- Quality investments in great locations still within reach for investors with an $100,000 deposit, despite looming price increases
- Suburbs in NSW have dominated the top 20 chart, with Safety Beach ranking first and seven other areas following
- Buying below a 20% deposit may leave you paying more, but simply entering the market could outweigh the negatives says Alex Veljancevski
New research has determined the top 20 Australian suburbs showcasing great investment potential for investors with access to a $100,000 deposit.
The research, commissioned by Sydney-based mortgage broker Eventus Financial, revealed the names of the suburbs in their quarterly $100k Investment Report.
The Investment Report aims to examine all Australian suburbs to uncover which markets suit Australian investors with a $100k deposit and the ability to purchase a property up to the value of $1 million.
The report is exclusive to house markets only, as houses are a much stronger prospect for long-term capital gains than units.
Suburbs are excluded from the shortlist if the median for a 3-bed house is over $1 million, the vacancy rate is 1.5% or above, and the yield is 3% or below, among other factors.
Quality investments within reach despite price boom
Of the small list of suburbs that avoided exclusion, the top 20 suburbs for investors with a $100k deposit were determined based on the percentage of properties sold in the area for a profit.
The remaining top 20 suburbs were spread across New South Wales, Victoria, Queensland, South Australia and Tasmania, with New South Wales dominating the list at eight suburbs.
The most accessible area within the list had a 3-bed median of just $460,000, meaning an investor could potentially enter the market for a 10% deposit of $46,000.
Eventus Financial CEO Alex Veljancevski emphasised that despite predictions of property prices going through the roof, a quality investment property in a respectable suburb for as much as a $100,000 deposit is still within reach for innovative investors.
“If you want to put down a 20% deposit on a house close to the centre of a major capital city, you’ll need much more than a $100,000 deposit.”
Alex Veljancevski, Eventus Financial CEO
“But if you’re willing to be open-minded about your loan-to-value ratio and location, you can definitely buy a good investment property with a $100,000 deposit,” Mr Veljancevski said.
Top 20 suburbs with investment potential for under $100k deposit
Ranking as the Australian suburb with the greatest investment potential was the picturesque seaside town of Safety Beach, located in New South Wales.
Investors can enter the housing market here for as little as a deposit of $76,500, and can expect an approximate yield of 4.1%.
Houses in Safety Beach sell quickly, with an average time on the market of 22 days and an impressive median weekly rent of $600.
It seems coastal areas are in high demand, with the Victorian semi-rural town of Tyabb following closely behind in second place.
The town, located on the Mornington Peninsula, has a median price of $715,000 for a 3-bed house, a median yield of 3.6%, and a median weekly rent of $500.
| Rank | State | Suburb | Median price (3-bed house) | 10% deposit | Yield |
| 1 | NSW | Safety Beach | $765,000 | $76,500 | 4.1% |
| 2 | VIC | Tyabb | $715,000 | $71,500 | 3.6% |
| 3 | NSW | Valley Heights | $736,200 | $73,620 | 3.5% |
| 4 | VIC | Belgrave | $755,000 | $75,500 | 3.4% |
| 5 | NSW | Millthrope | $637,000 | $63,700 | 3.7% |
| 6 | VIC | Tecoma | $815,000 | $81,500 | 2.9% |
| 7 | NSW | Kariong | $852,676 | $85,268 | 3.4% |
| 8 | NSW | Wickham | $760,000 | $76,000 | 3.8% |
| 9 | NSW | Medowie | $700,000 | $70,000 | 4.0% |
| 10 | VIC | Sandhurst | $950,000 | $95,000 | 3.1% |
| 11 | QLD | Reedy Creek | $988,000 | $98,800 | 4.3% |
| 12 | QLD | Lower Beechmont | $610,000 | $61,000 | 4.3% |
| 13 | TAS | Riverside | $501,000 | $50,100 | 4.6% |
| 14 | NSW | Ropes Crossing | $795,000 | $79,500 | 3.4% |
| 15 | TAS | Park Grove | $460,000 | $46,000 | 4.6% |
| 16 | NSW | Tarago | $530,000 | $53,000 | 4.9% |
| 17 | QLD | Gilston | $850,000 | $85,000 | 4.0% |
| 18 | SA | Flagstaff Hill | $627,500 | $62,750 | 4.1% |
| 19 | QLD | Wellington Point | $756,000 | $75,600 | 4.0% |
| 20 | QLD | Robina | $901,500 | $90,150 | 4.0% |
Source: Eventus Financial
Predicted market surge could alleviate pressures of buying below 20% deposit
Mr Veljancevski acknowledged however, that investors putting down a deposit of less than 20% could potentially be disadvantaged.
“If your deposit is less than 20%, you’ll probably have to pay lender’s mortgage insurance, or LMI, which is an insurance policy designed to protect the lender in case you default.
“That might be more than $20,000, which is a lot of money,” he said.
Despite this, Mr Veljancevski emphasised that this may only be a small price to pay, outweighed by the benefits of entering the property market ahead of the predicted price rises.
“But if paying LMI were to allow you to enter the market a couple of years ahead of schedule, it might seem like a bargain if property prices were to increase, say, $50,000 in that time.”
Alex Veljancevski, Eventus Financial CEO
He also acknowledged that prospective buyers may be eligible to access financial assistance that can further alleviate the financial pressures of buying below the expected 20% deposit.
“If you’re a first home buyer, you might also be able to qualify for first home buyer
assistance, depending on which state you live in and the rules of your state’s scheme,” Mr Veljancevski concluded.
