With sleek finishes and more than a touch of luxury, you could be forgiven for thinking you were in the heart of Sydney. But this exclusive penthouse apartment is at The Mill and there’s a line of people keen to make it their home.
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At $600 per week, Wagga’s most expensive rental is closer to Parramatta pricing than most properties, but it’s also a sign of strength in the market according to Professionals managing director Paul Irvine.
“It’s up in the higher end (for rents) but we’ve already got inspections booked,” Mr Irvine said. “There’s a pretty good setup there, you’ve got Lonestar, the Pig and Pastry and you’re close to the shops. We’ve got nothing left for lease in the building and I even have people consistently asking to let them know if anything comes up.”
According to data from Australian Property Monitors (APM), rental yields for units in central Wagga had risen by 5.2 per cent in the past 12 months, while unit sale prices had jumped by 19.1 per cent.
Mr Irvine talked up the rental market, saying returns on investment made it an attractive proposition.
“The rental vacancy rate is low and simple supply and demand means the prices are up,” he said. “You can buy your average three-bedroom house for $280,000 to $320,000 and lease it out for $350 to $380 per week. That’s a gross return of about 6 per cent.”
Independent property valuer Chris Egan agreed with Mr Irvine’s assessment and said once outgoing expenses were taken into account, landlords could expect a 4.5 per cent return on investment – better than the banks offered.
“You can’t get a rate like that with cash in the bank,” Mr Egan said. “When you look at Wagga’s average house price compared to Sydney you can get three houses here for the price of one and spread your risk. But we don’t get the big whack of capital gains they get in Sydney, so there’s a trade-off.”
While Mr Irvine said he would be more likely to invest in a rental property at Lake Albert or Kooringal, Mr Egan said there was untapped potential in another niche market.
“Since we’ve got a higher transient population than other regional centres, there’s a lot of money to be made in fully-furnished short to medium term accommodation,” he said. “Something like a boutique inner-city hotel would be highly sought after.”