Investors are re-entering the market to capitalise on rising weekly rents and yields driven by increased rental demand and a shortage in supply. In select suburbs, they will find great returns from their investments with rental incomes covering the cost of mortgage repayments.
According to the Australian Bureau of Statistics, new loans to investors increased by 25% in the June quarter compared to the same period last year.
This reflects the return of investors following their exits during the pandemic.
Investors have been driven by the strong growth in weekly rents, which has contributed to higher yields on the properties they have purchased. National weekly rents are up 9.1% from June 2023 and yields have risen from 4.1% to 4.3% over the same period.
Interest rates are at their highest in 12 years, but have stabilised and are expected to fall by early next year. Rent growth has also outpaced home price growth over the last 12 months, making conditions increasingly favourable for investors.
While many of them are benefiting from the current market, those with properties in select suburbs are not only seeing their rental income cover their mortgage but also deliver positive cash flow.
| Suburb | Property type | Median sale price | Monthly advertised rent | Monthly mortgage repayments | Gross monthly return |
| South Lismore | House | $280,000 | $2,000 | $1,418.78 | $581.22 |
| Broken Hill | House | $180,000 | $1,320 | $912.07 | $407.93 |
| Cobar | House | $212,500 | $1,280 | $1,076.75 | $203.25 |
| Wellington | House | $290,000 | $1,600 | $1,469.45 | $130.55 |
| Lismore | House | $390,000 | $2,000 | $1,976.16 | $23.84 |
| Boggabri | House | $315,000 | $1,600 | $1,596.13 | $3.87 |
In New South Wales, investors who rented out their houses in South Lismore and Broken Hill had the largest positive cashflow in the state. The monthly rent they received offset the cost of their mortgage and provided them with an additional income of $581 and $408, respectively.
Houses in Cobar, Wellington and Lismore also proved to be good suburbs to invest in being among just 6 suburbs in regional NSW where rents covered mortgage repayments.
There were no suburbs in Sydney where this occurred, which is unsurprising considering home prices are highest in our largest city.
| Suburb | Property type | Median sale price | Monthly advertised rent | Monthly mortgage repayments | Gross monthly return |
| Carlton | Unit | $390,000 | $2,200 | $1,976.16 | $223.84 |
| Travancore | Unit | $371,000 | $2,040 | $1,879.88 | $160.12 |
| Rochester | House | $310,000 | $1,720 | $1,570.79 | $149.21 |
| Notting Hill | Unit | $370,440 | $1,990 | $1,877.05 | $112.95 |
In Victoria, Carlton, Travancore and Notting Hill were prime suburbs for investors with rental earnings not only offsetting but exceeding the cost of mortgage repayments by $100-$200.
Rochester was the only suburb in our second largest state where owning a home provided these positive investment returns.
| Suburb | Property type | Median sale price | Monthly advertised rent | Monthly mortgage repayments | Gross monthly return |
| Moranbah | Unit | $285,000 | $2,600 | $1,444.12 | $1,155.88 |
| Moranbah | House | $348,000 | $2,480 | $1,763.34 | $716.66 |
| Collinsville | House | $160,000 | $1,420 | $810.73 | $609.27 |
| Moura | House | $221,500 | $1,600 | $1,122.36 | $477.64 |
| Dysart | House | $210,000 | $1,520 | $1,064.08 | $455.92 |
| Mount Morgan | House | $211,000 | $1,520 | $1,069.15 | $450.85 |
| Idalia | Unit | $275,000 | $1,760 | $1,393.44 | $366.56 |
| Cranbrook | Unit | $197,000 | $1,360 | $998.21 | $361.79 |
| Blackwater | House | $220,000 | $1,460 | $1,114.76 | $345.24 |
| Manunda | Unit | $230,000 | $1,480 | $1,165.43 | $314.57 |
| Emerald | Unit | $220,000 | $1,400 | $1,114.76 | $285.24 |
| Bungalow | Unit | $230,000 | $1,440 | $1,165.43 | $274.57 |
| Hermit Park | Unit | $225,000 | $1,400 | $1,140.09 | $259.91 |
| Rockhampton City | House | $273,000 | $1,640 | $1,383.31 | $256.69 |
| Miles | House | $297,500 | $1,760 | $1,507.45 | $252.55 |
| Douglas | Unit | $290,000 | $1,680 | $1,469.45 | $210.55 |
| Mundingburra | Unit | $245,000 | $1,450 | $1,241.43 | $208.57 |
| Pimlico | Unit | $237,000 | $1,400 | $1,200.90 | $199.10 |
| Charters Towers City | House | $240,000 | $1,400 | $1,216.10 | $183.90 |
| Ingham | House | $240,000 | $1,400 | $1,216.10 | $183.90 |
| Cannonvale | Unit | $374,750 | $2,080 | $1,898.88 | $181.12 |
| South Mackay | Unit | $281,750 | $1,600 | $1,427.65 | $172.35 |
| Glen Eden | Unit | $307,500 | $1,720 | $1,558.12 | $161.88 |
| North Mackay | Unit | $255,000 | $1,440 | $1,292.10 | $147.90 |
| Mackay | Unit | $295,000 | $1,640 | $1,494.79 | $145.21 |
| Aitkenvale | Unit | $252,250 | $1,420 | $1,278.17 | $141.83 |
| Woree | Unit | $250,000 | $1,400 | $1,266.77 | $133.23 |
| Townsville City | Unit | $369,500 | $2,000 | $1,872.28 | $127.72 |
| Gladstone Central | Unit | $280,000 | $1,520 | $1,418.78 | $101.22 |
| West Mackay | Unit | $320,000 | $1,720 | $1,621.46 | $98.54 |
| Berserker | House | $336,000 | $1,800 | $1,702.54 | $97.46 |
| Longreach | House | $250,000 | $1,360 | $1,266.77 | $93.23 |
| Rosslea | Unit | $266,500 | $1,440 | $1,350.37 | $89.63 |
| Cairns North | Unit | $330,000 | $1,760 | $1,672.13 | $87.87 |
| Edge Hill | Unit | $300,000 | $1,600 | $1,520.12 | $79.88 |
| South Townsville | Unit | $350,000 | $1,840 | $1,773.47 | $66.53 |
| Clifton Beach | Unit | $370,000 | $1,940 | $1,874.82 | $65.18 |
| Manoora | Unit | $280,000 | $1,480 | $1,418.78 | $61.22 |
| Proserpine | House | $422,500 | $2,200 | $2,140.84 | $59.16 |
| Chinchilla | Unit | $245,000 | $1,300 | $1,241.43 | $58.57 |
| Berserker | Unit | $281,750 | $1,480 | $1,427.65 | $52.35 |
| Port Douglas | Unit | $425,000 | $2,200 | $2,153.51 | $46.49 |
| Kirwan | Unit | $285,000 | $1,480 | $1,444.12 | $35.88 |
| White Rock | Unit | $374,375 | $1,920 | $1,896.98 | $23.02 |
| Tully | House | $272,500 | $1,400 | $1,380.78 | $19.22 |
| Park Avenue | House | $360,000 | $1,840 | $1,824.15 | $15.85 |
| East Mackay | Unit | $349,000 | $1,780 | $1,768.41 | $11.59 |
| Vincent | House | $345,750 | $1,760 | $1,751.94 | $8.06 |
| Ayr | House | $275,000 | $1,400 | $1,393.44 | $6.56 |
While there were no suburbs in Brisbane where rental income covered mortgage costs, there were an exceptional 50 suburbs that did in regional Queensland.
Owners of houses and units in Moranbah had the best investment outcomes in Queensland. They were able to fully cover their monthly mortgage obligations with rental income, while additionally securing $1,100 and $717, respectively.
Collinsville, Moura, and Dystart were also among some of the prime suburbs for people who invested in houses in our third largest state.
| Suburb | Property type | Median sale price | Monthly advertised rent | Monthly mortgage repayments | Gross monthly return |
| Roxby Downs | House | $282,500 | $1,560 | $1,431.45 | $128.55 |
| Whyalla Norrie | House | $215,080 | $1,200 | $1,089.83 | $110.17 |
| Port Augusta | House | $220,000 | $1,200 | $1,114.76 | $85.24 |
| Port Pirie South | House | $290,000 | $1,520 | $1,469.45 | $50.55 |
| Risdon Park | House | $269,000 | $1,400 | $1,363.04 | $36.96 |
| Whyalla Stuart | House | $217,000 | $1,120 | $1,099.55 | $20.45 |
In South Australia, investors of houses in Roxby Downs and Whyalla Norrie benefitted most from the current market. The rental income they received not only offset their mortgage repayments but also provided them an additional $110-$130 per month.
| Suburb | Property type | Median sale price | Monthly advertised rent | Monthly mortgage repayments | Gross monthly return |
| Baynton | House | $682,500 | $5,600 | $3,458.28 | $2,141.72 |
| Nickol | House | $570,000 | $4,700 | $2,888.23 | $1,811.77 |
| Millars Well | House | $480,000 | $3,800 | $2,432.19 | $1,367.81 |
| Pegs Creek | House | $491,250 | $3,800 | $2,489.20 | $1,310.80 |
| Bulgarra | House | $500,000 | $3,800 | $2,533.54 | $1,266.46 |
| Port Hedland | House | $730,000 | $4,900 | $3,698.96 | $1,201.04 |
| South Hedland | Unit | $320,500 | $2,800 | $1,624.00 | $1,176.00 |
| Somerville | Unit | $282,000 | $2,440 | $1,428.91 | $1,011.09 |
| Newman | House | $326,000 | $2,600 | $1,651.87 | $948.13 |
| Port Hedland | Unit | $474,396 | $3,200 | $2,403.80 | $796.20 |
| West Lamington | House | $399,000 | $2,790 | $2,021.76 | $768.24 |
| Boulder | House | $300,000 | $2,200 | $1,520.12 | $679.88 |
| South Hedland | House | $499,500 | $3,200 | $2,531.00 | $669.00 |
| Hannans | House | $464,000 | $3,000 | $2,351.12 | $648.88 |
| Kambalda West | House | $180,000 | $1,520 | $912.07 | $607.93 |
| Kalgoorlie | Unit | $275,000 | $2,000 | $1,393.44 | $606.56 |
| Kalgoorlie | House | $355,750 | $2,400 | $1,802.61 | $597.39 |
| Piccadilly | House | $368,000 | $2,400 | $1,864.68 | $535.32 |
| Cable Beach | House | $670,000 | $3,930 | $3,394.94 | $535.06 |
| South Kalgoorlie | House | $330,000 | $2,200 | $1,672.13 | $527.87 |
| Merredin | House | $190,000 | $1,480 | $962.74 | $517.26 |
| Somerville | House | $558,000 | $3,280 | $2,827.43 | $452.57 |
| Cable Beach | Unit | $390,000 | $2,400 | $1,976.16 | $423.84 |
| Orelia | Unit | $230,000 | $1,520 | $1,165.43 | $354.57 |
| Lamington | House | $435,000 | $2,520 | $2,204.18 | $315.82 |
| East Cannington | Unit | $389,500 | $2,240 | $1,973.62 | $266.38 |
| Hamilton Hill | Unit | $382,500 | $2,200 | $1,938.15 | $261.85 |
| Glendalough | Unit | $347,000 | $2,000 | $1,758.27 | $241.73 |
| Ascot | Unit | $425,000 | $2,390 | $2,153.51 | $236.49 |
| Rangeway | House | $245,000 | $1,440 | $1,241.43 | $198.57 |
| Cloverdale | Unit | $395,000 | $2,200 | $2,001.49 | $198.51 |
| Spearwood | Unit | $372,500 | $2,080 | $1,887.48 | $192.52 |
| Thornlie | Unit | $330,000 | $1,860 | $1,672.13 | $187.87 |
| East Victoria Park | Unit | $413,500 | $2,280 | $2,095.23 | $184.77 |
| Spalding | House | $280,000 | $1,600 | $1,418.78 | $181.22 |
| Wembley | Unit | $340,000 | $1,900 | $1,722.80 | $177.20 |
| Balga | Unit | $376,000 | $2,040 | $1,905.22 | $134.78 |
| Cannington | Unit | $409,000 | $2,200 | $2,072.43 | $127.57 |
| Perth | Unit | $465,000 | $2,480 | $2,356.19 | $123.81 |
| Bayswater | Unit | $370,000 | $1,980 | $1,874.82 | $105.18 |
| Katanning | House | $257,500 | $1,400 | $1,304.77 | $95.23 |
| Collie | House | $339,000 | $1,800 | $1,717.74 | $82.26 |
| Armadale | Unit | $375,000 | $1,980 | $1,900.15 | $79.85 |
| Mosman Park | Unit | $380,000 | $2,000 | $1,925.49 | $74.51 |
| Bassendean | Unit | $420,000 | $2,200 | $2,128.17 | $71.83 |
| Withers | House | $397,500 | $2,080 | $2,014.16 | $65.84 |
| Kewdale | Unit | $425,000 | $2,200 | $2,153.51 | $46.49 |
| Midland | Unit | $370,000 | $1,920 | $1,874.82 | $45.18 |
| Northam | House | $315,000 | $1,640 | $1,596.13 | $43.87 |
| Northbridge | Unit | $465,000 | $2,400 | $2,356.19 | $43.81 |
| Cockburn Central | Unit | $410,000 | $2,120 | $2,077.50 | $42.50 |
| East Perth | Unit | $485,000 | $2,500 | $2,457.53 | $42.47 |
| Djugun | House | $702,500 | $3,600 | $3,559.62 | $40.38 |
| Belmont | Unit | $427,000 | $2,200 | $2,163.64 | $36.36 |
| Queens Park | Unit | $430,050 | $2,200 | $2,179.09 | $20.91 |
| Nollamara | Unit | $433,500 | $2,200 | $2,196.58 | $3.42 |
| South Bunbury | Unit | $410,000 | $2,080 | $2,077.50 | $2.50 |
Western Australia led all states with the highest number of suburbs where rents covered mortgage repayments. This has resulted in the state having the strongest growth in investor lending, which increased by 48% in the June 2024 quarter compared to the same period in 2023.
Baynton and Nickol, both mining suburbs in regional WA took the top spot for investment earnings. Investors were able to meet their monthly mortgage obligations with $2100 and $1800 to spare respectively.
Those with properties in Millars Well and Pegs Creek also saw profitable outcomes from their rental investments.
Queenstown was the only suburb in Tasmania where rental income covered mortgage repayments, with monthly rent of $1,200 offsetting mortgage costs of $996.
| Suburb | Property type | Median sale price | Monthly advertised rent | Monthly mortgage repayments | Gross monthly return |
| Parap | Unit | $380,000 | $2,300 | $1,925.49 | $374.51 |
| Bakewell | Unit | $284,000 | $1,800 | $1,439.05 | $360.95 |
| Johnston | Unit | $342,500 | $2,080 | $1,735.47 | $344.53 |
| Rosebery | Unit | $345,000 | $2,080 | $1,748.14 | $331.86 |
| Larrakeyah | Unit | $420,000 | $2,400 | $2,128.17 | $271.83 |
| Gillen | Unit | $292,500 | $1,680 | $1,482.12 | $197.88 |
| Zuccoli | House | $515,000 | $2,800 | $2,609.54 | $190.46 |
| Gray | House | $397,500 | $2,200 | $2,014.16 | $185.84 |
| Darwin City | Unit | $440,000 | $2,400 | $2,229.51 | $170.49 |
| Leanyer | Unit | $360,000 | $1,920 | $1,824.15 | $95.85 |
| Nightcliff | Unit | $360,000 | $1,920 | $1,824.15 | $95.85 |
| Coconut Grove | Unit | $370,000 | $1,960 | $1,874.82 | $85.18 |
| Karama | House | $447,500 | $2,320 | $2,267.51 | $52.49 |
| Woodroffe | House | $427,000 | $2,200 | $2,163.64 | $36.36 |
| Stuart Park | Unit | $445,000 | $2,290 | $2,254.85 | $35.15 |
| Moulden | House | $390,000 | $2,000 | $1,976.16 | $23.84 |
| Bayview | Unit | $570,000 | $2,910 | $2,888.23 | $21.77 |
| Gillen | House | $463,500 | $2,360 | $2,348.59 | $11.41 |
Investors of units in Parap and Bakewell received the highest positive cashflow in the Northern Territory. Their rental income was $375 and $360 greater than their mortgage repayments.
Johnston and Rosebery were also prime investment suburbs in the state.
There were no suburbs in the ACT where rental income offset mortgage repayments.
With rents expected to rise further, albeit at a slower rate than in the previous two years, we anticipate the continued return of investors to the market as they look to leverage higher yields and gains from their properties.
This trend is not only positive news for investors but also for renters as the increase in investors signifies improvements in rental availability and a step towards a more balanced market.
