20 of the best Australian suburbs for low-deposit investing
New research has revealed the best suburbs for investors looking to enter the property market with a deposit of less than $100,000.
Two years of booming national property prices have propelled housing affordability to the forefront of the national agenda; however, the latest report from Suburb Help has identified that there are still a number of suburbs out there with a lower barrier to entry.
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The quarterly Suburb Help $100k investment report searches for property that suits investors looking to purchase with less than $100,000 ready to go. In order to ensure these suburbs are suitable for investment, areas were excluded if they had:
- A median price above $1 million
- Owner-occupier shares of less than 65 per cent and more than 90 per cent
- Renter share less than 10 per cent or more than 35 per cent
- A vacancy rate higher than 1.5 per cent
- Yield at less than 3 per cent
- Median weekly rent that has increased by less than 5 per cent over the previous 12 months
Using these parameters, most Australian suburbs were filtered out to a list of 20 investment grade suburbs, with the final list ranked from lowest median price to highest.
The list includes a mix of metro and regional locations, nine of which were located in NSW, six in the ACT, two in both South Australia and Victoria and one in Tasmania.
Suburb Help chief property strategist Veronica Morgan said the report’s findings are valuable for investors looking to enter the market, especially in such testing conditions.
“It’s not easy to buy a property right now, for a couple of reasons. First, even though prices are declining in many parts of Australia, they’re still elevated following the recent boom. Second, investors’ borrowing power is declining with every Reserve Bank rate hike,” she explained.
“It’s good to know that if you find a lender prepared to accept a 10 per cent deposit, you can still buy into a good investment location for [a] relatively modest price, provided you do your research.”
She outlined how each suburb on the list had been carefully selected, as the group looked to provide locations that “were not only likely to record above-average capital growth over the long-term but would also provide a healthy cash return right now”.
“That’s why we limited ourselves to locations that had low vacancy rates and reasonable yields. As a result, if you buy a quality property in one of these locations, you should find it relatively easy to secure a reliable tenant prepared to pay a good rent,” she concluded.
The 20 Australian suburbs where investors could purchase property with a $100,000 deposit are:
- Langwarrin, Vic – Unit:
Median price: $590,000
10 per cent deposit: $59,000
Median yield: 3.5 per cent
- Charlestown, NSW – Unit:
Median price: $620,000
10 per cent deposit: $62,000
Median yield: 3.8 per cent
- Bellerive, Tas – Unit:
Median price: $625,000
10 per cent deposit: $62,500
Median yield: 3.7 per cent
- Eden Hills, SA – House:
Median price: $760,000
10 per cent deposit: $76,000
Median yield: 3.6 per cent
- Medowie, NSW – House:
Median price: $775,000
10 per cent deposit: $77,500
Median yield: 3.8 per cent
- Macquarie Hills, NSW – House:
Median price: $786,000
10 per cent deposit: $78,600
Median yield: 3.9 per cent
- Pasadena, SA – House:
Median price: $787,000
10 per cent deposit: $78,700
Median yield: 3.4 per cent
- Kahibah, NSW – House:
Median price: $792,000
10 per cent deposit: $79,200
Median yield: 3.2 per cent
- Ngunnawal, ACT – House:
Median price: $801,000
10 per cent deposit: $80,100
Median yield: 3.9 per cent
- Macgregor, ACT – House:
Median price: $825,000
10 per cent deposit: $82,500
Median yield: 3.8 per cent
- Holt, ACT – House:
Median price: $832,000
10 per cent deposit: $83,200
Median yield: 3.6 per cent
- Cardiff Heights, NSW – House:
Median price: $840,000
10 per cent deposit: $84,000
Median yield: 3.7 per cent
- Belgrave, Vic – House:
Median price: $845,000
10 per cent deposit: $84,500
Median yield: 3.1 per cent
- Currans Hill, NSW – House:
Median price: $845,000
10 per cent deposit: $84,500
Median yield: 3.1 per cent
- Narellan Vale, NSW – House:
Median price: $875,000
10 per cent deposit: $87,500
Median yield: 3.1 per cent
- Dunlop, ACT – House:
Median price: $880,000
10 per cent deposit: $88,000
Median yield: 3.7 per cent
- Bonner, ACT – House:
Median price: $882,000
10 per cent deposit: $88,200
Median yield: 4.1 per cent
- Fletcher, NSW – House:
Median price: $896,000
10 per cent deposit: $89,600
Median yield: 3.3 per cent
- Evatt, ACT – House:
Median price: $935,000
10 per cent deposit: $93,500
Median yield: 3.4 per cent
- Adamstown Heights, NSW – House:
Median price: $985,000
10 per cent deposit: $98,500
Median yield: 3.4 per cent
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