Low price and high yield: Where are the properties under $500k?

In its latest Pulse Report, Hotspotting highlighted the top-performing locations nationwide that have showcased high rental yields and capital growth potential over both the past quarter and the past year.

The locations highlighted in the report were chosen based on a set of key criteria such as economy, market size, population, infrastructure, rental market, employment growth, capital growth, affordability, and low risk.

Washington Brown director Tyron Hyde said the top 10 cities for investors can be found in Queensland, Western Australia and NSW, and all have median price dwellings under $500,000 and yields above 6 per cent.

“Research like this shows current and prospective investors that there are a variety of affordable investment locations with excellent cash flow and capital growth still available to purchase,” Hyde said.

“Our nation offers so many promising areas that investors should consider for their first, or their next, investment property.”

The report showed that Queensland scored the most promising investment location with Blacks Beach where both houses and units offer high yields and growth prospects.

Additionally, Hyde said these areas also offer depreciation benefits each year.

“Across the top 10 locations, annual taxation benefits potentially range anywhere from $3,500 to nearly $7,000, depending on the type of property and the location,” he said.

“For investors in Blacks Beach, for example, the possible annual taxation benefit could be approximately $6,900 resulting in a net benefit of about $2,500 to $3,100 over the past year, depending on an investor’s personal tax bracket and the type of dwelling purchased.”

Here are the 10 most affordable locations under $500,000 for both houses and units:

Houses

1. Blacks Beach, Queensland

Hotspotting director Terry Ryder said Mackay is being “heavily targeted” by property investors, particularly in Blacks Beach.

Blacks Beach in Mackay has been highlighted as the most promising location in the report as both units and houses are affordable and provide high rental yields.

“Over 200 houses have sold in Blacks Beach in the past 12 months, with properties typically selling within two weeks,” Ryder said.

In Blacks Beach, units can be found around the $300,000s, while houses are in the $400,000s with a low vacancy rate of 0.3 per cent and a rental yield of 6–7 per cent.

“The median house price has increased 14 per cent in the past year and the median rent is up 12 per cent, with vacancies ultra-low at just 0.3 per cent,” Ryder said.

Washington Brown experts said that in addition to low purchasing prices, Blacks Beach’s annual depreciation taxation benefit on a median-priced house could be above $5,500.

2. Calliope, Queensland

Located in Central Queensland, about 20 kilometres from Gladstone Central, Calliope has been promising for investors with an average annual rate growth of 11 per cent over the past five years.

With a current median house price of $425,000, a median rent increase of 18 per cent over the past 12 months and 0.5 per cent vacancy rate, Calliope has the potential to please investors.

Additionally, according to Washington Brown, the annual depreciation taxation benefit on a median-priced house in Calliope could be $4,180.

3. Carey Park, Western Australia

According to Ryder, Bunbury has been one of the nation’s best-performing markets over the past two years, in part due to its market-rate housing and coastal location.

“Bunbury also offers an attractive seaside lifestyle and affordable housing, which no doubt accounts for it having a population growth rate well above the national average,” Ryder said.

On average, houses in Carey Park are sold in less than two weeks and the median house price grew by 29 per cent in the last 12 months despite remaining in the low $400,000s. The median weekly rent rose 23 per cent and yields remain well above 6 per cent.

In addition, Washington Brown experts believe that investors could get around $3,725 in annual depreciation tax benefits on a median-priced house in Carey Park.

4. Koongal, Queensland

Located in Rockhampton, the suburb of Koongal has recorded a five-year growth average of 16 per cent per year, including 21 per cent price growth in the past 12 months.

Despite the growth, houses in Koongal remain affordable and prices below $400,000.

Hyde said the market in Koongal is booming and prices are likely to go up.

“With houses typically selling in a fortnight, it’s likely to rise well beyond that benchmark in the near future,” he said.

“The suburb has also recorded major growth in its median weekly rental, up 17 per cent in the past year, with a median rental yield for houses of 6.5 per cent,” Hyde said.

For investors, the annual depreciation taxation benefit on a median-priced house in Koongal could be $4,481.

5. Wonthella, Western Australia

Wonthella is an inner northern suburb of Geraldton in regional Western Australia which has recorded 26 per cent annual growth despite pricing below $400,000 – a 27 per cent uplift in its median weekly rent with yields right below 7 per cent.

Ryder said the suburb is delivering outstanding uplift in both prices and rents.

“Its location between the resource-rich Pilbara area and the expanding Kimberley region to the north ensures the LGA’s continued prosperity.”

Additional annual depreciation taxation benefit on a median-priced house in Wonthella could be $5,545.

Units

1. Bowen Hills, Queensland

Located in the inner north-eastern part of Brisbane, the suburb of Bowen Hills is a hidden gem for investors as Hyde said it was “rare to find rental yields above 6 per cent on the doorstep of the CBD of one of Australia’s largest cities”.

“Bowen Hills offers proximity also to Brisbane’s largest hospital complex, but with affordable units,” he said.

In Bowen Hills, the unit median price has increased by 15 per cent in the past 12 months to a little above $500,000, with the median weekly rent growing at a similar rate.

On the current market, units sell in about three weeks which cements Bowen Hills as a popular suburb for investors.

Additionally, Washington Brown said the annual depreciation taxation benefit on a median-priced unit in Bowen Hills could reach $5,341.

2. Glendalough, Western Australia

Located within the City of Stirling about 6 kilometres from the CBD, and sitting between Lake Monger and Herdsman Lake, Glendalough has become a popular property investor hub.

According to Ryder, the unit market in Glendalough has the “kind of metrics that investors dream about”.

“The median unit price has risen 24 per cent in 12 months, but is still affordable at $355,000, rents have increased 21 per cent underpinned by a vacancy rate of 0.4 per cent, typical rental yields are close to 7 per cent and units typically sell in less than a fortnight,” he said.

According to Washington Brown, the annual depreciation taxation benefit on a median-priced unit in Glendalough could be $6,027.

3. Harris Park, NSW

Hyde noted that while this suburb may be considered downmarket, it is experiencing above-average growth due to its affordability, strong transport links, and proximity to the Parramatta CBD.

The Parramatta LGA is Sydney’s second-largest economic hub, and it’s growing economy with major projects either proposed or underway, including the Sydney Metro and Parramatta Light Rail.

“The median unit price has risen 13 per cent to $485,000 in the past 12 months and the median weekly rent has increased 16 per cent in the same period, supported by a low vacancy rate at 1.6 per cent,” Hyde said.

Washington Brown said the annual depreciation taxation benefit on a median-priced unit in Harris Park could be $5,302.

4. Lakemba, NSW

Lakemba, located in the Canterbury-Bankstown local government area, has an affordable unit price below $500,000, which is attracting buyers priced out of the rest of the Sydney market.

Ryde said Lakemba is particularly attractive for first home buyers and investors.

“Lakemba is seeing growth in both unit prices, up 13 per cent to $440,000 in the past 12 months, and the median weekly rent is up 24 per cent in the past 12 months, with a vacancy rate below 1 per cent,” he said.

According to Washington Brown, the annual depreciation taxation benefit on a median-priced unit in Lakemba could be $3,750.

5. Rivervale, Western Australia

According to Hyde, the City of Belmont LGA is gaining popularity among buyers looking for affordable units, conveniently located between the Perth CBD and the city’s airport.

Units in Rivervale are on average selling in less than 20 days, with the median price rising by 13 per cent over the past 12 months, yet remaining well below $500,000.

Rents, supported by a vacancy rate under 1 per cent, have increased by 20 per cent in the last year, with yields around 7 per cent.

Hyde also highlighted that Belmont benefits from housing the Perth Airport complex, which has seen significant expansion. Additionally, a proposed third runway is expected to further support the growth of Western Australia’s economy.

According to Washington Brown, the annual depreciation tax benefit on a median-priced unit in Rivervale could amount to $6,456.