Best Suburbs To Invest In The Hunter Valley
The Hunter Valley is one of Australia's most renowned wine-country regions, only two hours north of Sydney by car. It’s also been the beneficiary of the largest population growth trends across the country over the last 10-15 years, meaning the level of infrastructure development has skyrocketed. This presents a great opportunity for investors looking for a secure & stable location for their next investment.
This article outlines what our local experts consider when advising clients on the best suburbs to invest in The Hunter Valley. We break things down by price brackets to help you find the perfect match for your budget and investment goals.
Investment Fundamentals
Before we list our suburb recommendations, it's key to outline some fundamental aspects of buying an outperforming property, regardless of the location. These factors are general rules of thumb that we apply to ensure we’re not buying just an average property in a suburb but instead finding the best-performing properties on the best streets.
Focus on scarcity: We look for properties that are hard to replicate in areas with little to no vacant land for future building. Think character-filled homes in established suburbs. This is critical to avoiding stagnant house price growth.
Understand Owner Occupier Appeal: 70% of the market are owner-occupiers, so think and buy like one. If you think the bedrooms are too small, so will your tenant and future buyer. A below-average property will attract a below-average tenant.
Buy on the north side of the street: This is common sense, but only after it’s pointed out. Buying on the north side of the street opens the property up to more natural light, making the property more desirable to live in.
These, along with over 20 other factors, are what we look for in the perfect investment property for our clients.
So, which locations are the best within The Hunter Valley?
Investment Budget: $500,000 - $650,000
Cessnock
Cessnock is an excellent choice for investors with a $500,000 to $700,000 budget. This suburb offers three-bedroom family homes in quiet streets with capital growth ranging from 5.8% to 6.0% per annum over the last decade. Rental returns in Cessnock are around 4.4% to 4.6% per annum, making it a stable investment with solid growth potential. We have also identified that Cessnock can be a great place for a dual-income strategy, where our clients are looking to build a Granny Flat & increase the yield to 5.8-6%.
Kurri Kurri
Kurri Kurri is another suburb within this price bracket that provides similar investment opportunities. With strong community amenities, schools, and parks, Kurri Kurri attracts families, ensuring a steady rental demand. The capital growth here has also been impressive, aligning closely with Cessnock.
Raymond Terrace
Raymond Terrace offers investors affordable family homes with good returns. Its proximity to shopping centres and medical facilities makes it a desirable location for renters, however, we advise our clients to purchase only in specific pockets with low concentrations of public housing. This ensures that future tenants of the investment property will enjoy the area and remain tenants for longer periods of time. Over the past ten years, capital growth has been consistent in the 5.8-6% range, making it a reliable choice for property investment.
Investment Budget: $650,000 - $800,000
Tenambit
Tenambit is an attractive option for those with a slightly higher budget. The typical property type is a three-bedroom, one-bathroom, one-car-space property on a decent 500m2+ block of land. We particularly like the areas of Tenambit that border the suburb of Maitland, as sale prices can be lower than those sold in Maitland, even if they’re at opposite ends of the same street. Rental returns in Tenambit can range from 4.2% to 4.4% with capital growth between 6.0% and 6.2% per annum.
Maitland
Maitland, the bigger brother of Tenambit, has seen a significant disparity in property values compared to its neighbouring suburbs. It offers a similar return on investment with robust growth, especially in pockets near the Maitland Private Hospital & Greenhills Shopping Centre. Tenants particularly like the suburb name of Maitland, so long as the property is on a quiet street and comfortable. Remember this when making your investment decisions, and you’ll likely achieve rental returns in the vicinity of 4.3-4.5%.
Rutherford
Rutherford provides an excellent investment opportunity with its blend of older character homes and newer developments. The suburb's appeal lies in its family-friendly environment and proximity to local amenities. Rutherford has seen capital growth of around 6.0% per annum and offers rental returns of approximately 4.4%.
Investment Budget: $800,000+
East Maitland
East Maitland is a prime candidate for those seeking high-growth assets in The Hunter. This suburb offers freestanding houses on quiet tree-lined streets and is considered one of the region's most desirable ‘historical’ suburbs. This is because the age of the suburb allows most of its homes to hold significant scarcity & character when compared with the new housing estate suburbs such as Chisholm, Thornton & Hedon Greta. With growth rates ranging from 6.3% to 6.6% per annum over the last decade, East Maitland provides the highest returns for the lowest risk in this price bracket.
Chisholm
Chisholm is another high-growth suburb, but it comes with additional risks. Investors have historically flocked to Chisholm & other new housing estate suburbs due to the appeal of brand-new, high-depreciation properties. Whilst both aspects will aid in increasing the rental return, the ability for future suburbs to be built immediately next to these suburbs may impact future capital growth characteristics. That’s why we believe Chisholm is a great option for investors, where depreciation plays a role in the strategy. Buying existing homes closer to the infrastructure that Maitland & surrounds offer is a way of reducing the risk of oversupply causing subdued capital growth. Recent data indicates that rental returns in Chisholm can range from 4-4.4% per annum, and capital growth (depending on location) may be in the vicinity of 5-6.3% per annum, depending on future supply.
Thornton
Thornton is another great option for investors who are focusing on newer, lower-maintenance property options. We recommend our clients focus on the quieter neighbourhoods within the suburb, to ensure the best growth prospects. The capital growth rates here are likely between 5% and 6.4%, depending on supply, with rental yields around 4%.
Investing Under $500,000 in Hunter Valley
While challenging, buying an investment property for under $500,000 in The Hunter Valley is possible. This budget typically restricts buyers to older homes needing renovation or strata options. Suburbs like Singleton and Branxton offer more affordable entry points into the Hunter Valley market; however, they come with additional economic risk. If you’re looking for a job in the Hunter Valley with a budget of less than $500,000, contact your local buyer's agent for specific advice.
Conclusion
The Hunter Valley offers a range of suburbs suitable for various investment budgets, each with unique benefits and growth potential. From affordable family homes in through to higher value gems, there's a suburb worth investing in for a wide range of budgets. Understanding the local market and choosing the right suburb is key to a successful investment.
Ready to explore investment opportunities in The Hunter Valley? Contact us today to get a Chamberlain Brown Buyers Agent on your side.
