NSW’s top 10 suburbs for rentvestors to purchase property

Coastal and regional towns with tightly-held markets and rising property prices are among NSW’s most valuable assets for would-be investors.

Sam Murden

2 min read

September 27, 2022 - 2:35PM

Buyers looking to purchase an investment property or enter into the market for the first time are being encouraged to look at suburbs where supply and vacancy rates are low.

New research by Well Money has shown first home buyers would be better off buying high-growth investment houses in predominantly regional locations, rather than the suburbs of capital cities.

First-home buyers with a budget of $500,000 to $800,000 are struggling to buy homes in Sydney due to rising interest rates reducing their borrowing capacity, according to the report.

The Port Stephens and Mid-Coast town of Karuah is the best place to rentvest, with properties like 16 Round Hill Crescent (pictured) available for $540,000.

This is where the appeal of rentvesting comes in – a buyer can purchase an investment property in a more affordable suburb and then rent a property where they want to live.

The report identified 30 rentvesting markets where a house both fits the $500,000 to $800,000 budget and had potential for long-term growth potential and cash flow.

Of the top 10 suburbs that a first-home buyer could afford with a budget of up to $600,000 across the country, three were available in NSW.

Well Money CEO Scott Spencer.

The Port Stephens and Mid-Coast town of Karuah was ranked the most affordable for this category, with a median sale price of $562,500 for houses and a 4.4 per cent yield.

Other suburbs that fit into the $500,000 range included Bega with a $582,000 median sale price and Woodberry with $550,000 and a 3.7 per cent yield.

Well Money CEO Scott Spencer said these suburbs were considered worthy of being places to buy a home as they were experiencing upward pressure on weekly rents and house prices.

The median house prices of homes in the $500,000 range had recorded an average of at least a 5 per cent growth per annum over the last five years.
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Median house prices of homes in the $500,000 range had recorded an average of a 5 per cent growth per annum.

“First home buyers who live in capital cities and have a budget of $500,000 to $800,000 have a tough choice to make,” Mr Spencer said.

“Rentvesting can be a great choice for some first-home buyers, because it can give you the best of both worlds.”

“In the future, if the investment property grows in value, they could potentially sell it and use the money to buy an owner-occupied house in a desirable suburb in their current city.”

As a buyer’s budget increases, the number of options for homes to rentvest also grows.

With a budget of up to $800,000, a NSW buyer would be able to afford houses in suburbs like Medowie, Macquarie Hills, Maryland, Mount Hutton and Blue Haven.

Macqurie Hills was the most expensive suburb to rentvest, with homes like 27 Kenley Crescent on sale for $870,000.

Macquarie Hills is the most expensive suburb on the list, with a median sale price of $85,000 and a 4 per cent yield.

While it is unlikely that a significant number of new homes would be built in the suburbs over the next few years, Mr Spencer warns buyers not to spend more than their borrowing capacity.

“It would be important to take a long-term view with any investment purchase.”

“Many markets around Australia are softening right now, so prices might have further to fall before we potentially enter the next growth cycle.”