Hot properties: SA’s top suburbs for rental returns

Adelaide has one of the tightest rental markets in Australia, making it a hot spot for investors. See the list of SA’s top suburbs and towns that offer the best rental returns.

Looking for a high-performing rental?

Well, in South Australia that means seeking out a property in our further flung regions, where affordability and a strong jobs market are delivering strong returns for investors.

According to Ray White data, Roxby Downs units were the state’s top performers, with a median-priced $151,000 property delivering a 10.68 per cent return.

Port Pirie houses were the next best performers, where investors can expect to see a 9.51 per cent yield on a $175,000 purchase.

Peterborough, Solomontown, Whyalla Norrie, Port Augusta, Risdon Park and Whyalla Stuart houses all delivered rental yields of more than 7.21 per cent.

Those hoping for winning returns in metropolitan Adelaide should opt for units, with the often more affordable housing option returning the highest rental yields.

Bedford Park units are the best-performing option in metropolitan Adelaide, with median-priced properties in the southern suburb delivering a rental return of 6.98 per cent from their $298,000 purchase price.

Smallacombe property manager and sales consultant Ros Munt, who is currently selling a house in 13 Milton St in Bedford Park (houses here deliver a median rental yield of 4.37 per cent) said the suburb offered an affordable option close to great amenities.

“The increase in size and accessibility of the university and hospital are the most obvious attractions there, and the buy in the area is quite affordable – it’s a little pocket that investors don’t really think about,” she said.

Selling agent and property manager Ros Munt in Bedford Park – where units are returning the highest yields in SA. Picture: Naomi Jellicoe

“Across the board, rental yields are more important than they have been, simply because until recent years rental yields have always been low compared to commercial properties here and residential properties interstate.

“Here, despite prices increases, yields have held and in many instances increased.”

Ms Munt said while the market was still performing well it had slowed slightly in recent months.

“Under about $800 a week it is still competitive but over that it is slower,” she said.

In terms of other high-performing metropolitan investment options, units in St Marys, Walkerville, Tonsley, Adelaide, New Port, Hawthorn and Lightsview all delivered yields of more than 6.15 per cent.

Investors chasing substantial gains needn’t be bound to buying in just South Australia, with far greater returns to be found interstate.

The strongest-performing rentals are currently Malacoota houses in Victoria’s far eastern tip, where investors are getting returns of 17.93 per cent.

It is closely followed by Dolphin Heads units in Queensland with a yield of 17.02 per cent, and Baynton units in Western Australia which are returning a yield of 16.3 per cent.

Jemima White, Ray White data analyst. Supplied

Ray White data analyst Jemima White said while many of the country’s top-performing investments were in mining areas – including Roxby Downs – caution should be taken when investing there.

“Investments in these areas are risky, however, due to the volatility of the nearby mines that can often employ over 50 per cent of the rental population,” she said.

“Sharp unexpected drops in commodity prices could force these nearby mines to shut, shedding staff which would bring down rental demand, which occurred in 2017.”

She said unit rental yields had outperformed housing yields nationally over the past 12 months.

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