number of expert picks | Distance from nearest major city | Population | Median house price | Median unit price | Gross yields |
Gladstone, Qld | 3 | 550 kms to Brisbane | 29,000 | $437,000 | $350,000 | 5%/7% |
Rockhampton City, Qld | 2 | 600 kms to Brisbane | 76,000 | $217,000 | $447,500 | 6%/5% |
Warrnambool, Vic | 2 | 265 kms from Melbourne | 33,000 | $316,000 | $255,000 | 6%/5% |
Source: SPI Fast 50
Situated on the Princes Highway, about 265 kilometres from Melbourne and near the western end of the Great Ocean Road, Warrnambool is one of only four Victorian locations to be included on this year’s list.
The town, which dates back to the gold rush in the 1840s, has strong ties to agriculture and the dairy industry, as well as tourism and construction. It has been picked by hotspotting.com.au director Terry Ryder and Todd Hunter, a former Aussie mortgage broker and director of research firm Wheregroup.
It has a median price of $316,000 for houses with gross rental yields of 6% and a $255,000 median price for units with gross rental yields of 5% – both well above the state median (according to Rismark-RP Data) of 3.7% for houses and 4.3% for units.
Ryder describes Warrnambool as “the leading centre of Victoria’s south west” and says it is “growing so fast that the local council has had to rezone hundreds of hectares of farming land for new industrial and residential estates”.
According to Ryder, Warrnambool’s strengths are “tourism, construction, education and medical services”.
“Retail is rapidly expanding and there is a plethora of new power generation facilities, including gas-fired power stations and major wind farms,” he says.
The town has a resident population of just under 34,000 but attracts more than 700,000 visitors each year who come to lie on its beaches in summer and to view southern right whales in the winter months.
Rockhampton, where the median house prices is still a very affordable $217,000 (units are far more expensive at $447,500), was selected by author and founder of Destiny Financial Solutions Margaret Lomas and Luke Berry from hotspot research firm NextHotSpot.
Lomas calls Rockhampton City a place to “buy now and wait for three to five years for some action” and highlights the current affordability of houses and yields of up to 7.5%.
“I see this area benefiting from the flow-on effect of Gladstone without the high risk that mining areas traditionally bring,” she says.
Berry notes that although the scale of investment in Rockhampton is smaller than in Gladstone, it is still significant, with the town containing several cheap areas such as Berserker (a median house price of around $240,000) that are “set to boom”.
Gladstone, which has appeared on just about every hotspot list in the past 12 months, is the only location to be selected by three of the seven experts on the SPI panel, picked by SQM research director Louis Christopher, Terry Ryder and Helen Collier-Kogtevs, managing director of property investment group Real Wealth Australia.
The town, which is at the epicentre of $75 billion worth of energy, rail and port projects, is expected to undergo significant growth over the next five years, according to Collier-Kogtevs.
“It is strategically important to the national economy, has average historical performance and great projected performance, low vacancy rates, higher per capita income levels and a shortage of and high demand for housing,” she says.
Overall NSW has the highest number of growth hotspots in the top 50 with 18, followed by Queensland with 11, Western Australia with 10 and South Australia with six.
Reflecting the declining fortunes of their respective markets, Victoria has just four suburbs in the top 50 and the ACT just one – the capital Canberra.
Other areas to shine in the survey include western Sydney, which received a high level of recommendations for suburbs including Blacktown, Goulburn, Liverpool, Seven Hills and Penrith.
The City of Onkaparinga, south of the Adelaide CBD, comprised three out of the six predicted hotspots for South Australia with Hackham, Aldinga Beach and Seaford all selected.
Suburbs were picked based on population growth, demand for housing, income levels, employment, vacancy rates, previous capital growth and current gross rental yields.