With rents and home prices rising rapidly and the market showing few signs of abating, more people are looking for affordable properties they can rent out to subsidise their own rental in a more affluent area.<\/p>\n
Two highly regarded property authors and industry experts, Nicola McDougall and Kate Hill, recently turned their data analysis skills to identifying five of the best rentvesting locations in Australia.<\/p>\n
The pair identified local government areas in each of the mainland state capitals.<\/p>\n
Ms Hill, who is also a Qualified Property Investment Adviser (QPIA) and a property buyer at Adviseable, said rentvesting was a strategy that involved purchasing property in a more affordable location and continuing to rent the property you live in.<\/p>\n
\u201cAs well as many young people moving to more affordable areas over recent years, rentvesting has become a popular strategy<\/a> for those who want to buy property but still want to remain living in an expensive real estate city such as Sydney or Melbourne,\u201d Ms Hill said.<\/p>\n \u201cRenting continues to be more affordable than purchasing in desirable pockets of major cities, where buy-in prices can easily be millions of dollars and where many young people desire to live.\u201d<\/p>\n \u201cHowever, being a long-term renter without putting your money to work somehow has significant ramifications on your financial future as well as potentially causing hardship in retirement.\u201d<\/p>\n Highest rental growth suburbs in 2021<\/strong> Source: Corelogic, Ray White. Restricted to areas with more than 50 observations.<\/p>\n No rent relief in sight<\/strong><\/p>\n Australia ended 2021 with house prices up 21 per cent compared to the start of the year.<\/p>\n Ray White Chief Economist Nerida Conisbee said that while at this stage, it is looking like house price growth will continue<\/a>, albeit at a slower pace, rental levels are set to accelerate.\u00a0<\/p>\n Rental increases<\/a> were far more subdued than price growth in 2021, increasing on average by 6.7 per cent.<\/p>\n \u201cIt\u2019s a great result for landlords, particularly given the more challenging conditions in 2020, but obviously far tougher for tenants.\u201d<\/p>\n Ms Conisbee said the areas that have seen the most rental growth are linked to mining, particularly regional Western Australia, Perth and Darwin.<\/p>\n \u201cAll these areas saw sharp declines in rents following the end of the mining boom in 2013 but since the start of the pandemic have shot up again, although are yet to return to their peak.<\/p>\n \u201cInterestingly, despite the strongest rental growth in Australia, Perth and Darwin have seen some of the slowest house price growth.\u201d<\/p>\n Source: Corelogic, Ray White.<\/p>\n According to new research by the Grattan Institute, most Australians still believe they will have their own home paid off by the time they retire, but that is no longer a certainty.<\/p>\n The research found that by 2056, the rate of homeownership for over-65s will have declined from about 76 per cent today to about 57 per cent.<\/p>\n Ms McDougall said the declining rates of homeownership<\/a> may see more people spending their twilight years living in poverty.<\/p>\n \u201cThe research means young people in their 20s today may find themselves without a home to call their own in retirement, with many likely to be financially stressed if they rent, or even to suffer poverty,\u201d Ms McDougall said.<\/p>\n Top five affordable rentvesting locations<\/strong><\/p>\n Example suburb: Cranbourne<\/a><\/p>\n
<\/p>\n Median house price \u2013 $657,000<\/p>\n
<\/p>\n Rental vacancy rate \u2013 1 per cent<\/p>\n
<\/p>\n Ms Hill said the Victorian Government has identified several suburbs in the City of Casey, southeast of central Melbourne, to play a major role in service delivery and creating employment in its long-term planning document.<\/p>\n
<\/p>\n \u201cThe area\u2019s population growth rate during recent census periods was higher than other rapidly growing outer Melbourne municipalities – in fact, it\u2019s growing at a rate more than twice the national average,\u201d Ms Hill said.<\/p>\n
<\/p>\n Local industries are diverse, which means the area is not dependent on only one industry.<\/p>\n
<\/p>\n Ms Hill said about 60 per cent of locals live and work in the area and generally don\u2019t commute into the CBD, which makes it an attractive lifestyle choice for families along with very affordable housing compared to most of Melbourne.<\/p>\n
<\/p>\n \u201cCasey City Council release land for development responsibly, and have done so thus far, keeping supply steady.<\/p>\n
<\/p>\n \u201cIn spite of developments to cater for the growing population, the growth charts are steady, vacancy rates are generally low, and rents have been increasing steadily.\u201d<\/p>\n
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<\/p>\n Example suburb: Caboolture<\/a><\/p>\n
<\/p>\n Median house price \u2013 $445,000<\/p>\n
<\/p>\n Rental vacancy rate \u2013 0.7 per cent<\/p>\n
<\/p>\n From surging population to myriad major infrastructure projects, including a brand new university in Petrie <\/a>and the redevelopment of Caboolture Hospital, the Moreton Bay<\/a> region ticks many investment fundamental boxes for new and seasoned investors, Ms McDougall said.<\/p>\n
<\/p>\n \u201cA few years ago, Moreton Bay was classified as a priority growth area by the State Government, with its population predicted to hit half a million within about two decades,\u201d she said.<\/p>\n
<\/p>\n \u201cCaboolture West is at the heart of a rapidly growing corridor north of Brisbane and is expected to eventually provide about 30,000 homes for around 70,000 people as well as generate close to 23,000 jobs,\u201d she said.<\/p>\n
<\/p>\n \u201cThe area will also have access to a number of primary and high schools as well as a TAFE and a private hospital.\u201d<\/p>\n
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<\/p>\n Example suburb: Morphett Vale<\/a><\/p>\n
<\/p>\n Median house price \u2013 $430,000<\/p>\n
<\/p>\n Rental vacancy rate \u2013 0.1 per cent<\/p>\n
<\/p>\n Ms Hill said the City of Onkaparinga, incorporating Onkaparinga Hills<\/a>, has strong population growth forecasts, coupled with affordable property prices, low vacancy rates and access to the central city.<\/p>\n
<\/p>\n \u201cThe area also has an attractive seaside location, with a track record of steady price growth and above-average rental yields in one of South Australia\u2019s strongest population growth areas,\u201d Ms Hill said.<\/p>\n
<\/p>\n \u201cOver the next 20 years, the region is expected to receive an influx of 48,000 additional residents, making it one of Adelaide\u2019s strongest growth areas.\u201d<\/p>\n
<\/p>\n Ms Hill said the region is a location that ticks a lot of boxes for rentvesters because it has lifestyle, affordability, improved transport links, economic growth drivers, population growth, and proximity to major jobs nodes.<\/p>\n
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<\/p>\n Source: Corelogic, Ray White.<\/p>\n
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<\/p>\n Example suburb: Mirrabooka<\/a><\/p>\n
<\/p>\n Median house price \u2013 $385,000<\/p>\n
<\/p>\n Rental vacancy rate \u2013 0.4 per cent<\/p>\n
<\/p>\n Ms McDougall said the City of Stirling is one of four precincts in the Perth metropolitan area that led the recovery in the Perth property market two years ago, following the city\u2019s multi-year real estate downturn.<\/p>\n
<\/p>\n \u201cContributing to the region\u2019s appeal are the shopping and education facilities, coupled with good transport links to the Perth CBD.\u201d<\/p>\n
<\/p>\n Ms McDougall said the City of Stirling is also the largest local government area in Perth, the largest local government by population in the state, and the second largest employment district in Western Australia after the Perth CBD.<\/p>\n
<\/p>\n \u201cSerious development began to occur there in the 1960s and 1970s as Perth expanded,\u201d Ms McDougall said.<\/p>\n
<\/p>\n \u201cThe City of Stirling has also initiated a project to improve the inland north-of-the-river suburbs of Balga<\/a>, Dianella<\/a>, Nollamara<\/a>, Mirrabooka, and Westminster<\/a>.<\/p>\n
<\/p>\n \u201cGenerally, these suburbs can expect revamped town centres, improvements to transport, and higher-density housing.\u201d<\/p>\n
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<\/p>\n Example suburb: Kingswood<\/a><\/p>\n
<\/p>\n Median house price \u2013 $790,000<\/p>\n
<\/p>\n Rental vacancy rate \u2013 1 per cent<\/p>\n
<\/p>\n Ms Hill said Western Sydney is considered Australia\u2019s third largest economy, with more than $22 billion earmarked to be spent on transport infrastructure, including \u2018WestConnex\u2019, Parramatta Light Rail, and Badgerys Creek<\/a> Airport, over the next few years.<\/p>\n
<\/p>\n \u201cEmployment in Western Sydney is expected to grow 47 per cent within the next 14 years,\u201d Ms Hill said.<\/p>\n
<\/p>\n \u201cPenrith City Council and business organisations have seized the moment and are implementing plans to create 12,000 jobs by 2036.\u201d<\/p>\n
<\/p>\n \u201cThe precinct will be part of the $10 billion \u2018Aerotropolis\u2019 economic hub, delivering jobs, homes, infrastructure, and services.<\/p>\n
<\/p>\n \u201cIn the past two years, Penrith\u2019s property market received a \u2018ripple effect\u2019 from the growth in Sydney, with most suburbs experiencing double-digit annual growth in median prices in recent years.\u201d<\/p>\n
<\/p>\n Ms Hill said the area was ideal for rentvesters or homebuyers with slightly higher budgets.<\/p>\n
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Median rents and % increase in 2021<\/span><\/p>\n![\"House](\"https:\/\/www.apimagazine.com.au\/media\/1001650\/House-rental-rates-map.jpg\")
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![\"Investor](\"https:\/\/www.apimagazine.com.au\/media\/1001650\/regions-with-the-biggest-percentage-increase-in-investor-purchases.jpg\")
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