The post-COVID 19 real estate markets have produced excellent returns for investors, particularly those with quality, well-located houses.
While houses are attracting all the plaudits, savvy investors would still do well to note the strong yields offered by apartment markets. For example, in Crows Nest, an investment market hotspot on the Lower North Shore of Sydney, research from CoreLogic shows that the gross yield for houses is a tick under 2.5% compared to 3.1% for apartments.
Likewise, in Unley, in inner-city Adelaide, the gross yield for houses is just above 3%, while the gross yield for apartments is closer to 4.7%. Moreover, apartments and units usually offer an affordable entry point into the investment market than houses. The lower outlay can also mean fewer risks and more investment choice. For example, the median house price in Crows Nest is closer to $2.2 million, while the median for apartments is less than half that figure. In Unley, CoreLogic reports the median price for an apartment is $565,000 compared to $1.05 million for houses.
There is also talk that some renters who have moved out of the capital cities because they could work from home might be forced to return as more employers request more hours in the office. If this situation eventuates and international students also begin to return to Australia as travel bubbles evolve, demand for rental apartments closer to universities in the capital cities will start to rebound, and investment yields will improve in the first instance.
Another significant benefit of owning an apartment or unit is that everyone in the building shares the expense of insurance and upkeep. Moreover, an owner’s corporation, also known as a body corporate, oversees the common areas of the apartment building. Also, paying annual fees levies such as body corporate fees may make your investment property more straightforward to manage.
To find out more about investment yields in a suburb or town, contact your local Raine & Horne Property Manager.