When thinking about investing in Australia, Sydney is the first one that comes to mind for a reason. It boasts the country’s highest population and its second highest rental rate, according to data compiled by R.P. Data. Houses Mosman area leads the way with a $1,500 median house rental rate, with other regions such as St. Ives, Roseville, Seaforth, and Woollahra close to that figure. Property Investment Sydney is still the gold standard in Australia
This is a title Sydney does not figure to lose anytime soon. The Australian Bureau of Statistics (ABS) and Housing Industry of Australia (HIA) project that the NSW area will have an additional 412,300 by 2020. The Sydney Metropolitan Strategy concurs with the optimistic forecast, as it plans to prepare for 1.12 million new residents over the next 25 years. That will bring the area’s total population to 5.3 million, creating a demand for far more dwellings than are presently available.
About a third of the new homes will be built in brand new communities, but that still leaves around 440,000 new homes slated for construction in the current suburbs. Current plans call for most of this construction to take place in the CBD, where 55,000 homes are expected by 2031. There are also plans to build in particularly convenient locations, such as being within 800 meters of a train station or 400 meters of a busy bus stop. Veteran real estate investors know that a commitment to infrastructure improvements frequently drive up an area’s property values, and Sydney should be no exception.
For example, consider the property value spike the Gold Coast experienced as a result of the new rail link between Brisbane and Robina. The Cross City Tunnel makes it easy for residents of Bondi to drink coffee in Leichhardt. Why would the new M7 and M4 Freeways be any different? The new roads will make the city of Sydney more accessible than ever before.
While almost anyone can spot these trends, acting on them is another matter entirely. The real estate market in Sydney has been so strong for so long that it has become prohibitively expensive to get into for most investors. The best areas are within 12 kilometers of the CBD, waterfront properties, and those with significant scarcity value. Not coincidentally, these areas are also the most expensive.
So, where are the value buys? You need to look at two factors when buying to get the best properties and places to invest: rental yields and up-and-coming suburbs. The following factors also serve as good indicators of a property’s future strong performance.
A nice neighborhood with convenient access to shopping and public transport will always fare better than properties lacking such amenities.
The best of the best are already quite expensive, making it difficult to turn the investment into a profitable venture.
The capital gains earned by others in the area are often predictive of what you should expect going forward.
Rents currently being collected in an area are even better than past capital gains, as they are more indicative of the current real estate market.
Areas wanting for convenient access to public transportation, quality schools, and job prospects frequently experience property value spikes if these conveniences are added later.
You should also remember that property investment is a long term financial strategy. Ideally, you invest during your working life without compromising your lifestyle in order to do so. Individual real estate bubbles form and burst, but they are symptomatic of the property market’s cyclical nature. The key to making money is to acquire property at off-peak prices and selling it for a profit, ignoring the bubbles entirely.
If you are beginner and ready to invest but not sure which suburb should be looking into, or even wonders if buying rental property is a good investment, contact Dave for advice. He will walk you through the entire buying process from which suburbs, house or apartments to look and buy, your budget, goals, and area preferences into consideration in order to produce a strategy that will help you get the most out of investing in property. There are many property investment companies in town but we promote buying with integrity.