New South Wales’ north coast is home to some of the markets with the most attractive rental yields for property investors, according to new findings.
A new study by buyers’ agency InvestorKit has revealed eight markets in NSW North Coast that have strong market fundamentals for investors.
These include Gosford, Wyong, Lake Macquarie – East, Newcastle, Port Stephens, Port Macquarie, Coffs Harbor and Richmond Valley – Coastal.
According to the study, these areas are under pressure as indicators point to tight supply and demand conditions.
InvestorKit head of research Arjun Paliwal said the entire north coast of NSW appears to be in a real estate boom, with home prices rising at least 10% in the past 15 months.
“The pressure on the property market for NSW’s northern coastal markets is one of the highest in the country right now,” said Mr Paliwal.
“This is good news for those already in the market, but problematic for potential buyers due to the extremely high competition.”
“Investors can expect a healthy gross rental yield of around 4 per cent for most coastal cities, but this will move closer to Sydney’s main hubs,” said Mr Paliwal.
Mr Paliwal said there are several factors contributing to market pressures in the NSW North Coast region.
These include the low interest environment, better access to credit, a strong local job market and changing lifestyle preferences encouraging Australians to look beyond the capitals.
“We expect market pressures to remain intense over the next 12 months, sales and rental prices to continue to rise and the regions of the north coast to outperform our capitals by 2022,” he said.
Best NSW North Coast Markets for Investors
According to InvestorKit, these are the eight best markets in the NSW North Coast for investors.
Most of these markets have rental yields hovering around 3.5%.
Please note that the median prices listed for each market are from the most recent data available from the sources in parentheses.
Gosford – $790,000 (Realestate.com.au)
Gosford recorded an 18.4% growth in the median house price over the past 12 months.
While new quotes in this market declined, sales volume has continued to grow since June.
Demand for rental properties also remained high: the average number of monthly advertisements fell by 28.7% last year.
Gosford’s rental yield is around 3.5%.
Wyong – $725,000 (Realestate.com.au)
Wyong posted a 16.7% increase in median prices over the past year, while reporting a 40.3% decrease in the average number of days before sale in the market.
Wyong’s rental vacancy rate stands at 0.3%, indicating a “rent crisis.” The tight rental conditions in this market have led to an increase in median rents.
This market has a rental yield of 3.5%.
Newcastle – $1.38 million (Realestate.com.au)
Newcastle’s median property price increased by 15.3% over the 12-month period.
Over the same period, monthly rental offers in the region fell by 21%, making Newcastle a very busy rental market.
Port Stephens – $800,000 (PRD real estate)
The median price in Port Stephens has risen 10.7% over the past year as properties have been on the market 40% shorter than last year.
Lake Macquarie – East – $675,000 (real estate investor)
Since the second quarter of 2020, the median price in Lake Macquarie – East has been rising sharply.
In fact, it reported a price increase of 13.7% in the past 12 months.
Demand for rental properties in this market has also been strong, with listing days falling by a third.
Port Macquarie – $703,500 (Realestate.com.au)
Of all the markets in this list, Port Macquarie recorded the lowest median price gain of 10.2%.
Prices in this market have been declining since June 2020, with an average decline of 35% per month.
Yet it has one of the highest rental yields at 4%.
Coffs Harbor – $660,000 (Realestate.com.au)
Coffs Harbor reported one of the highest median price increases of any market on this list at 21%.
The rental market is also showing signs of increased competition as supply fell by 31.8% over the past year.
Rental yields in Coffs Harbor are expected to reach 4%, which is “rare” for a coastal location.
Richmond Valley – Coastal – $389,000 (real estate investor)
Richmond Valley – Coastal, which consists of Ballina, Brunswick Heads, Byron, Bangalow, Woodburn and Evans Head, led the way in price growth.
Last year the median price in this market grew by 27.3%.
Listings in Richmond Valley – Coastal continued to decline.
On the other hand, monthly sales volumes have continued to rise since mid-2020 and recently peaked in July 2021.
The supply of rental housing in this market also fell by 37.1% last year.
Photo by Prescott Horn on Unsplash.