The latest census figures show rents have been climbing steeply around the country, particularly in the most affordable areas. This has upturned the traditional property investment mantra of buying close to the city, and experts are advising investors to seek homes further afield.
Cameron Anderson of Silverhall says, "We have found the West and South West areas have continued to enjoy rental growth over the last 3 years. We have noticed a significant increase in demand for properties that are benefiting from the M7”.
While homes in the most desirable areas climbed the fastest in the boom years, they have fallen the furthest since the financial crisis.
RP Data head of research Tim Lawless warns against buying too far from the CBD in fringe areas which don't yet have infrastructure installed. But as long as a suburb has good public transport and shops, investors should not have much trouble finding a tenant, he says.
Lawless expects Melbourne is likely to see the least rental growth, with relatively high vacancy rates and a lot of new housing in the next year.
Ray White Group chairman Brian White says relatively affordable homes in inner-city areas have good rental prospects, with strong demand from students and young professionals. "This is where people want to be, they're getting better salaries and they can afford to pay better rent" White says.
But he warns investors to "temper your enthusiasm with reality" when it comes to booming resource towns such as Gladstone in Queensland, where rental growth had not always been as strong as he expected.
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