These are the Brisbane apartments achieving the highest capital growth and the best suburbs to buy an investment property.
THE best Brisbane suburbs to invest in property have been revealed, with potential goldmines waiting to be snapped up by savvy buyers.
A new report from Place Advisory has found the suburbs with the highest rental yields are mostly in the middle ring on the city’s southside, while those with the highest rental incomes are inner-city lifestyle locations.
Darra, in Brisbane’s west, tops the list, with a median house price of $350,500 and average weekly rent of $335.
Investors are set to pocket a five per cent yield on a three-bedroom house in this suburb.
Forest Lake, Ellen Grove and Kuraby are not far behind, with slightly more expensive median prices, but the same five per cent rental yield.
Place Estate Agents property management director Cathie Crampton said five per cent was a good rental yield in any market — and it was only set to increase.
“We will see now, I believe, movement toward six per cent (yields),” Ms Crampton said.
“But when you’re investing in those median ring suburbs, they’re median term holds.”
SUBURBS WITH THE HIGHEST YIELDS FOR 3-BED HOUSES
Suburb Median price Weekly rent Yield
1. Darra $350,500 $335 5%
2. Forest Lake, Ellen Grove $382,000 $365 5%
3. Kuraby $370,000 $355 5%
4. Durack, Richlands, Inala, Doolandella $365,000 $330 4.7%
5. Acacia Ridge, Willawong, Pallara,
Larapinta, Heathwood $395,000 $360 4.7%
The suburbs where investors are likely to pocket the highest rental income are in New Farm, where the weekly median rent is $650 for an average three-bedroom house, followed by Spring Hill, Petrie Terrace and Brisbane’s CBD with weekly rents of $600 on average.
Ms Crampton said weekly rents had been increasing at a rate of five to 10 per cent within 5km from the CBD.
“This will not dissipate,” Ms Crampton said.
“We will see more and more of that because people need to live closer to their places of work and it’s about their lifestyle choices.”
Ms Crampton said investors could expect capital gains of between 10 and 20 per cent in a shorter timeframe if they bought in an inner-city location.
SUBURBS WITH THE HIGHEST WEEKLY RENTS FOR 3-BED HOUSES
Suburb Median price Weekly rent Yield
1. New Farm $1.37m $650 2.5%
2. Spring Hill, Petrie Terrace, CBD $862,500 $600 3.6%
3. Paddington, Milton $925,000 $600 3.4%
4. Red Hill, Kelvin Grove $812,500 $565 3.6%
5. Auchenflower, Toowong $800,000 $555 3.6%
When it comes to apartments, supply in inner Brisbane is starting to dwindle and there are green shoots of positivity emerging, according to Place Advisory.
Some developments are doing better than others though, with quality, owner-occupier targeted apartments in demand while those aimed at investors are not selling as fast.
Place Advisory has also carried out a study on the best performing apartment buildings in Brisbane and found good quality, high-rise apartment buildings close to the Brisbane River and with a design aimed at owner occupiers came out on top.
New Farm and Teneriffe topped the list because of their proximity to the CBD and lifestyle amenity, with the Cutters Landing building in New Farm coming out on top.
Apartments in Cutters Landing have achieved 6.1 per cent capital growth in the past 12 months.
“What has been occurring in our marketplace over the past 12 months has been a consistent trend towards higher quality properties as owner occupiers have become the predominant buyers,” the Place Advisory report said.
“However, with APRA continuing to loosen lending restrictions, expected interest rate falls and no changes to negative gearing or capital gains tax, investors will likely begin coming back into the market in the medium term.”
Other apartment buildings that outperformed the market include Oxlade Court in New Farm and Teneriffe Village in Teneriffe, where apartments have achieved capital growth of on average 5.9 per cent in the past 12 months.
Place Advisory director Lachlan Walker said boutique buildings and aspirational locations were the primary drivers of strong capital growth in apartments.
Mr Walker said apartments in the top five best performing buildings were achieving capital growth far greater than the long-term average of around three to four per cent.
“These buildings have a good reputation and are in good locations and people in the area want to live there,” Mr Walker said.
Dylan Leone and his partner, Jaco Gunter, bought a 220 sqm, two-bedroom, two-bathroom apartment in Cutters Landing in 2017.
Mr Leone said he was happy they had made a good investment choice and would hold on to the property, even if they moved in future.
“(The apartments in Cutters Landing) are fairly tightly held so that obviously influences the growth because people do choose to live there from a lifestyle perspective,” Mr Leone said.
“We really like the location and the precinct.
“From a presentation perspective, it’s incredibly well maintained and that appealed to us and … there’s not that many apartments that offer the scale that the Cutters Landing apartments do.”
BRISBANE’S BEST PERFORMING APARTMENT PROJECTS IN 2018/19
Building Average Annual Capital Growth Suburb Scale Waterfront
1. Cutters Landing 6.1% New Farm High-rise Yes
2. Oxlade Court 6.1% New Farm Mid-rise Yes
3. Teneriffe Village 5.9% Teneriffe High-rise Yes
4. Edgewater 5.7% Toowong High-rise Yes
5. Rivercity Terraces 5.6% Kangaroo Point High-rise Yes
High-rise: at least 41 apartments; Mid-rise: 11 to 40 apartments; Low-rise: Maximum 10 apartments