In Westcourt, an inner suburb of Cairns, 62.4% of homes are rented, and the median price for units is $145,000.
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Suburban Cairns unit investors reaping the highest yields amid Australia's most active 50 rental suburbs
Westcourt in Queensland and Larrakeyah in Northern Territory are the suburbs with the highest gross yields for units on the list of the most active rental suburbs. Both suburbs earn yields of gross 6.5% for units, according to RP Data figures.
The original top 50 most highly rented suburbs list was compiled by RP Data’s Tim Lawless using 2011 ABS census data.
The suburbs on the list are those with greatest proportion of rented dwellings, making no distinction between units and houses. The list excluded suburbs with fewer than 200 dwellings or suburbs where more than 25% of rental dwellings are not privately owned.
Property Observer has compiled a subsequent list of the top unit yields for those top rental suburbs. Three of the suburbs on the original list lacked statisitically reliable data for units.
In Westcourt, an inner suburb of Cairns, 62.4% of homes are rented, and the median price for units is $145,000 – the lowest median price in the list.
And in Larrakeyah, an inner suburb of Darwin, 59.1% of homes are rented with a median unit price of $430,000.
However, LJ Hooker Cairns Edge agent Jason Edwards says in real practice he hasn't seen yields like this in Westcourt.
"The figures [for] the rental yields sound high. If we were getting yields that high property would be selling like hot cakes."
Edwards is currently selling unit four at 8 Ascot Avenue for $139,000 with a current rental income of $200 per week. Without taking any outgoings into account this is technically a yield of 7.5, though Edwards says outgoings quickly eat away at this.
"[The apartment earns] $10,400 for 52 weeks. With body corp fees of $3,200 and council rates of $2,200 that leaves you with $5,000. That doesn't add up to 7.48% to any investors I talk to relative to $149,000 purchase price."
Rod Hass, residential sales manager at Knight Frank Darwin, says rental demand in Larrekayah is driven by oil and gas investments around Darwin.
"It’s a central suburb close to the CBD. It’s one of the premier suburbs here along with Fanny Bay.
"The rental market is quite strong in Darwin with the financial signoff of the Impex project – a $30 billion gas project. We’ve got workers and contractors coming in for that."
He says more unit developments are coming up but the rental market will remain strong.
"The rents are increasing on this time last year. We’ve got a strong rental market, and we’ve got quite a few buildings coming out of the ground."
"It will just balance out. There’s still a shortage of stock and we’re getting good numbers turning up to rental properties. Lots of applications."
The suburbs are followed by Spring Hill Queensland, Sydney NSW and Rosslea Queensland, all with rental yields of 6.4% for units.
The most highly rented suburb, Fortitude Valley in Queensland, comes in at number 10 with a yield of 6% and a median price of $399,000.
The yields for units in the list range from 3.8% in Crawley, WA, to 6.5% in the top two.
Median unit prices range from $145,000 in Westcourt Queensland to $663,500 in Pyrmont NSW.
Source: RP Data/ABS