Good buy-to-let opportunities in Australia

Thursday, May 26, 2011

Good buy-to-let opportunities in Australia

The recent halt in Australia property price growth doesn't mean that there aren't still plenty of property investment opportunities in the country, particularly in the buy-to-let sector.

Although the average price of a home in Australia fell by 0.4 percent in the first quarter of this year and 2.1 per cent year-on-year, average rental rates have appreciated by 4.6 per cent, according to statistics released by RP Data-Rismark.

The highest yields can be achieved in Darwin, where apartments achieve an average return of 5.7 per cent, followed by apartments in Hobart and Canberra at 5.4 per cent, Brisbane with 5.2 per cent and Sydney 5.1 per cent.

Tim Lawless, research director at RP Data, commented: "In contrast to the fall in home values, gross rental yields have been improving with apartments and houses now delivering a gross return of 4.9% and 4.2%, respectively, in March 2011 according to RP Data-Rismark's estimates."

He added: "With household incomes growing at 6% pa, interest rates potentially approaching the peak of the tightening cycle, rents increasing, and house values going nowhere, buyers are seeing an improvement in their position. First time buyers are now representing a bit less than 15% of all owner occupier housing finance commitments."

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