Why You Should Invest in Sydney’s Residential Property Market (and Where)

If you’re in the market to invest in a residential property, you may be trying to decide on a number of factors – what kind of residential property to purchase, what size, layout and other features the property holds. But one of the biggest factors to consider is location. Different locations will provide different investment returns and depending on your circumstances and what you hope to achieve, the location can be a huge decisive factor. If you’re planning to eventually move into the property yourself, you will want to ensure the location of the property is somewhere close to your work, and other lifestyle needs. If it is to be sold in the future, research into the capital growth of property prices over the past few years will indicate whether that location is a good investment.

Why invest in Sydney?

Sydney is one of the biggest cities in Australia and with suburbs sprawling across many different locations, from the inner CBD to the North Shore areas of Dee Why and Manly, there are plenty of options when looking at buying residential property.

1. Rental inflation

Recent trends across various cities have shown rental returns turn negative, (such as in Canberra) however in the Greater-Sydney area rental inflation has actually held up quite well in recent times. In  Sydney the population is booming, so purchasing a residential property  will see it  likely gain great returns whilst it is on the rental market. Because housing is in demand in  Sydney, if you decide to sell the property down the track, this should result in a good sale price also.

2. House values on the rise

In general, house prices have risen steadily across various suburbs in Sydney. Regardless of whether you intend to use the property as an investment or to live in it, when you eventually go to sell your home, you could see a potential rise in value for your property. It was never thought that the median house price in Sydney would reach $1 million, yet that is the reality of the housing market right now. Because of the boom in population in major cities such as Sydney, experts in the property market believe the value of homes is only going to keep increasing over  the next 20 years.

3. The market is ahead of international results

If you look at the housing market across international locations, Sydney’s growth is way ahead of its international competitors. The priciest 5% of homes rose in value by 14.8% last year, compared to 1.8% growth globally for homes in this same category. Vancouver nabbed the top spot in growth, with their luxury prices soaring by 24.5%. Sydney also surpassed the growth  of the Melbourne market. This makes Sydney a highly sought after city to purchase  residential property in with trends looking to continue for years to come.

4. Sydney is wanted

Amongst the world’s wealthiest (those with net assets of more than $US30 million), Sydney is in the top 10 cities where these people want to live. According to the list, Sydney ranks in at eighth place, a jump up from it’s previous rank at fourteenth. This is  a pretty good indication that even those with a lower net asset worth are interested in living in Sydney.

Where in Sydney should you invest?

Sydney is a large city with a number of suburbs, all with their own flair, style and price ranges. Of course, the suburb you purchase in should be determined by your needs and what you hope to achieve with the property. If you’re looking for your first home, but want to purchase a place close to work, buying in an appropriate suburb for those needs should be a decisive factor. However, to discover areas with the greatest growth potential  in Sydney, we can look at market trends and determine the suburbs that are expected to continue to grow in value.

Granville

In the Parramatta region, Granville has proved to be one of the highest growth areas. With the median price of housing in the area at $800,000, this is a jump of 37.8% in the past 12 months. In the last five years, the median house price has grown nearly 100% (96.8%). The majority of people living in the area are couples and singles under 35, thanks to the convenience of the location to various amenities such as TAFE, schools, parks and shopping centres.

Tregear

For a more affordable entry into the housing market that has promising growth potential, the suburb of Tregear might be for you. A lot of properties in the area are available for under $400,000, which may help those who are looking to purchase their first home. Added to this, if building a brand new home, there are some grants available to brand new builds for first time homebuyers.

Mortlake

In the inner west, the suburb of Mortlake has shown the best growth in the market. In the past year alone, the median house price has grown by 47.7% to a price of $1.67 million. Mortlake is now a place that many couples, families, professionals and retirees have decided to make a home in. There are a number of different types of homes available from new apartments and townhouses, right through to mansions with water and city views.

Coogee

While the eastern Sydney suburb of Coogee is expensive to buy initially, the median rental price supports the initial cost of purchasing a property. Your Investment Property has reported that the median rental price for the South Coogee area in 2016 is $1,250 per week, while the media house price is $2.25million. The average annual capital growth is marked as 8.02%, with this information based on the past 55 property sales.

Looking to invest?

No matter how you look at it, Sydney is certainly a great place to invest in residential property. By looking at past and current trends, we can see that Sydney has massive growth potential still to come. If you’re looking to buy a property to live in or to invest in, you can’t beat the growth you can find with a property in the Sydney region. For expert advice and support on investing in property contact us.

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Craig Sewell
Craig Sewell is the Foundation Director for Mint360 Property a leading real estate firm based in Sydney’s exclusive Eastern Suburbs. He holds the record for selling the most expensive house in Maroubra for $8 million and has sold shopping centres for up to $15 million. Craig’s most important connection is to his family and the community they live in. That’s why, when he is not selling property, you will see Craig and his four children getting involved in local life – he is a strong believer in the development & education of children giving time and money to Coogee Public School P&C Surf, Coogee Minnows Junior Surf Lifesaving Club, Coogee Rugby Club (The Seahorses) or simply enjoying the fabulous beach-side lifestyle on offer in Sydney’s Eastern Suburbs.
Craig Sewell

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5th November 2016

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