Complete Guide 2023.

Cardiff
Property Investment

Property Investment Cardiff 2023

Want to make a Cardiff property investment but don’t know where to start?

You’ve come to the right place.

This detailed beginner guide will reveal why you should invest in Cardiff in 2022.

We’ll also show you the best areas to buy property in the Welsh capital.

Let’s get into it:

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Why Invest In Cardiff?

You might be wondering:

Is Cardiff a good place to invest?

Previously a city suffering from economic decline, Cardiff (or Caerdydd as it’s better known in Wales) has quickly become one of the UK’s standout investment hotspots.

More affordable than other capitals, this South Wales city offers low property prices and high return potential in 2022.

So, should you consider investing in Cardiff?

Here are three reasons why Cardiff property investment is a top choice this year:

Why Now The Time Is To Invest.

Get Affordable Property Prices in Cardiff 

One of Cardiff property investment’s biggest draws is its affordable entry price.

As of April 2022, Cardiff’s average property price was £254,086 (Land Registry UK House Price Index)

Now:

That obviously doesn’t seem affordable.

In fact, Cardiff homes were more expensive than Newport (£226,869) and Swansea (£190,544) in April 2022.

But in the UK property market context, you’re getting a lot of bang for your buck here.

Not only is Cardiff cheaper than the UK average by about £27k, but it’s also lower than the capital cities of London (£529,829) and Edinburgh (£324,947).

While the city may not economically compete with the likes of London, the affordability of Cardiff property lends itself well to further capital growth (as you’ll see in the next section).

Unlock Huge Capital Growth Potential

Cardiff property prices have increased at an incredible rate over the last decade.

Between April 2020 and April 2022, the average Cardiff property price increased by almost £45,000 (21.48%).

And in the previous five and 10ten10 years, prices in the city increased by 32.15% and 64.86%, respectively.

Growth in the city compares well to other UK cities, as you can see in the table below.

City Average House Price 12-Month Price Growth Five-Year Price Growth 10-Year Price Growth
Belfast £152,603 6.75% 27.13% 60.13%
Swansea £190,544 15.42% 37.54% 59.42%
Newport £226,869 12.55% 45.29% 76.40%
Cardiff £254,086 11.35% 32.15% 64.86%
Edinburgh £324,947 11.55% 44.64% 62.81%
London £529,829 7.86% 10.22% 76.83%

Data: Land Registry UK House Price Index, April 2022.

Cardiff property investment registered a higher 12-month growth rate than Belfast and London but fell behind Swansea, Newport, and Edinburgh.

Meanwhile, Cardiff recorded the third-highest 10-year price growth out of the compared cities but finished fourth for five-year price growth.

So, what’s the bottom line?

While Cardiff’s capital growth isn’t the highest, those buying investment property in Cardiff stand to earn sizeable profits at a fair entry price.

Earn Huge Income With High Gross Rental Yields 

Cardiff is generating some impressive yields for income-focused property investors in 2023.

As of June 2023, the average gross rental yield in Cardiff was 6.81%.

For comparison, this was the second-highest out of the UK capital cities, and the second-highest in Wales.

Now:

Swansea recorded higher rental returns, higher capital growth, and better affordability than Cardiff in 2023.

So, does this mean you should choose Swansea over Cardiff?

Not exactly.

While average rental yields are a good indicator of property investment potential, it isn’t the be-all-end-all.

Simply put:

You aren’t investing in the average of an area.

This means you can earn far higher returns depending on what property you find and where you invest.

According to our research (which you’ll see in a later section), you can earn up to 10% returns in certain Cardiff postcodes.

This is an INCREDIBLY high return and outperforms top postcodes in cities like Liverpool, Manchester, Birmingham, and Leeds.

Download 2023 Property Investment Guide

Cardiff Property Price Forecast 2022 – 2026

Although there’s no way to accurately predict what will happen to Cardiff property prices (see Covid), we can make an informed guess based on what the experts think.

According to the latest predictions from JLL, Cardiff (and the rest of Wales) will see positive growth in the coming years.

JLL says Wales will see a 3.5% property price growth in 2022.

This is before a 3.5% rise in 2023 and a further 2% hike in 2024.

Overall, between 2022 and 2026, Welsh house prices will see an average growth of 2.8% per year.

  2022 2023 2024 2025 2026 Average growth per year
Wales 3.5% 3.5% 2.0% 2.5% 2.5% 2.8%

 

While any growth is welcome news to investors buying Cardiff investment properties, it’s not as high as in other UK regions.

In fact, this is the second WORST predicted rise, ahead only of the North East (2.7%).

So does this mean you shouldn’t invest in Cardiff?

Not exactly.

Fundamentally, while these growth levels can be a good indicator, the growth level you will see can be significantly different.

There’s no way to guarantee future growth.

And investing in somewhere like London doesn’t necessarily mean you’ll see higher growth than Cardiff.

It’ll depend on your investment property and the area you buy it in.

Are you interested in Cardiff property? View our complete guide.

Analysing The Cardiff Property Market

While looking at returns and market statistics can be exciting, it’s important to look deeper into the market.

Percentage returns can change daily:

You want to ensure a property market is sustainable for a long-term investment.

But how can you do this?

Demand for property (both rental and homebuying) is the primary catalyst for growth.

Therefore, you need to consider what helps promote demand and improve residents’ quality of living.

This includes thinking about a city’s infrastructure, job opportunities, amenities, and future regeneration – all of which we’ll discuss in the sections below:

Why Invest In The Cardiff
Property Market?

Cardiff has all the bells and whistles you’d come to expect from a capital city in a prime location.

Alongside regular bus routes and the nearby M4 motorway, the city of Cardiff also features train links and a suburban rail metro line.

For rail, the city is home to Cardiff Central and Cardiff Queen Street – the former being the 10th busiest station in the UK outside London.

The metro line is also expansive.

The Valley Lines metro connects Cardiff Central and Queen Street to over 106 stops across South Wales.

There’s even Cardiff Airport – the busiest Airport in Wales with 1.66 million annual passengers.

These links are set to get even better with the South Wales Metro project (but more on that later).

Need more information? Contact Ailium Invest today.

Most people move to cities for job opportunities.

Excitingly, Cardiff has a rapidly expanding economy with a strong employment sector.

While the Welsh capital’s economy can’t compete with the likes of Edinburgh and London, it has historically outpaced the growth in these capitals, as revealed in this 2017 BBC article.

Cardiff has an impressively diverse economy, with major health, ICT, tourism, TV, and education sectors.

But Cardiff’s biggest pull is its financial sector.

The city is Wales’ biggest financial services centre and accounts for 20% of Cardiff’s total workforce.

This sector, combined with Education, Health, and Administration, accounts for 75% of Cardiff’s economic growth over the last 30 years.

With multiple shopping centres, delicious restaurants, vast sports venues, and cultural hotspots, the quality of life in the Welsh capital is some of the UK’s best.

Shopping is centred on the bustling Queen Street, with great bars, restaurants, and the famed Victorian arcades all found in the area.

(Cardiff also has the best kebab shop in Wales, so there’s that too.)

For sports fans, the Principality Stadium (previously the Millennium Stadium) plays host to the Welsh rugby union and seats a whopping 74,000 people.

If that wasn’t enough, the iconic Cardiff Castle, the National Museum Cardiff, and Cardiff Bay, Europe’s largest waterfront development, are all on offer.

With so much to see and do, is it any wonder that Cardiff was voted the third best capital city to live in Europe and the sixth-best city in the UK?

Cardiff has been a hotbed for regeneration over the last two decades, and this is set to continue in the coming years.

Over 57 projects have been completed within Cardiff since 2000, with major work scheduled over the next decade.

Chief amongst them is the South Wales Metro, a massive enhancement to public transport with a new network of buses, rail, and cycling routes for better connectivity.

In the vein of transport, a major new train station is expected by 2024, with the Cardiff Parkway Station expected to welcome over 800k passengers a year.

Other work includes:

  • A revamped Central Square in the city centre.
  • Further enhancements to Cardiff Bay with a new indoor arena, office space, and apartments.
  • A brand-new residential neighbourhood called Central Quay.
  • A £2 million regeneration boost for several Cardiff high streets.
  • Ambitious plans to redevelop the famed Queens Arcade.

According to the latest population estimates from the Welsh government, there are currently 369,202 people living in Cardiff.

Of these, an incredible 45% are aged 16 to 44 (a pivotal age for renters).

And almost 70% are of working age – far higher than the national average.

Cardiff’s population is rising.

Current predictions suggest Cardiff’s population could increase by 20% by 2035.

This is the highest growth in Wales and places Cardiff as the UK’s fastest-growing core city.

Best Areas To Invest In Cardiff 2023

Picking the right area for a Cardiff property investment can be tricky.

After all:

Different areas offer different return potentials with varying demand levels, house prices, and rental income.

Researching and picking the right area for your Cardiff investment property is vital for maximising your success.

To help you out, we’ve calculated the average house prices, rental income, and rental yields for EVERY Cardiff postcode.

Average House Price in C37: £148,013 <h5>

Average Rental Yield in C37: 10.00% <h5>

The best area to invest in Cardiff for rental yields in 2022 is the CF37 postcode.

CF37 covers the town of Pontypridd and consists of villages like Cilfynydd, Glyncoch, and Treforest.

Despite low average house prices of just £148,013, considerable rent returns of £1,234 per month mean investors can enjoy gross yields of 10%.

Average House Price in C10: £190,150 

Average Rental Yield in C10: 8.49% 

Likely Cardiff’s best overall postcode for investing when considering rental demand is CF10.

CF10 covers parts of Cardiff city centre and Cardiff Bay.

Although house prices are slightly higher than CF37, they’re still considerably below the city average while boasting an average rent of £1,345.

Investors can expect huge returns of 8.49% – one of the UK’s highest city centre postcode returns.

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Average House Price in C43: £85,420 

Average Rental Yield in C43: 8.02% 

Based on our research, the postcode of CF43 is generating the third-highest returns in Cardiff in 2022.

This is mainly because of the INCREDIBLY low average house price of just £85,420 – the lowest in Cardiff.

However, rent is on the lower side as you’d expect from such a cheap housing market, with averages of £571 per month – the third-lowest in the region.

Overall, you can expect 8.02% returns in the postcode of CF43, which covers the town of Ferndale.

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Average House Price in C11: £249,779 

Average Rental Yield in C11: 7.10% 

The second Cardiff city centre postcode on this list, CF11 is generating equally impressive returns.

While house prices are pricier than CF10, a considerable income of £1,478 per month means that you can expect yields of 7.10%.

Like CF10, targeting young professional tenants is smart, with new-build apartments typically cheaper than the postcode average would suggest.

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Average House Price in C14: £328,527 

Average Rental Yield in C14: 7.07% 

Finishing our list of the top five best areas to invest in Cardiff is the CF14 postcode.

CF14 covers the district of Birchgrove and is currently generating a sizeable 7.07% rental yield.

You’ll likely be shocked by this, considering the sizeable average house price of £328,527.

But thanks to a massive monthly rent of £1,935 PCM on average (the highest in Cardiff), you can earn the fifth-highest rental returns in CF14.

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