More than 30 locations across the country now have rental yields in excess of 10 per cent, with all but one of the states and territories offering the impressive returns.
Figures from CoreLogic RP Data show that every state and territory – except the Australian Capital Territory – now has suburbs offering double-digit returns, with results strongly skewed towards tourism towns.
The figures also reinforce reports concerning the tightening rental yields in Australia’s most populous and most expensive sales market, Sydney.
The top-performing suburbs in this set of results are locations that are susceptible to seasonal fluctuations, including the tourism-based economies of South Australia’s Port Vincent (first nationally with a yield of 19.16 per cent), Tasmania’s Bicheno (ranked second with a yield of 14.2 per cent) and the New South Wales town of Huskisson (fourth, with a recorded yield of 14.14 per cent).
Propertunity managing director Alan Fox recently explained to Which Investment Property the risk of basing investment decisions on results fielded in touring towns during peak season – focusing specifically on the New South Wales Central Coast town of Killcare (ranked third in NSW with a yield of 12.97 per cent).
“There are a number of holiday homes in Killcare that are advertised for rents of minimum $2,000 to $4,000 per week, and I strongly suspect these advertised rentals are skewing the rental yield figures,” Mr Fox said.
Not one of New South Wales’ top 10 suburbs was within Greater Sydney and, with the exception of Broken Hill, almost all of the highest-performing suburbs were on the state’s south and central coasts.
In total, New South Wales has nine suburbs offering rental yields above 10 per cent – the most of any other state or territory. These include: Huskisson (14.14 per cent), Mossy Point (13.25 per cent), Killcare (12.87 per cent), Manyana (11.4 per cent), Minnamurra (11.14 per cent), Broken Hill (11.02 per cent), Malua Bay (10.95 per cent), Rosedale (10.79 per cent) and Berrara (10.41 per cent).
The release of new lots and house-and-land packages in the newly established suburb of Zuccoli, 8km from Darwin’s CBD, resulted in that suburb recording a yield of 14.18 per cent for third spot in the Australian market.
Away from the coastal tourism markets, mining towns continued to place in the top ten performers of the resources states. Nowhere is this more apparent than in Western Australia, where the state’s top five suburbs are all reliant on the industry.
These suburbs were Withers (11.94 per cent), Kambalda West (10.82 per cent), Nickol (10.16 per cent), Port Hedland (9.48 per cent) and South Boulder (9.09 per cent).
The Australian Capital Territory was the only market with a first-ranked suburb returning a yield below 10 per cent. That’s a continuation of a long-term market trend – according to SQM Research, vacancy rates have been on a steady upward trajectory since 2012 with landlord competition increasing as a result.
Scullin was the ACT’s strongest performer with a quarterly rental yield of 7.83 per cent.