Outer city regions present the best opportunities for property investment
OUTER Perth suburbs Seville Grove and Secret Harbour are tipped to enjoy 10 per cent growth per year for the next five years.
WHILE inner city properties may be popular with renters, new research has revealed some of the outer suburbs offer better long term returns for investors.
The analysis by Onthehouse.com.au predicts the suburbs expected to have growth of 10 per cent or more every year for the next five years.
New South Wales suburbs dominated the list with four suburbs in that state making in into the top ten.
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THE SUBURBS WITH THE HIGHEST RENTS
The area predicted to perform the best nationally is Jerrabomberra, a suburb of Queanbeyan in south eastern New South Wales.
According to the research it currently has a median house value of $612,500, the median rent is $605 a week and growth during the next five years is expected to be more than 10 per cent a year.
Close behind is Morayfield in Queensland which is also predicted to grow by more than 10 per cent a year during the next five years.
Morayfield is about 44km north of the Brisbane CBD. The median value in the suburb is a much more affordable $321,000.
The first entry into the list for Western Australia is Seville Grove, an outer suburb of Perth. The area has a median house value of $367,500 and values are also expected to increase by more than 10 per cent a year for the next five years.
The ACT is the only other state or territory to have an entry in the top ten, with Ngunnawal, about 13km from the Canberra CBD, predicted to have strong growth in values for the next five years.
Victoria, South Australia and the Northern Territory did not have any suburbs within the top ten list.
Analyst John Edwards says the forecast shows that outer city regions provide the best investment opportunities in terms of rental and capital returns.
He says buying in a regional area might not be enticing for everyone, but when you look at the figures it is an option some should consider.
He says the common thread is the top ten suburbs all have affordable medians.
“It is really just about affordability,’’ he says.
“If you look at that list you will notice everything is relatively inexpensive.’’
Mr Edwards says they analyse historical date to work out which areas are likely to perform well in the coming years.
“With more expensive areas, such as Sydney, outer city regions can be much more affordable — pair that with strong growth and it could be a good fit for investors wanting to get good rental returns and capital growth over time.”
He says investors should look for areas which have good employment opportunities, education options, transport and planned developments.
This will help lead to population growth and more demand for property.
The forecast is calculated using rental yields and five-year capital growth predictions. Confidence ratings and employment opportunities are also taken into consideration.
The top ten suburbs for investors returns in Australia:
Jerrabomberra — NSW — 10% +
Morayfield — QLD — 10% +
Seville Grove — WA — 10% +
Karabar — NSW — 10% +
Dalyellup — WA — 10% +
Ngunnawal — ACT — 10% +
Secret Harbour — WA 10% +
Murrumba Downs — QLD — 9%+
Banora Point — NSW — 9% +
Medowie — NSW — 9% +
Source: Onthehouse.com.au