Mortgage lender unveils 30 'best' rentvesting markets

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on September 30, 2021
Mortgage lender unveils 30 'best' rentvesting markets

Well Home Loans has revealed Australia's best rentvesting markets right now.

The concept of rentvesting has gained momentum recently with house prices surging and many not wanting to sacrifice location and lifestyle just to break into the property market. 

Rentvesting is the process of buying and renting out an investment property while living in a rental property yourself.

The idea is you get your foot on the property ladder, while living in a suburb that suits your wants and needs.

Data from research firm Suburbtrends has identified the areas around Australia offering growth potential and good cashflow for a budget of between $600,000 to $800,000. 

Additionally, the report has identified the inner city areas where renting is affordable due to higher vacancy rates. 

The suburbs below rank as the top 30 for investors looking to rent inner city, and buy in a high growth region according to Well Home Loans. 

10 suburbs to buy with a budget of $500,000-$600,000

Rank State Area Median Yield for Houses Median Vacancy Rate for Houses Median sale price range for houses
1 QLD Cairns-North 5.2% 5.0% $425k to $825k
2 WA Augusta-Margaret River-Busselton 4.9% 3.6% $400k to $585k
3 QLD Cleveland-Stradbroke 4.5% 6.8% $600k to $780k
4 NT Litchfield 4.4% 4.7% $600k to $740k
5 QLD North Lakes 4.4% 7.1% $475k to $620k
6 SA Port Adelaide - East 4.4% 8.2% $450k to $590k
7 WA Cockburn 4.4% 9.3% $430k to $700k
8 NSW Orange 4.3% 3.8% $387k to $540k
9 QLD Capalaba 4.3% 5.2% $545k to $720k
10 QLD Redcliffe 4.3% 7.0% $490k to $735k

Source: Suburbtrends, Well Home Loans

10 suburbs to buy with a budget of $600,000-$700,000

Rank State Area Median Yield for Houses Median Vacancy Rate for Houses Median sale price range for houses
1 QLD Nerang 4.2% 2.8% $550k to $770k
2 QLD Nambour 4.2% 2.9% $495k to $910k
3 NSW Port Macquarie 4.2% 3.9% $490k to $750k
4 QLD Bald Hills- Everton Park 4.2% 5.5% $560k to $852k
5 NSW Coffs Harbour 4.2% 5.2% $470k to $945k
6 WA Joondalup 4.1% 7.0% $485k to $865k
7 TAS Hobart - North East 4.1% 7.5% $370k to $785k
8 QLD Ormeau - Oxenford 4.0% 4.4% $545k to $915k
9 QLD Sunshine Coast Hinterland 3.9% 3.5% $571k to $880k
10 QLD Nundah 3.8% 8.5% $600k to $826k

Source: Suburbtrends, Well Home Loans

10 suburbs to buy with a budget of $700,000-$800,000

Rank State Area Median Yield for Houses Median Vacancy Rate for Houses Median sale price range for houses
1 QLD Southport 4.2% 9.5% $675k to $720k
2 NSW Queanbeyan 4.1% 3.0% $630k to $890k 
3 QLD Buderim 4.0% 5.9% $600k to $830k
4 ACT Tuggeranong 4.0% 5.5% $675k to $807k
5 ACT Belconnen 3.8% 7.5% $670k to $965k
6 QLD Wynnum - Manly 3.8% 6.9% $630k to $855k
7 QLD The Gap-Enoggera 3.7% 9.1% $645k to $830k
8 QLD Caloundra 3.7% 6.3% $515k to $920k
9 QLD The Hills District 3.7% 2.6% $600k to $830k
10 QLD Gold Coast - North 3.6% 5.5% $520k to $900k

Source: Suburbtrends, Well Home Loans

Why are those areas regarded as locations to consider buying a house?

These are areas where upwards pressure is being placed on weekly rents and property prices.

The criteria focusses on three data points:

  • Vacancy rates are below 1.5%
  • Rental yields are above 3.5%
  • Inventory levels are less than five months

Inventory levels refers to how long it would take for all inventory to be sold, provided no more dwellings are added to the market.

These factors mean rentvestors have an opportunity to rent out their investment property whilst it gains capital value.

The report also highlights where rentvesters may look to live themselves while they rent out their property. 

Where is it better to rent than buy?

The report also identified areas where downward pressure is being placed on weekly rent and property prices. 

The report focused on three main data points to identify these rental markets:

  • Vacancy rates are above 1%
  • Yields are below 5%
  • Over the previous 10 years, median prices for units have grown at less than half the rate of houses.

NSW

  • Parramatta
  • Canterbury
  • Blacktown
  • Newcastle
  • Tweed Valley

VIC

  • Melbourne City
  • Essendon
  • Brunswick
  • Casey-North
  • Stonnington-West

QLD

  • Brisbane Inner-East
  • Broadbeach-Burleigh

WA

  • Fremantle
  • South Perth
  • Melville
  • Cottesloe-Claremont

ACT 

  • South Canberra

TAS

  • Hobart Inner

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Aaron joined Savings.com.au in 2021. He is a finance journalist with a keen interest in property, the share market, and improving financial literacy in young Australians.

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