Best areas to rentvest in Australia 2018

Written by

Published on Oct 14, 2018 - Last updated on Dec 17, 2019

As property prices in the capitals remain at a rather high price tag, buying a home to call your own in the city you live has quickly turned into a challenging dream to realise for most aspiring homeowners. With 60 per cent of Australians wanting to own their own home, the idea of rentvesting is fast becoming the Gen Y’s solution to the housing crisis.

Forward thinking Aussie millennials are turning to investment property to get a foothold on the property market, while remaining at home with their parents or renting in share houses or studio apartments. Rentvestors make up roughly 8% of homeowners, and the trend is here to stay.

Before you jump the gun and invest willy-nilly, make sure you learn the key factors of how to invest in property so you can identify areas of potential growth that are affordable and will make you a good ROI. The following hotspots we have selected throughout Australia all have median house prices under $600,000.

Best areas in NSW to rentvest

Sydney

When it comes to affordable investment properties, Sydney may feel like slim-pickings. However, there are still accessible entry points across Sydney’s west, particularly a little further afield, where there is still excellent growth.

Penrith has an annual growth of 12.3% and strong rental yields, and sits on the doorstep of the Blue Mountains, offering an enticing lifestyle. Wrapped up with good infrastructure and public transport, Penrith makes an easy choice when buying a studio for rent.

Penrith:

Median unit price: $510,000
Average deposit: $102,000
Vacancy rate: 3.81%
Annual growth: 12.3%
Rental yield: 3.9%

Regional NSW

Newcastle has a wide variety of choice for the savvy rentvestor. With entry level houses on the market for well under $600k and a booming population, it’s an attractive and safe bet.

A wispy vacancy rate and decent rental yields makes Cardiff a win-win on the investment scale. You can enjoy solid rental returns while the property value increases. Just 12 kilometres from the city, it’s popular among young families, has good schools and is close to major shopping centres. It’s also home to a major train station and is a 15 minute ride to the city.

"Just 12 kilometres from the city, it's popular among young families, has good schools and is close to major shopping centres."

Cardiff:

Median house price: $494,000
Average deposit: $98,800
Vacancy rate: 1.52%
Annual growth: 7.1%
Rental yield: 4.1%

Best areas in VIC to rentvest

Melbourne

Similar to Sydney, the property market in Melbourne is out of reach for many first home buyers. The outer western suburbs and northern suburbs, however, still offer a lot of potential to rentvest.

Broadmeadows is slowly ditching its bad reputation as a new demographic rolls in due to its affordability and access to shops and transport, which makes now a good time to invest. Conveniently located just 16 kilometres away from the city with big blocks of land, Broadmeadows has experienced a combined growth of 62.5% over the past five years, and with a low vacancy rate, an investment property in the area will likely see solid returns.

Broadmeadows:

Median house price: $577,000
Average deposit: $115,400
Vacancy rate: 1.04%
Annual growth: 12.5%
Rental yield: 3.1%

Regional VIC

Geelong is quickly overtaking Hobart as the hottest property market in the country as it continues to see strong price growth, loads of development and a growing population supported by a bustling local economy.

North Geelong’s tight vacancy rate and high annual growth combined with its close proximity to the city is garnering the suburb a lot of attention as it loses its working class vibe.

North Geelong:

Median house price: $482,000
Average deposit: $96,400
Vacancy rate: 1.26%
Annual growth: 12.3%
Rental yield: 3.5%

Best areas in QLD to rentvest

Brisbane

With its oversupply of apartments, it makes sense to shop around for an investment house in Brissie. As far as investment property goes in the Brisbane region, Acacia Ridge ticks quite a few of the boxes. It’s 16 kilometres from the city, close to all the amenities of Sunnybank, and is a friendly suburb with access to parklands.

Acacia Ridge:

Median house price: $405,000
Average deposit: $81,000
Vacancy rate: 2.29%
Annual growth: 5.8%
Rental yield: 4.5%

Regional QLD

The Sunshine Coast has plentiful opportunities for rentvestors. The suburb of Tewantin is located on the Noosa River, offering an idyllic lifestyle. Consistently rating highly as a growth suburb, it still has tight vacancy rates, affordable entry point homes and solid annual growth.

"The suburb of Tewantin is located on the Noosa River, offering an idyllic lifestyle."

Tewantin:

Median house price: $590,000
Average deposit: $118,000
Vacancy rate: 1.2%
Annual growth: 7.2%
Rental yield: 4.4%

Best areas in TAS to rentvest

Hobart

Hobart has been wearing its crown proudly for the past few years as the nation’s best performing capital. Even as the combined market cools, Hobart is still enjoying excellent growth and solid returns.

The picturesque suburb of Lutana, just north of the CBD, offers exceptional value with a wafer thin vacancy rate. The median house price is under $400,000 and the rental yields are high. With water or mountain views available to all, Lutana is well connected and in a safe neighbourhood.

"Even as the combined market cools, Hobart is still enjoying excellent growth and solid returns."

Lutana:

Median house price: $395,000
Average deposit: $79,000
Vacancy rate: 0.35%
Annual growth: 10.5%
Rental yield: 4.9%

Best areas in WA to rentvest

Perth

Lagging behind the rest of the capitals, Perth’s market isn’t seeing a lot of growth. However, a few opportunities still exist for investment properties under $600k. Bibra Lake is 18 kilometres south of the CBD, and close to the hubbub of Fremantle. A slim vacancy rate and a positive (albeit low) growth rate combine to make it a good investment in Perth.

Bibra Lake:

Median house price: $528,000
Average deposit: $105,600
Vacancy rate: 0.69%
Annual growth: 0.3%
Rental yield: 3.8%

Best areas in SA to rentvest

Adelaide

On the banks of the Port Adelaide River, 13 kilometres from the city, sits the suburb of Birkenhead. Tight vacancy rates, an affordable entry point and near to the lovely Semaphore Beach makes it an ideal investment opportunity. Stock is tight, so move quickly if you’re interested in this area.

"Tight vacancy rates, an affordable entry point and near to the lovely Semaphore Beach makes it an ideal investment opportunity."

Birkenhead:

Median house price: $399,000
Average deposit: $79,800
Vacancy rate: 1.12%
Annual growth: 4.2%
Rental yield: 4.7%

Read: Ultimate beginner's guide to property investment strategy

Best areas in NT to rentvest

Darwin

Darwin’s market continues to underperform with median house prices dropping substantially in recent years. However, rents are still higher than in other capitals creating the opportunity to make some decent cash.

Karama has an above average rental yield of 6% and with a median house price below $400k, it will make you rethink investing in the NT.

Karama:

Median house price: $370,000
Average deposit: $74,000
Vacancy rate: 1.62%
Annual growth: -6.8%
Rental yield: 6%
Best areas in ACT to rentvest

Best areas in ACT to rentvest

Canberra

With a strong labour market, solid population growth, and lots of planned infrastructure, Canberra cannot be overlooked. The Belconnen suburb of Macgregor is an affordable hotspot in the area with a vacancy rate as thin as air, high rental yields and a 22.4% growth over the past five years.

"With a strong labour market, solid population growth, and lots of planned infrastructure, Canberra cannot be overlooked."

Macgregor:

Median house price: $513,000
Average deposit: $102,600
Vacancy rate: 0.31%
Annual growth: 4.1%
Rental Yield: 4.7%

Read: Hidden costs of buying a house

Who's the right agent for you?