Real estate: 2022’s best investment suburbs on the Central Coast revealed

After two years of unconstrained growth, the steam is starting to come out of the coast’s property market. But there’s still some ripe pockets for savvy investors to cash in on according to new data.

The top 10 investment suburbs for both units and houses have been revealed with new data showing where the smart money will be in 2022.

CoreLogic property and rental values data, compiled exclusively for the Express Advocate, shows the coast’s northern growth suburbs of Blue Haven, Watanobbi and Hamlyn Terrace are the pick for savvy investors in the housing sector with annual property growth rates of more than 30 per cent and rental yields of more than 3.5 per cent.

Meanwhile Berkeley Vale, West Gosford and Gosford are the top investment suburbs for units where gross rental yields are closing in on five per cent over the past 12 months.

CoreLogic research director Tim Lawless said units have typically returned higher gross rental yields compared to houses because of the lower buy in price relative to rental rates.

Units have produced greater rental yields but lower capital gains than houses. Picture: file.

However Mr Lawless said the trade-off was units had generally shown a lower rate of capital growth over the medium to long term compared with houses.

Mr Lawless said the question then for property investors was whether they were buying for capital gain or rental return — or a combination of both.

“Anecdotally, most investors seem to base their decision on the prospects for capital gain rather than a high rental yield,” he said.

“Houses have generally shown a higher medium to long term growth rate than units. The 2021 calendar year saw Central Coast unit values increase by 24.4 per cent compared with a 35.3 per cent gain in house values.”

CoreLogic Research Director Tim Lawless said house prices increased more than unit prices.

Mr Lawless said the value of units had not recorded the same level of growth as houses, which probably reflected the “worsening affordability” across the rental market where renters do not have the benefit of being able to access credit, whereas home buyers could borrow more to purchase a more expensive house.

Similarly Mr Lawless despite low rental vacancy rates, landlords have not been able to increase rents in line with property values because of low levels of income growth and a “ceiling” in what renters were able to pay.

However Mr Lawless said given rental vacancies were expected to remain low across the Central Coast this year, rental prices could face more upward pressure as renters sought out “lifestyle opportunities within a reasonable commuting distance of the city”.

He said the relaxing of international borders to short and long term migrants would also lead to higher rental demand around the inner city markets, which could trickle out to regional and coastal markets and “migration picks up”.

Rents are expected to go up across the Central Coast. (File image)

TOP 10 INVESTMENT SUBURBS FOR HOUSES

Suburb	Median value	Annual growth	Median rent	Gross rental yield
Blue Haven	$737,362	35.5%	$528	3.64%
Watanobbi	$717,456	35.4%	$528	3.63%
Hamlyn Terrace	$911,273	31.3%	$616	3.55%
San Remo	$695,144	34.6%	$492	3.54%
Wadalba	$909,291	29.1%	$611	3.49%
Wyoming	$863,493	30.2%	$595	3.49%
Kariong	$946,232	22.2%	$657	3.46%
Lake Haven	$731,850	36.3%	$520	3.46%
Mannering Park	$718,413	31.8%	$503	3.45%
Woongarrah	$943,606	32.6%	$617	3.43%

Blue Haven topped the best suburbs to invest in on the Central Coast according to CoreLogic rental yield date. Picture: NSW real estate.

TOP 10 INVESTMENT SUBURBS FOR UNITS

Suburb	Median value	Annual growth	Median rent	Gross rental yield
Berkeley Vale	$424,087	29.2%	$394	4.63%
West Gosford	$576,645	16.7%	$486	4.46%
Gosford	$566,165	19.3%	$472	4.40%
North Gosford	$583,118	24.2%	$475	4.38%
Gorokan	$487,615	24.3%	$409	4.35%
Narara	$610,808	23.7%	$485	4.27%
Hamlyn Terrace	$672,065	25.0%	$508	4.22%
Point Frederick	$618,828	24.2%	$464	4.08%
Toukley	$513,052	21.0%	$404	4.01%
Kincumber	$660,136	19.4%	$472	3.98%