Rentvesting now accounts for one third of all Australian property investments, accounting for $202 billion on loan.
With Australian property prices rising by 618% over the past 30 years and national incomes failing to keep up, the rentvestment trend is gaining traction according to Mozo property expert Steve Jovcevski.
“The Australian housing market has undergone a period of dramatic change. Young people are finding it increasingly unattainable to purchase their own home. Rentvestment means metropolitan areas are now dotted with renting landlords who own properties miles away from where they reside,” says Jovcevski.
“The ease of living in a metropolitan city boasts advantages that many people can’t pass up. Ease of transportation, minimal commute, greater job opportunities and stellar education, healthcare and culture are just a few reasons people are having their cake and eating it too. They can enjoy the benefits of a big city while making savvy property investments that won’t break the bank.”
“The benefit of rentvesting is that you can cast aside any emotional ties that you would place upon a home you would live in and assess the viability of the property investment. There is also bonus of tax incentives, living in whatever location you want, and a lower level of debt.”
Considering factors such as vacancy rates, property price movement, house supply and yield, every suburb was assessed by Mozo for quality of investment.
Mozo’s top hotspots are:
|Suburb||Median House price (except Liverpool – unit)||Yield||Price movement in year to July 2017||Vacancy rate from 12 months prior||House Supply from 12 months prior|
|Madeley, WA, 6065||580k||4%||7.5% drop||1.1% down from 1.8%||38.7% drop|
|Tewatin, QLD, 4565||517K||4.7%||10% increase||1.2% down from 1.7%||31% drop|
|Scullin, ACT, 2614||540k||4.3%||10.4% increase||0.7 down from 1.4%||26.7% drop|
|Liverpool, NSW, 2170||448k||4.3%||4.2% increase||3.7% down from 3.9%||48.2% increase|
|Brooklyn Park, SA, 5032||504K||3.6%||2.8% increase||1.2% down from 1.7%||No change|
|Trevallyn, TAS, 7250||324K||5.2%||4.4% increase||1% down from 1.4%||29.2% drop|
|Sunbury, VIC, 3429||418k||4.4%||9.9% increase||0.9% down from 1%||46.9% drop|
A breakdown of Mozo’s top rentvestment suburbs:
Located only 20km north of Perth’s CDB, Madeley stuck out as a best buy for WA. With a 7.5% drop in value in the past year but incredibly low vacancy rates, this is an area that is set to increase in property value in the near future. Madeley has excellent amenities, is a 10 minute drive from the beach and is close to Swan Valley.
Tewatin has seen a drop in vacancy rates and housing stock in the past 12 months. It is home to many locals who own businesses or work in Noosa and local and international tourism continues to boom in the area. Located only five minutes walk from Noosa Marina, it is in a prime location while remaining affordable as an investment.
Located 15 minutes from central Canberra and close to Belconnen city, Scullin boasts excellent transport links and is surrounded by excellent amenities. A great place to raise a family, it is also located 10 minutes drive from the University of Canberra. Given Canberra is a city of government employees there is a consistent housing demand. With a median house price of 540k, house prices are high value for money.
Due to relative affordability of units and strong first home buyer interest as a result of changes to stamp duty, Liverpool has seen over a million dollars in stamp duty exemptions since the 1st of July 2017. House and unit prices are increasing and vacancy rates continue to track lower. Located 40km southwest of Sydney CBD, the suburb has excellent transport links and is located near the M5. In the longer term, property prices will increase due to the benefit of being close to a second airport and the job opportunities this will bring to the area. Additionally, Liverpool council’s proposals of a new marina and rejuvenation of Georges River may be something to look out for in the future.
Brooklyn Park, SA
Only five kilometres from the CBD and the beach, Brooklyn Park is close to the airport, Harbour Town Shopping Centre and Torens Linear Park which has a wonderful cycle and walking path from the city and to the sea. At $504k it is good value for money for investors and indications are, the suburb will experience significant property price growth. Neighbouring suburb Henley Beach South has already reached a median house price of $785k.
Trevallyn is walking distance to local amenities such as schools and shops and is only 3km from Launceston. Situated on a hill overlooking the Tamar River and the mountains it provides picturesque living. It also has access to the Gorge and is only a 45 min flight to Melbourne. The University of Tasmania is being relocated in Invermay which is only a few kilometres from Trevallyn which result in a higher rental demand and home purchasing. Investors may benefit from leasing properties to students in the near future.
Due to drop in vacancy rates and massive drop in housing stock, as well as continued first home buyer demand in the Melbourne market, we see Sunbury continuing to increase price in the next 12 months. Located 40kms from Melbourne CBD and 40 mins drive to inner-city off peak it is relatively close to Melbourne CBD considering the $400k price point. This is a great area for first home owners and investors looking for a growing area.