Sydney Property Investment

Sydney property investment has historically grown along the pebble-in-the-pond model from the CBD. Of course, there’s some natural geography that prevents truly circular movement, like a great big harbour. The Sydney property market, in general, has been in a monster growth phase in many of its CBD-accessible addresses, but there are tangible signs this is reaching the end of that period in 2017.

Recent changes to interest rates for investment properties, falling auction clearance rates and reports from selling agents that the number of potential buyers at open homes has dropped off, indicate that the strongest capital growth in this cycle is behind us.

Of course, this doesn’t rule out the possibility of staying ahead of the peak. The key is to first recognise where the hot run has already been.

Sydney real estate remains an under-supplied market, plus a property market which has as a benefit the strongest economy in the country, as well as still being strong along lines of mitigation … there’ll always be that demand for bridesmaid suburbs which are on the fringe of higher-priced suburbs.

We’ve seen large increases in the value of properties in Bondi Beach and surrounding suburbs in the past 12 months, particularly for lower- to middle-end houses at $1.5 million to $3 million. The Botany/Mascot area has also seen strong growth in both house and unit prices.

In the inner-west, Concord and Cabarita for houses and higher-end units in the Jackson’s Landing precinct in Pyrmont have been some of the best performers.

In the south, houses in particular have seen strong growth, with suburbs such as Hurstville, Riverwood, Engadine and Illawong all performing strongly. The Padstow/Revesby area has experienced strong growth on the back of a surge in the construction of duplex properties.

To the west, we’ve seen significant growth in the Hills area, with strong economic conditions coupled with the commencement of the North West Rail Link creating a ‘perfect storm’ of market conditions.

Further west, in the Penrith and Blacktown local government areas, there’s been significant growth in the previous 12 months … This area of Sydney has been undervalued for a while now and, in particular, property investors have become aware of this.

Savvy buyers should look for infrastructure and planning-led growth to stay ahead of the game.

The NSW Government has targeted certain areas for urban growth in Sydney including the Parramatta Road corridor, North West Rail Line corridor and other rail line corridors, particularly in inner- and middle-ring locations. Large employment growth centres and around improvement transport links to the future Badgerys Creek Airport precinct are likely to provide a ‘growth wave’ to surrounding localities.

While most parts of Sydney have been through their major growth in this cycle, there are still opportunities.

Bayside suburbs such as Brighton-le-sands, Monterey and Sans Souci look to still have some growth potential, particularly for older style units. Areas on the fringes of metropolitan Sydney to the north, south and west still provide some opportunity for capital growth … In some of these areas, a decent family home on a decent land size can still be purchased for around $600,000. To take advantage of this, Sydney property investors have to be less selective about where they want to live and invest.

Sydney Property Investment Overview 2017

In general, we expect to see a period of stable to mildly increasing prices for the Sydney investment property market. There will still be some opportunities in certain pockets for larger growth, however, we expect rental growth to be the major feature of the Sydney residential market over the next few years.

The heat map shows a band of movement to the west and southwest around 25 to 30 kilometres from the CBD, as well as a cluster of suburbs near St Marys, 45 kilometres from town. To the north there’s also a cluster of good gains 20 to 25 kilometres from the big smoke.

Sydney remains an under-supplied property market, plus a market which has as a benefit the strongest economy in the country, as well as still being strong along lines of mitigation … there’ll always be that demand for bridesmaid suburbs which are on the fringe of higher-priced suburbs.

Interestingly, Parramatta remains untouched by high growth suburbs on the heat map, but was central to growth regions overall.

Parramatta is emerging as Sydney’s second CBD so we may begin to see more activity in suburbs that use its services and facilities.

Over the past three years, areas like Canterbury-Bankstown, The Shire and the northwest have grown because of affordability barriers in central suburbs.

Now we’re into this very flat housing market cycle, because of low growth, low interest rates, low inflation macro economies, the shift from areas of affordability will be less pronounced.

Further information on property investment in Sydney including recommended locations and suburbs is available in our free information pack

Disclaimer

Please read this disclaimer carefully.

Information on this Internet site should not be regarded as a substitute for professional legal, financial or real estate advice. Because every investors needs and financial situations are different, the ideas on this web site are intended as a guide only.

Australian Residential Property Planners and its related entities responsible for maintaining this Internet site and its directors, officers and agents believe that all information contained within this Internet web site is correct. However, no warranty is made as to the accuracy or reliability of the information contained herein and Australian Residential Property Planners disclaims all liability and responsibility for any direct or indirect loss or damage which may be suffered by any recipient through relying on anything contained in or omitted from the Internet site at www.propertyinvestmentplanning.com.au

Without limiting the generality of the aforegoing, no person, persons or organisations should invest monies or take other action on reliance of the material contained in this material but instead should satisfy themselves independently (by seeking expert advice or otherwise) of the appropriateness of any such action. Australian Residential Property Planners are not licensed financial advisors. The general information we provide is for educational purposes only. Whenever specific financial advice or financial product advice is required Australian Residential Property Planners refer you to licensed individuals who hold the appropriate licensing required by ASIC.

© Australian Residential Property Planners.

The subject matter on and accessible from the web site www.propertyinvestmentplanning.com.au is copyright. Apart from fair dealing permitted by the Copyright Act 1968, Australian Residential Property Planners grant visitors to the site permission to download and display its copyright material only for private purposes. For reproduction or use of copyright material beyond such uses, permission must be sought directly from Australian Residential Property Planners. If given, permission will be subject to the requirement that the copyright owner's name and interest in the material be acknowledged when the material is reproduced or quoted, in whole or in part.

Website links

This site may contain links to other websites operated by entities which do not belong to the Australian Residential Property Planners Group. These links have been provided solely for you to obtain further information about other relevant products and entities in the market. Australian Residential Property Planners has no control over the information on these sites or the products or services on them, and therefore makes no representations regarding the accuracy or suitability of the information, services, or products described on them. You are advised to make your own enquiries in relation to third parties described or linked on this site. Inclusion of a link to a third party site should not be construed as that party's endorsement of this site.

By linking to sites operated by third parties, Australian Residential Property Planners is not authorising the reproduction of any material on such sites, as such material may be the subject of intellectual property rights.