Market conditions provide boost to Queensland property yields
October 22, 2009
Steady rents and an easing of property price growth in some areas have resulted in a number of postcodes recording improved gross rental yields over the June quarter.
According to the Real Estate Institute of Queensland (REIQ) June quarter gross rental yield report - released last week, consistent median rents and more affordable prices have helped areas such as Kingsthorpe, Macleay and Russell Islands, and Yorkeys Knob in Cairns make their first appearance on the top 20 list.
While median rents have remained steady, or risen slightly, across Queensland, there has also been a levelling of prices in some areas which has contributed to stronger yields.
The results for gross rental yields for houses has seen Sarina, in the Mackay region, knocked off the top spot by Kingsthorpe, 15 minutes drive west of Toowoomba.
Kingsthorpe’s yield of 6 per cent is due to its affordable median house price of $240,000 and an increase of its median rent from $250 to $280 per week over the June quarter. Kingsthorpe is an affordable place to buy in the Darling Downs region and offers a great lifestyle with houses often on larger blocks than in Toowoomba itself, the researchers suggested.
Second for houses was Sarina with a yield of 5.9 per cent, while Mount Morgan was third and regularly features in the top three due to its very low median house price of $142,000.
A new entry on the house list at number four is Macleay and Russell islands in Brisbane’s Moreton Bay with a combined gross yield of 5.8 per cent.
Both islands are consistently some of Brisbane’s most affordable places to buy and, when coupled with a $15 increase in median rent over the period, the islands are providing very solid yields for investors.
The number one spot by postcode for units and townhouses over the June quarter was Brisbane/Spring Hill with a gross rental yield of 7.8 per cent. While Brisbane’s inner city is usually a top yield performer, over the June quarter its median unit and townhouse price was skewed lower due to a larger than usual number of sales of serviced, studio and one-bedroom apartments over the period.
Woree in Cairns again came in at number two with a gross rental yield of 7.3 per cent. The region continues to benefit from its affordable unit price of $150,000.
Another new entry on the list is Yorkeys Knob, also in Cairns, at number three with a gross rental yield of 6.2 per cent. Even with its location on Cairns’ northern beaches, Yorkey’s weighted median unit and townhouse price remains an affordable $200,000 with a solid $240 per week median rent over the June quarter. While Yorkeys Knob has a mix of more expensive beachfront units and developments a few streets away from the beach, over the June quarter the most common sale was for these more affordable properties which has helped to increase its gross rental yield.
Port Douglas has moved sharply down the list for unit gross rental yields this quarter- from number 1 to number 10 - due to an increase in its median sale price over the period.