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Want a property that delivers both cash flow and capital growth? These are the country’s top locations.
Real estate analysis firm Hotspotting has revealed Australia’s top six regions for investors on the hunt for affordable properties that deliver on cash flow without sacrificing long-term value growth.
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“Smart investors understand that cash flow alone may help pay the mortgage, but it won’t make a huge difference to your overall wealth creation efforts in the long run,” said Terry Ryder, director at Hotspotting.
“In days gone by, investors often felt they needed to sacrifice capital growth for cash flow – and vice versa – but that is no longer the case,” he said.
Around the country, strong migrations levels are priming many communities – both urban and regional – for steady market growth over the coming decades.
When it comes to predicting sustainable cash flow, a high rental yield alone is not enough: many high-yield markets are volatile and risky for investors to enter.
According to Hotspotting, the best locations for sustainable future growth have diverse economies, good existing and emerging infrastructure, job growth and affordable house prices.
Hotspotting’s general manager, Tim Graham, stressed that the firm’s top six locations boasted diverse local economies, solid population growth forecasts, and are benefitting from “billions of dollars of major infrastructure projects that are underway or completed”.
And regional markets continue to offer rich investment opportunities, with rising housing costs fuelling ongoing “strong internal and interstate migration around the nation”.
Here are Hotspotting’s top six locations for cash flow and capital growth.
1. Berserker, Qld
Located a short drive from the Rockhampton city centre, the Central Queensland suburb of Berserker offers investors a winning combination of strong population growth and affordable housing.
Rockhampton itself is on the up, with its central business district in the midst of a revitalisation project, and $1 billion being spent on road infrastructure projects in the region.
More extensive community investments, in the form of a $2.5 billion Shoalwater Bay Military Training Centre redevelopment and $495 million Lower Fitzroy River weir, make Berserker a strong contender for those wanting both short-term and long-term benefits.
2. Moulden, NT
Up in the Northern Territory, the small community of Moulden might seem unassuming, but it is primed to benefit from over $40 billion of investment in local infrastructure.
An outer suburb of Palmerston, Moulden is seeing investment in a vast array of industries, from defence to education to renewable energy and aquaculture. The defence sector will see $2.3 billion in miscellaneous projects plus the $510 million Larrakeyah Barracks.
In energy, there is the $4.7 billion Barossa gas project and the $30 billion Australia-ASEAN PowerLink solar project. Charles Darwin University is set for a $250 million expansion, prawn aquaculture will see $2.1 billion for Project Sea Dragon, and a $1 billion new suburb is also on the agenda.
All this is on offer only 24 kilometres from Darwin, making Moulden a strong option for investors keen to head north.
3. Armadale, WA
Armadale, in Perth’s south-east fringe, is another prospect that offers both capital growth in the long-term and strong rental yields.
Housing in Armadale is affordable and population growth is strong, while a plethora of large industrial areas in the local area offer plenty of job options for residents.
Armadale investors can also take advantage of a range of burgeoning upgrades to local infrastructure, namely a $4 billion container port, $1 billion hydrogen port, $635 million rail line and station, and $237 million upgrade to Armadale Road.
4. West Tamworth, NSW
Looking further east, the northern NSW town of Tamworth is a major transport hub, with an airport that offers daily flights to both Sydney and Brisbane.
The town is currently set for a $210 million upgrade to the local hospital, $1.3 billion Dungowan Dam project, and $3.6 billion Narrabri Gas project.
The University of New England is also getting ready to build a $37 million campus in Tamworth – the town is forecast to be a regional freight hub in the future.
This diverse array of projects make Tamworth a strong choice for those seeking stable future growth for their properties.
5. Salisbury North, SA
Salisbury North is 25 kilometres north of Adelaide’s city centre, and offers excellent investment opportunities both now and in the years to come.
As well strong existing train links, Salisbury North will see $885 million be injected into redeveloping its transport corridor, plus the electrification of the Gawler train line.
The suburb is also forecast to see $1.9 billion invested into the Edinburgh Parks Precinct, a $240 million health hub, a $250 million Holden site and over $4 billion worth of defence projects.
6. Mooroopna, Vic
Mooroopna is a suburb of Greater Shepparton, and lies on the banks of the Goulburn River. According to Hotspotting, it benefits from a double whammy advantage of affordable prices and low vacancies, making it attractive to investors who want bang for their buck.
But Mooroopna’s good rental yields won’t need to come at the expensive of capital growth, with the area set to thrive.
Transport is a particular focus for investment, with a $1.3 billion Shepparton Bypass, $100 million freight hub and $757 million in rail upgrades all on the cards.
The $230 million upgrade to the local hospital, combined with the suburb’s good population growth trajectory, prime Mooroopna investors for success.
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