Weekend Gold Coast Bulletin

Elizabeth Tilley

Queensland dominates a list of the 200 most lucrative areas to invest in property in the country, with landlords pocketing returns of up to $240,000 in just one year in some of the suburbs listed. Rockhampton, Townsville and Mackay have the best bang for your buck for both houses and units. Closer to Brisbane, Ipswich is the best place to invest, with East Ipswich, North Booval and Kilcoy star performers, according to exclusive data from PropTrack. The top-200 list of suburbs to invest in nationally is based on the latest figures for rental days on the market, rental yield and price growth over the past 12 months.

Topping the list for houses is the town of Spalding in Western Australia’s outback, where investors have made total gains of $128,864 over the past year. Rockhampton City is next, with capital growth of $97,500 in one year and a yield of $17,588 to equal a total return of $115,088 in the past 12 months. The gains for investors when it comes to units have been just as impressive, with the Townsville suburb of Hermit Park topping the national list with a $110,404 annual return. It boasts an incredible rental yield of 7.2 per cent and an affordable median unit price of $323,000 – despite growth of 41 per cent in the past 12 months.

The list is made up of mostly affordable suburbs that have consistently delivered solid returns and healthy rental yields every year for the past three decades. And analysts suggest continued demand and infrastructure-led population growth in these areas will keep upward pressure on property values and rental yields in the years ahead. “These areas have seen extraordinarily low rental vacancy rates for four years and commensurately very strong growth in rents over that period, so that continues to make them attractive to investors,” said PropTrack economics executive manager Angus Moore. “One caveat though is the regions of WA and Queensland that are mining areas. They can be quite volatile markets because they do depend on conditions in the mining sector, and that has historically seen some volatility.”

Townsville has become a standout market for investors. The median unit price in some suburbs has jumped more than 40 per cent in just the past year, while the median house price has increased by up to 35 per cent in some suburbs in 12 months, according to PropTrack. In the suburbs of Heatley and Vincent, the median house price is about $500,000, with price growth of more than 30 per cent in the past year and a strong rental yield of 6 per cent.

InvestorKit founder Arjun Paliwal foresaw the Townsville property boom in 2022 and personally invested in a number of properties, while also helping his clients find properties there. “We’ve seen huge returns and price performance since then,” Mr Paliwal said. “Townsville’s property boom was fuelled by a strong recovery from a long downturn, supported by a strengthening economy, large-scale defence and infrastructure investment, Covid-driven relocation trends, historically low interest rates and a strong rise in housing demand while established listings supply was limited.” Urbex Realty general manager Craig Covacich said Townsville’s property market was attracting a steady flow of first homebuyers, investors and interstate relocators.

“We’ve seen sustained momentum across Townsville’s property market, with stock levels shrinking faster than they can be replenished,” Mr Covacich said. “Townsville has become one of the most closely watched regional markets in the country due to its strong combination of affordability, rapid price growth, low vacancy rates and high rental yields. Despite these figures, relative affordability remains a key drawcard, especially for buyers priced out of major cities.”

Mr Moore said regional Queensland dominated the list because it had seen strong growth in rental yields and home prices since the pandemic. “Those, sort of, more affordable, more outlying areas have seen really strong growth on average since 2020, and that’s why they’re showing up in these sorts of lists,” he said. “We’ve also seen very strong demand for regional and outer suburban homes, both to rent and to buy, and that’s driven up rents a lot in those areas.” Mr Moore said strong home price growth tended to be a good indicator of a market that was performing well, but investors still needed to do their research. “Investors do need to go and dig in and understand the area and what’s been driving that, to figure out whether it’s going to continue, because locally specific factors are going to be very important, such as new builds, whether people are moving to the area from other states, big construction projects, changes in local labour markets and employers,” he said. Hotspotting director Terry Ryder said many regional Queensland suburbs had delivered gross yields above 6 per cent, while rents had surged in tandem with price growth.

“We’re seeing sustainable double-plays – value appreciation plus rental performance,” Mr Ryder said. “What stands out in our house market analysis is the sheer consistency of growth in regional and affordable areas because these are not one-off boom towns. They’re markets with real economic drivers, infrastructure investment and increasing buyer demand.” One caveat though, “is the regions of WA and Queensland that are mining areas. They can be quite volatile markets because they do depend on conditions in the mining sector, and that has historically seen some volatility.” Angus Moore.