Cairns Post: Bungalow Tops List for Rental Returns

BUNGALOW has topped the list for the highest rental yields for units in the Far North.

According to RP Data figures, released this month, Bungalow in Cairns, recorded a 7.7 per cent gross rental yield in the past year.

Properties at Manoora and Cooktown outperformed the rest in the housing market revealing an average rental yield of 6.2 per cent.

LJ Hooker Edge Hill property manager Amanda Boccalatte said she was initially surprised Bungalow recorded the highest return but narrowed it down to the large number of units in the suburb.

"Sale prices are low but the rents haven't dropped," she said.

"You could buy a unit (at Bungalow) in 1998 for low to mid-$200,000s and you would be getting $220-$240 in rent (weekly)."

Ms Boccalatte said unit sale prices were now $50,000 to $100,000 less but rents were still the same.

With two-bedroom units in demand, Ms Boccalatte believed it was a good time for investors to enter the market.
"It's a great time to invest, prices are low and you are getting a great return," she said.

"Body corporate fees are high but really when you look at the rental return (7.7 per cent), you wouldn't have seen that for the last 10 years."

But Kylie Fullerton, of Taylor Jones Property, said it may not be the best time to rush out to buy a property based on positive rental yields.

While the rental market appeared to be tightening, she was wary to generalise because of a lack of consistency around statistics.

"The rental pool is shrinking," she said.

Ms Fullerton said while interest rates and property prices remained low, investors needed to factor in high insurance premiums and body corporate fees.

"There is a demand for four-bedroom houses with two bathrooms (and) we are finding people are wanting relatively new houses," she said.

Indicative gross rental yields are based on the average annual rent divided by the median sale price in each suburb in the past year.

THE TOP 10 RENTAL YIELDS

UNITS
Bungalow - 7.7 per cent
Woree - 7.2 per cent
Parramatta Park - 7.2 per cent
Port Douglas - 7.1 per cent
Edge Hill - 6.9 per cent
Yorkeys Knob - 6.6 per cent
Holloways Beach - 6.6 per cent
Mooroobool - 6.5 per cent
Westcourt - 6.5 per cent
Manoora - 6.4 per cent

HOUSES
Manoora - 6.2 per cent
Cooktown - 6.2 per cent
Caravonica - 6.1 per cent
Manunda - 5.9 per cent
East Innisfail - 5.9 per cent
Babinda - 5.8 per cent
Bungalow - 5.8 per cent
Cardwell - 5.7 per cent
Craiglie - 5.7 per cent
Westcourt - 5.6 per cent

Article printed by The Cairns Post - 24th July 2012
Writer: Bianca Keegan

Peter Musso licensed real estate agent at Ray White Cairns Beaches selling property in Cairns' beautiful northern beach suburbs including Trinity Beach, Kewarra Beach, Clifton Beach, Palm Cove, Trinity Park, Smithfield, Yorkeys Knob, Holloways Beach, Machans Beach, Caravonica and surrounds.