High Capital Growth and High Rental Yield Investment Properties
Residential property in Australia is booming. This is due to many factors including high interest levels from local and international investors, lack of supply and large increases in population. In 2007 and for the first time in decades, all major cities in Australia experienced a growth in population.
Supply of new residential property has been lagging behind population growth due to increases in costs and shortage of labour. As can be expected, the lack of supply of residential properties, to house the increase in population, has led to soaring rental prices over the last few years with no let up visible in the near future. Some cities have even seen increased rental prices of up to 50% in just one year.
These conditions in residential property have created many opportunities for savvy investors. There are pockets around Australia that are providing fairly high rental returns together with expectations of significant capital appreciation. Traditionally, the market is used to residential properties providing either high rental returns OR high capital appreciation. With the right property in the right location, especially during rare times such as now, some investors are expecting, and achieving both. Developers such as Viva Properties specialize in developing properties suited to achieving these goals, in the right areas of Australia, and markets them through INESTA to knowledgeable investors seeking both high returns and high capital growth from their investments.
New vs. Old for investment purposes
Newly constructed residential properties are the ideal property type for the smart investor in Australia. The investor receives the largest tax concessions and has the least ongoing maintenance expenses.
Owning older properties are not as beneficial for investors as the ongoing maintenance costs tend to be much higher than on new properties and the investor does not benefit from the majority of tax concessions available to owners of new properties.
Location
When it comes to investing to achieve both high capital growth and rental yields, knowing the right locations can add thousands to your end result.
Several cities in Australia are currently in the enviable position of having high growth expectations whilst offering the best returns. Hobart is statistically the highest yielding city. It has experienced the most demand on the residential housing market with the least new supply being created. Moreover, Hobart has the cheapest residential property out of all Australian cities. For the investor, this translates into the ability to spread your risk by purchasing several properties and also to minimize risk as you are entering the market while it is still relatively cheap. Recent sales indicate that the Hobart property market is moving up at a rapid rate. However, brand new Townhouses can still be bought for under AU$200,000.
Another hot spot is Melbourne. In 2007, properties in Melbourne increased in price fastest in Australia. Not all properties will continue to appreciate at a fast pace. The most affordable properties are the most likely to keep appreciating. These types of properties also yield the highest returns. Some areas in Melbourne that still have affordable properties available are Frankston, Carrum Downs and Seaford. All these are bayside suburbs with enormous growth potential. In Carrum Downs, a brand new 3 bedroom Townhouse still sells for under AU$250,000. This must be one of the better value propositions in Australia as properties in most bayside suburbs regularly bring in price tags over the million dollar mark.
Property investment and ownership in Australia is a national obsession. Most Australian household wealth is held in property. Property prices have also become a hot topic for discussion over the last few years. This massive interest in property by the general population will be beneficial to anyone investing in residential property in Australia. Providing you, the investor, are able to identify and invest in the better areas, you will benefit from strong rental yields and capital appreciation.
Information Supplied by:
Inesta Property Sales & Management
1433 Malvern Road, Malvern Vic 3144
Phone: +61 3 9804 3334
Fax: +61 3 9822 4144
Email: duncan.smith@inesta.com.au
Website: vivaproperties.com.au | 
