Investment Hotspots in Australia

New data from PropTrack highlights investment hotspots across Australia with strong rental yields and long-term price growth. Despite high interest rates, some suburbs offer enough rental income to cover mortgage repayments for certain buyers.

High rental yields suggest good investment potential, particularly for cash flow-focused investors. However, areas with lower yields but high growth can also be attractive for capital appreciation.

Australia's rental crisis, driven by a housing shortage, has led to a 36% increase in investor lending compared to last year. This surge is particularly notable in Queensland, South Australia, and Western Australia, which have tight rental and robust housing markets. Recently, rental yields have reached the highest levels in almost four years due to faster rent growth compared to property prices. Increased investor activity is expected to ease rental market constraints and supply shortages.

Additionally, knowing which suburbs offer the best returns can help renters who can't afford to buy in their desired area. They can 'rentvest'—rent where they want to live while buying investment properties in affordable, high-growth suburbs.

Suburbs with high rental yields are found across Australia, particularly in outer regions and regional areas.

In capital cities, Melbourne's outer northern suburbs like Wollert, Coolaroo, and Dallas; Canberra's suburbs like Phillip, Coombs, and Isabella Plains; and Sydney’s Central Coast suburbs such as Killarney Vale and Blue Haven offer house yields above 4%.

Adelaide’s northern suburbs like Elizabeth North and Smithfield Plains; Hobart’s outer suburbs including Gagebrook, Clarendon Vale, and Bridgewater; and Brisbane's Ipswich area like Laidley, Churchill, and North Booval have yields above 5%.

Perth’s outer suburbs like Hilbert and Medina have yields exceeding 6%. Darwin’s Palmerston area, including Moulden and Gray, has yields up to 7%.

For units, Sydney suburbs like Auburn and Lakemba, and Melbourne’s inner suburbs like Carlton, offer yields above 6%, with Caulfield East leading at 10%. Brisbane's CBD and Logan suburbs also have high unit yields. Regional areas, particularly larger towns and suburbs in major cities, provide strong returns for units.

Note: The potential investment opportunities mentioned are based on past performance and current data, which do not guarantee future results. Individual financial situations vary, and investment carries inherent risks, including market volatility and maintenance costs. It's important to conduct thorough research and consider professional financial advice before making investment decisions. Sources for the data and statistics should be checked and verified for accuracy.