Outer city and regional areas are providing the best value for investors with a $100,000 deposit, according to new research.
The Suburb Help $100k Investment Report has found the unit market in the outer-Melbourne suburb of Langwarrin is currently the most compelling investment market in the country, with a median price of $590,000.
The unit markets in Charlestown in NSW and Bellerive were considered the next best, while houses in Eden Hills in South Australia and Medowie in NSW rounded out the top five locations.
The research looked at property markets with a median price of less than $1,000,000, a large share of owner-occupier homes, tight vacancy rates and high rental yields.
Overall the research identified 20 locations spread around New South Wales (9), the ACT (6), South Australia (2), Victoria (2) and Tasmania (1), with a mix of both metro and regional locations.
The cheapest median price of just $590,000 in Langwarrin, potentially makes the suburb accessible for an investor with a deposit of just $59,000.
Suburb Help chief property strategist Veronica Morgan said it’s not easy to identify investment opportunities at the moment.
“It’s not easy to buy a property right now, for a couple of reasons,” Ms Morgan said.
“First, even though prices are declining in many parts of Australia, they’re still elevated following the recent boom.
“Second, investors’ borrowing power is declining with every Reserve Bank rate hike.”
Ms Morgan said with the help of Lender’s Mortgage Insurance (LMI) it’s still possible to find good opportunities with a lower deposit.
“So it’s good to know that if you find a lender prepared to accept a 10 per cent deposit, you can still buy into a good investment location for a relatively modest price, provided you do your research,” she said.
Ms Morgan said every location that had been identified in the report met a rigid criteria.
“We wanted locations that were not only likely to record above-average capital growth over the long-term but would also provide a healthy cash return right now,” she said.
“That’s why we limited ourselves to locations that had low vacancy rates and reasonable yields.
“As a result, if you buy a quality property in one of these locations, you should find it relatively easy to secure a reliable tenant prepared to pay a good rent.”