The inner Brisbane suburbs with the best prospects for property investors
By Sarah Webb
A “sleeping giant” just a few kilometres from the CBD, a fast-growing borough next to the Gateway Bridge and a prestigious riverside suburb have been named some of the best pockets to park your property investment dollars within a 10-kilometre radius of Brisbane city.
According to Domain’s latest Rent Report, units in Murarrie, Kangaroo Point, Kelvin Grove, Teneriffe and Cannon Hill now boast the strongest rental yields for landlords – with Brisbane City itself topping the list after yields reached 5.29 per cent.
Polarising inner city suburb Fortitude Valley also made the top 10, alongside Gordon Park, Enoggera and Woolloongabba with each postcode scoring a strong yield of over five per cent. Among the top 20 markets by rental yield, all were unit markets, not houses.
Dr Nicola Powell, chief of research and economics at Domain, said the figures painted a compelling picture for investors keen for a small slice of the fast-growing Queensland capital, which has clocked eye watering growth in the unit sector over the past 12 months.
“This means the cash flow is there,” Dr Powell said.
“And while it depends on what an investor is after, I think if you’ve got house prices that have now bottomed out it’s a good time for an investor to act as it’s good to buy at the bottom within a tight rental market.”
Brisbane investors can find attractive rental yields in suburbs such as Teneriffe. Credit: Jamila Toderas
Kelvin Grove, where median asking weekly rents for units rose 22.5 per cent in a year to $490, now has a rental yield of 5.2 per cent. And if you ask Place Estate Agents Newmarket principal Mario Sultana, it’s one of most underrated inner city suburbs to pour your investment dollars.
”Kelvin Grove has long been the little sleeping giant – it gets over shadowed by surrounding suburbs like Paddington but in the last two or three years there’s been a lot of infrastructure work there,” he said.
“We’ve got the metro rail coming in here … then you’ve got the nearby Victoria Park Golf Course. Then you’ve got the amalgamation with Newmarket with the green belt, and then you’ve got the Olympic Games and all the upgrades that will come with that to this area.
“In the unit and townhouse market we have already seen exponential growth in rental prices – some have gone up $150 per week in 12 months, and it’s the same with the unit prices themselves. I think they are coming off a lower base and it’s catching up a bit but with a two-bedroom, two-bathroom investment unit there you can’t go wrong.”
While Mr Sultana said owner occupiers, and particularly professional couples, were leading the buyer charge in the suburb, a growing cohort of both local and interstate investors were moving in.
Over at Murarrie, where rental yields reached 5.29 per cent after weekly asking rents for units skyrocketed by 26.9 per cent in the 12 months to $590 per week, RE/MAX Results agent Kylee Harnisch said investors were descending thick and fast.
“Units and townhouses are the one area of the market that’s performing really well right now, and investors are seeing the value. They are mostly locals, but we’ve had a few from Sydney and Melbourne,” she said.
“I think being only five kilometres out of the city and the fact that it’s central to everything is driving that. There are also a lot of new developments at Cannon Hill and Murarrie … it’s really flourished and there’s so much demand there for tenants.”
Tight stock levels, Ms Harnisch said, have also fuelled demand.
“A lot of investors are looking for a 1970s six pack block with low body corporate that’s close to shops, cafes, and public transport and that’s what you can get here,” she said.
Brisbane buyer’s agent, Wendy Russell said the strong yields, coupled with good capital growth were delivering top investment opportunities within a five-kilometre radius of the city, with interstate and even overseas buyers particularly keen to pour their property dollars into the capital.
“They feel Brisbane is undervalued compared to Sydney and Melbourne. They are looking at liveability and climate and they are looking at the investment potential and they are looking at rental yield and capital gains for that cash flow.
“I think people are seeing really good value in terms of inner city apartments … especially for those who want to invest with the intention of moving in after a few years.”
Ms Russell said she recently helped one client from Sydney snap up an investment property who needed a home close to the centre, with a good yield, and in a highly liveable pocket as they eventually intended to move into it themselves.
“We chose a one-bedroom in South Brisbane, and I think we paid $435,000 for that property and that’s going to rent for $480 a week,” she said. “It shows there’s value in the city.”
Across Greater Brisbane, suburbs in budget-friendly Logan and Woodridge topped the rental yield list, with rent prices rising almost 20 per cent across both pockets over the past year.
Unit rental yields in Logan are now a strong 7.45 per cent, after median weekly unit rents climbed 18.5 per cent to $320. And in nearby Woodridge, the rental yield is 7.41 per cent after unit rents rose 17.9 per cent to $330.