Queensland, resources top rentals list

The list of Australia’s top 50 suburbs for rental yield show how the market varies between states and regions. The majority of top performers (68%) are outside capital city boundaries; just 16 of the top 50 are in capitals. Adelaide and Darwin are absent from the top 50.

Unsurprisingly, the majority of the regional areas on the list are resource-intensive areas; in most cases they are either major ports or areas known for resources activity. There are also a few smaller “sea change” areas.

Queensland had the greatest number of suburbs in the top 50: 17 individual suburbs, accounting for 34% of all entries. New South Wales, with 14 individual suburbs and Victoria with nine were also well represented.

Conversely, the Northern Territory had no entries, even though the city of Darwin has the nation’s best average gross rental yield. The Australian Capital Territory had just one entry and South Australia three.

In terms of regional areas, Central Queensland is the best represented area, with 10 of the top 50, six of these suburbs being mining and resource intensive areas.

The top 50 included 24 entries for houses and 26 for units, a fairly even split. Interestingly, within capital city areas there was a clear dominance of units, with only two suburbs recording a top 50 yield for houses. Conversely, mining areas are well and truly dominated by houses; Whyalla was the only top-yielding mining area which recorded units as the property type.

With value growth having slowed in most major markets, investor focus over the short to medium term will now be switching to rental returns, as rental increases catch up to the value growth of recent years. During 2008, rental yields have been improving in many areas by the month as rental shortages impact and owners increase rental rates.

We anticipate this trend of improving yields will help attract investors back to the market and will see those who already own investment properties reap the benefits of long-awaited rental return improvement, largely due to the recent slowdown in property value growth.

nTop 50 suburbs for rental yields (based on median price and median weekly rental (Jul-08)
Rank	Suburb	Local Government Area (LGA)	State	Property Type	No Sold	Median Price	Weekly Median Advertised Rent	Gross Rental Yield
1	BEACHMERE	CABOOLTURE	QLD	Unit	24	$119,000	$300	13.1%
2	PORT VINCENT	YORKE PENINSULA	SA	House	26	$308,050	$770	13.0%
3	CORAL COVE	BUNDABERG REGIONAL	QLD	Unit	11	$158,000	$370	12.2%
4	DOLPHIN HEADS	MACKAY REGIONAL	QLD	Unit	16	$177,000	$410	12.0%
5	DAMPIER	ROEBOURNE	WA	House	17	$835,000	$1,800	11.2%
6	THEODORE	BANANA	QLD	House	12	$138,750	$280	10.5%
7	SIPPY DOWNS	SUNSHINE COAST REGIONAL	QLD	Unit	43	$205,000	$395	10.0%
8	HAZELMERE	SWAN	WA	House	12	$532,500	$1,000	9.8%
9	MELBOURNE	MELBOURNE	VIC	House	12	$322,500	$600	9.7%
10	COLLINSVILLE	BOWEN	QLD	House	37	$220,000	$400	9.5%
11	DYSART	BROADSOUND	QLD	House	106	$334,000	$600	9.3%
12	MORANBAH	BELYANDO	QLD	House	208	$352,500	$600	8.9%
13	SOUTH HEDLAND	PORT HEDLAND	WA	House	68	$502,500	$850	8.8%
14	MURTOA	YARRIAMBIACK	VIC	House	19	$77,000	$130	8.8%
15	OUYEN	MILDURA	VIC	House	20	$86,000	$143	8.6%
16	MINYAMA	SUNSHINE COAST REGIONAL	QLD	Unit	36	$289,750	$475	8.5%
17	AIREYS INLET	SURF COAST	VIC	House	32	$523,500	$858	8.5%
18	YINNAR	LATROBE	VIC	House	11	$225,000	$360	8.3%
19	NEBO	NEBO	QLD	House	14	$345,000	$550	8.3%
20	NORTH ALBURY	ALBURY	NSW	Unit	15	$107,000	$170	8.3%
21	PORT KEMBLA	WOLLONGONG	NSW	Unit	10	$138,500	$220	8.3%
22	NORTH SHORE	GREATER GEELONG	VIC	Unit	13	$158,000	$250	8.2%
23	BUCASIA	MACKAY REGIONAL	QLD	Unit	17	$190,000	$300	8.2%
24	LAVERTON	HOBSONS BAY	VIC	Unit	15	$120,750	$190	8.2%
25	FORREST	CANBERRA CENTRAL	ACT	Unit	35	$480,000	$750	8.1%
26	THE ROCKS	CITY OF SYDNEY	NSW	Unit	32	$705,000	$1,100	8.1%
27	WOOLLOOMOOLOO	CITY OF SYDNEY	NSW	Unit	112	$420,000	$650	8.0%
28	CAPELLA	PEAK DOWNS	QLD	House	23	$260,000	$400	8.0%
29	PORT FAIRY	MOYNE	VIC	House	77	$325,000	$500	8.0%
30	LONGREACH	LONGREACH REGIONAL	QLD	House	66	$195,000	$295	7.9%
31	ADELONG	TUMUT	NSW	House	12	$180,000	$270	7.8%
32	KAMBALDA EAST	COOLGARDIE	WA	House	11	$180,000	$270	7.8%
33	GATTON	GATTON	QLD	Unit	22	$196,000	$290	7.7%
34	WERRIS CREEK	LIVERPOOL PLAINS	NSW	House	18	$108,500	$160	7.7%
35	ASQUITH	HORNSBY	NSW	Unit	34	$476,000	$699	7.6%
36	TANAH MERAH	LOGAN CITY	QLD	Unit	25	$247,000	$363	7.6%
37	STIRLING	STIRLING	WA	Unit	10	$460,000	$675	7.6%
38	CUMMINS	LOWER EYRE PENINSULA	SA	House	17	$147,500	$215	7.6%
39	HELENSVALE	GOLD COAST CITY	QLD	Unit	113	$357,000	$520	7.6%
40	ROSEHILL	PARRAMATTA	NSW	Unit	18	$275,000	$400	7.6%
41	WHYALLA	WHYALLA	SA	Unit	24	$159,500	$230	7.5%
42	BLAKEHURST	KOGARAH	NSW	Unit	14	$452,500	$650	7.5%
43	GARDEN SUBURB	NEWCASTLE	NSW	House	12	$300,750	$430	7.4%
44	BROOKWATER	IPSWICH	QLD	Unit	76	$315,000	$450	7.4%
45	CHIPPING NORTON	LIVERPOOL	NSW	Unit	36	$266,500	$380	7.4%
46	HARDEN	HARDEN	NSW	House	29	$110,000	$155	7.3%
47	KAMBALDA WEST	COOLGARDIE	WA	House	18	$242,000	$340	7.3%
48	AMBARVALE	CAMPBELLTOWN	NSW	Unit	19	$172,000	$240	7.3%
49	IRYMPLE	MILDURA	VIC	Unit	29	$165,000	$230	7.2%
50	LAKEMBA	CANTERBURY	NSW	Unit	204	$180,000	$250	7.2%

Source: RP Data

Tim Lawless is research director at RP Data.