Suburbs that are hot
SEVEN Gold Coast suburbs have been earmarked as top picks for investors looking to sink their funds into Queensland’s hot property market.
Research by REA Group reveals units in Surfers Paradise, Southport, Biggera Waters, Coombabah, Carrara, Mudgeeraba and Nerang returned the biggest gains for investors.
The seven hotspots ranked highest based on a number of indicators, including annual rental yield and demand, as well as capital growth over 10 and 20 years.
Other indicators were investor cashflow, calculated as monthly rent minus mortgage repayments, and the number of sales in the suburb, compared with 2011 and 2001.
While each of the suburbs had rental yield of about 6 per cent, capital growth over 10 years ranged between 13.3 per cent for units in Surfers Paradise – where investor cashflow was $435.58, to 49.5 per cent in Mudgeeraba – which returned the highest monthly cashflow of $646.42.
Investors in these areas were also buoyed by a huge spike in demand for rental properties across the Coast on the back of the 2020-21 lifestyle shift to Queensland by hordes of interstate residents.
Carrara posted the strongest annual growth in rental demand of 26.2 per cent, followed by Biggera Waters at 19.8.
Southport’s rental demand increased by a more modest 7.7 per cent, with the CBD suburb hard hit by Covid-19’s exodus of international students. But the centrally located suburb still delivered a healthy investor cashflow of $596.18, with capital growth of 15.6 per cent.
REA economist Paul Ryan said unit investors achieving a rental yield above 5 per cent were “doing very well”.
“House prices have risen and that is pushing down rental yields. That doesn’t make houses a bad investment, they may just not be bringing in the same yields or cashflow.”
Mr Ryan said growth in rental demand for Coast units had been “outstanding”.
Adam Phillis, of Phillis Real Estate, said interstate buyers were eyeing investment properties across the Coast.
“Investors throughout Melbourne and Sydney view the Gold Coast as having extremely affordable property prices and thus they are snapping up investment properties,” he said.
Ray White Surfers Paradise director Andrew Bell said a surge in interstate migration had fuelled demand.
“Part of the reason investors are in the market again is the alternatives are not particularly attractive,” he said.
“By leaving your money in the bank you are getting less than 1 per cent; the stock market is seen to be at dizzying heights and people are thinking there could be a correction coming.”
“Right now, they can get positive yields rather than negative gearing, so to get an annual return and pick up on capital gains has made real estate attractive again for investors.”