Best Properties Up For Grabs In Real Estate Investor Hotspots

Investors are much more active in the property market this year, but where are the best places for them to invest their hard-earned dollars?

Here are some good potential buys in investor hotspots around Australia picked by Hotspotting director and founder Terry Ryder.

Tamworth, New South Wales

It’s best known as Australia’s Country Music Capital, but with much more on offer in Tamworth, five hours north of Sydney, the city’s property market is heating up.

It’s still affordable, but Tamworth’s price growth – the median house price rose 12.3% in the year to May, hitting $440,000 – is expected to continue.

Buyer demand in the well-established regional New South Wales hub grows.

The city offers a great rural lifestyle and an economy underpinned by agriculture, mining, tourism, aviation, and healthcare, with the education sector to be boosted by a new University of New England campus, Mr Ryder said.

Tamworth’s economy is being strengthened by infrastructure projects, including the intermodal freight hub, which will form part of the $100 million Tamworth Global Gateway Park, he added.

Other projects include a $210 million hospital upgrade, a $490 million dam project, a $1.2 billion gas pipeline, and $7.5 billion in renewable energy projects.

Mr Ryder said Tamworth’s property market is strong, with low vacancy rates and consistently high rental yields.

Tamworth is attracting investors from as far afield as Victoria and Queensland due to its affordability and the returns on offer, according to Fenn Real Estate principal Marie Fenn.

“You can get two properties in Tamworth for what you pay for one in Sydney,” Mr Fenn said.

South Tamworth, just south of the Tamworth CBD, is one suburb with good investment potential.

It has a mix of established and new homes, with a median of $315,000, following 23 per cent growth over the past year, according to Hotspotting. It has a median yield of 5.6 per cent.

Ms Fenn is marketing a three-bedroom house for sale at 7 John Street in South Tamworth with a listing price of $399,000, which is rented for $360 per week, equating to a yield of 4.7%, with room for growth.

“With the increase in activity in the past couple of years, there is scope there for a rental rise,” she said.

Paralowie, South Australia

Paralowie and surrounding suburbs in the City of Salisbury in Adelaide’s north, including Salisbury, have been “going through the roof”, according to LJ Hooker agent Corey Voss.

“We’re getting multiple offers for each home, and a lot will pay more than the asking price,” Mr Voss said.

“Interstate investors are looking over here because it’s so much cheaper and there is a good return on investment.”

Investor interest has increased since South Australia’s border fully reopened, but many have also been buying site unseen, he said.

Paralowie saw a dramatic increase in sale volumes throughout 2021, with 269 houses selling, according to Mr Ryder.

It currently has a median house price of $409,500 following a 19.7% growth over the past year to May, according to PropTrack data.

Its vacancy rate is just 0.2 per cent, rents are rising, and the median yield is 4.9 per cent.

The suburb is close to rail links, a town center with shops, schools, and a TAFE campus situated in Salisbury.

Mr Voss is marketing a house at 1 Bayonet Drive in Paralowie with a price range of $300,000 to $315,000, and while the rent is currently $255 per week, the market rent is around $320, equating to a yield of more than 5%.

Mr Ryder said the City of Salisbury was “poised for major growth” with infrastructure spending, construction projects, and growing employment opportunities.

Economic drivers include defense projects worth $4 billion-plus, an $885 million North-South Corridor transport project, the Gawler train line electrification, the $250 million General Motors Holden plant redevelopment, and a $240 million health hub.

Mr Ryder said the $1.9 billion Edinburgh Parks Industrial Estate being developed has seen large companies relocating to Salisbury, further boosting employment prospects.

Rockhampton, Queensland

Demand for housing is strengthening in the regional city of Rockhampton, creating opportunities for investors.

Despite price rises over the past two years, Mr Ryder said the affordability of the Rockhampton market meant even the more expensive suburbs were still within reach of most buyers.

This includes Frenchville, which has a median house price of $375,000, following a 14.1% rise over the past 12 months.

The suburb has a vacancy rate of 0.5 per cent, with rental yields around 6%.

Jenny Powell of Pat O’Driscoll Real Estate said Frenchville is the most sought-after area for housing on city’s northside, with real estate holding its value as a result.

Ms Powell said the suburb’s central location is a drawcard, being 10 minutes from the CBD and close to schools and shops, including the Stockland Shopping Centre.

It also isn’t prone to flooding, being further from the Fitzroy River, she added.

“We’re noticing that every time we list a property at the moment, it’s for $20,000 more than two months ago.

“None of us have a crystal ball but I don’t believe price growth will drop off anytime soon, due to the fact that we don’t have enough properties.”

Rents are also rising in Rockhampton due to the lack of housing, with more people moving to the area to work on infrastructure projects, as well as migrating from down south, added Ms Powell.

A four-bedroom house she has listed for sale at 127 Venables Street in Frenchville at $429,000 has an expected rental of $450 to $480, equating to a yield of 5.5% to 5.8%.

While it has been renovated, there is still room to add value by building in underneath.

Mr Ryder said the underlying economy in Rockhampton is growing, helped by major spending on infrastructure and a revival in the resources sector, with the construction of the Bravus coal mine underway.

Infrastructure projects include the proposed $600 million Capricorn Integrated Resort, the $1.3 billion Clarke Creek Wind, Solar and Battery Power Station, the $240 million Capricornia Correction Center expansion, and $1 billion being spent on road infrastructure projects.

There’s also the $495 million Lower Fitzroy River weir project, the transformation of the CBD, and the $2.5 billion redevelopment of the Australia-Singapore Military Training center at Shoalwater Bay.

Wellard, Western Australia

The City of Kwinana is the cheapest in Perth and has great prospects for investors.

It includes the suburbs of Wellard, Parmelia, Leda, Medina, and Orelia, clustered around the Kwinana Town Centre, 40 kilometers south of the Perth CBD.

In addition to affordability – despite recent growth, with a 7% increase in its median house price to $358,500 – property in the area has good yields and low vacancies, Mr Ryder said.

“(The Kwinana precinct) has access to key jobs nodes, train links to the city, access to nearby beaches, and green space like The Spectacles Wetlands.”

Aaron Bazeley of Southern Gateway Real Estate said there had been a “perfect storm” creating high demand for housing in Kwinana from both buyers and renters.

“I’ve been selling now for 20 years, and this is like nothing I’ve seen before,” Mr Bazeley said. “Homes are selling as soon as they are listed and sometimes before.

“Investors from the eastern states are putting in offers of $20,000 to $30,000 above asking price just to secure them.

“Some are having a video walk-through, but many aren’t even bothering with that.”

There is also a waitlist for rentals with strong demand for housing, delivering yields around 5% to 6%, Mr Bazeley said.

The suburb of Wellard has a median price of $410,000 and delivers an average yield of 5%. It had the highest number of sales in the City of Kwinana with 299 over the past 12 months.

A four-bedroom house just listed at 4 Bromley Road in Wellard with offers over $469,000 has already attracted investors wanting to make an offer, Mr Bazeley said.

The rental rate for the home would be between $470 to $500 per week, equating to a yield of around 5%.

Redbank Plains, Queensland

The growing city of Ipswich, in which Redbank Plains is located, is poised for another period of growth, according to Mr Ryder.

He said it has attracted steady buyer demand because it is affordable, close to growing employment nodes, accessible via road and public transport, and has plenty of infrastructure projects.

Mr Ryder said the Redbank precinct, including Redbank Plains, Redbank, Goodna, Bellbird Park, and Collingwood Park, has potential because of residential, retail, industrial, and infrastructure development, including new schools.

Employment options are being boosted by industrial estates including the $1 billion Citiswich Industrial Park, the Swanbank Enterprise Park, and the $350 million Redbank Motorway Industrial Park, while the precinct is also home to the $5 billion project to build 211 Australian Defense Force vehicles, he added.

Redbank Plains has a median house price of $424,500 following growth of 28.6% over the past 12 months, PropTrack data shows.

It has a yield of 4.9% and has had a huge volume of sales over the past 12 months, with 775 homes selling.

The property market in Redbank Plains is buoyant, with sales and rentals experiencing significant growth, according to Patty Oldham of Professionals – Redbank Plains.

There is a shortage of rentals, with vacancy rates close to zero and weekly rental prices on the rise, Ms Oldham said.

“We expect weekly rentals will continue to increase due to local demand and an overflow of tenants priced out of the market in the outer Brisbane suburbs.”

A three-bedroom home currently listed by Ms Oldham at 24 Hartley Crescent in Redbank Plains for $419,000 has an expected rental rate of $370 to $380 per week, equating to a yield of at least 4.6%.