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Suburbs close to a CBD where you can score the highest rents and yields

Feb 28, 2020 |GODFREY DINH

If you’ve been holding off your great property investment plans, 2020 could be a good year to dive into the market.

The latest figures from the Australian Bureau of Statistics show that investors are coming back into the game, with lending to investors hitting $5.44 billion – a 14-month high.

Investor lending climbed by 2.8 per cent in December 2019, making it the third consecutive month where this housing finance segment saw an increase.

With demand from investors recovering quickly, it could be a good move for those considering investing this year to get cracking on their plans.

If you’re hunting for strong rental returns, you might shun the idea of investing in inner city areas, as it’s commonly accepted that areas in proximity to the city generally have tighter yields.

But if you know where to look, you can still find gems with high yields without leaving the city.

Greater Hobart and Darwin were home to most of the suburbs with the highest gross yields within 10km of a CBD, according to CoreLogic data.

The strongest yields in the country for an inner-city area can be found in Risdon Vale. Houses here return 8.1 per cent with median rents at $375 a week, as of December 2019.

Risdon Vale, about 8km from the Hobart CBD, has a median value of about $287,000. This increased by nearly 11 per cent since December 2014, making it the suburb with the strongest house price growth in that period.

Another good option for strong house yields is Clarendon Vale, about 10km from Hobart’s CBD. Median house rents are $355 a week on a 7.7 per cent yield.

With a median house price of $302,000, Clarendon Vale is also a suburb where you could bag a bargain, being the second cheapest suburb within 10km of a CBD.

For units, the best rental yields nationally can be found in ACT’s Curtin. Investors can score a median weekly rent of $380 on a 7.6 per cent return.

Curtin, about 9km from Canberra’s CBD, is also home to the most affordable units in the capital city, with the median value sitting at $263,000.

Many investors are more comfortable parking their money in Sydney and Melbourne. If you prefer to stick to the big smoke, Carlton in inner Melbourne was the only suburb in the two major cities that made the list.

Units in Carlton, only 1.4km from the CBD, earn a median rent of $435 per week on a 7.1 per cent yield.

With the median unit value here at a relatively affordable $365,053, it’s your best bet of securing a unit in a major city centre without spending a fortune.

Savvy investors appear to have caught on to this, snapping up 160 units in the suburb in 2019.

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Godfrey has invested in property in Australia and the USA, personally and professionally, for over 15 years. He is passionate about helping landlords on their property investment journey

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