Sydney, Melbourne and Brisbane are the three biggest investing hubs in Australia, however according to Core Logic, the city that is achieving the highest rental yields is Brisbane.
As at July 2016 Brisbane’s rental yields were sitting at 4.3% per annum, whilst Sydney and Melbourne were at 3.1% and 3.0% per annum.
This means, if you purchase an investment property at say $600,000 for example, you would receive the rental value of:
Brisbane: $496 rent p/w
Sydney: $358 rent p/w
Melbourne: $346 rent p/w
From the example above, you can see that Brisbane’s rental returns far out reach that of Sydney and Melbourne.
This is good news for those who are cash flow poor but asset rich because with interest rates sitting at around 4% it means people can buy an investment property in Brisbane and the rent would cover their mortgage. This is a great opportunity for people who do not have that extra cash to put into an investment property every year to make up the shortfall of the bank repayments like you would have to if you purchased an investment property in Sydney or Melbourne.
A question you may be asking now is ‘Yes that’s all well and good, but will a Brisbane investment property achieve good capital growth?’
Well, using stats and data gathered from various sources, if you look at suburbs we have recommended to our clients in Brisbane and remarking on the median capital growth for apartment developments only, then you can see:
See what other investment properties Calla Property Investors Recommend.
Windsor has been averaging a capital growth of 5.07% per year.
Coorparoo has been averaging a capital growth of 5.32% per year.
And Indooroopilly has been averaging a capital growth of 5.62% per year.
Can over 5% capital growth per year make you happy? Or in other words, the property you purchased for $600,000 would be likely to reach, based on these capital growth averages, a growth of approximately $31,200 per year.