The key to tenant demand
To secure property in the most sought-after areas there’s one ingredient no investor can afford to ignore, according to a new report.
Areas serviced by public rail are shaping up to present far more attractive investment opportunities with lower vacancy rates and stronger yields across the board, according to PRDnationwide’s Australian Railway Suburbs Report.
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Within metropolitan centres, ‘railway suburbs’ saw low vacancy rates that ranged between 1.2 per cent in Perth, and 2.7 per cent in Melbourne. Rental yields also outperformed house and unit accommodation in non-rail suburbs.
"Investors snapping up properties in railway suburbs in the west of Sydney are experiencing rental yields of between 4.6 per cent and 5.2 per cent," said PRDnationwide director of research Aaron Maskrey.
"Similarly, houses in railway zones in Brisbane offer a robust investment opportunity, as they consistently deliver higher rental yields whilst being no more expensive to purchase than unit accommodation in non rail suburbs."
In the tight rental market in Perth, rail and non-rail areas have minimal difference in price. However, unit rental yields are slightly stronger. This may be steadily attracting investors to the area, he said, as “we can see that investors are buying into railway suburbs, with a noticeable 19.3 per cent increase in unit sales when compared to 12 months ago".
Melbourne is the only capital where railway suburbs are not necessarily performing more strongly.
"The Melbourne unit market is currently transitioning through its existing stock, resulting in lower yields compared to those seen in Sydney, Brisbane, or Perth," he said.
