Sydney Investors

Why Sydney investors are Investing outside of Sydney

Rental Vacancy rates in Sydney are at a 13-year high, property values have also recently peaked meaning Sydney does not present as a sound investment opportunity for your Dollar. Adding to this, rent as a percentage of the value of the property has also dropped on the back of the recent spate of property price increases across inner and outer Sydney

 

Where are Sydney Investors investing and why?

Whilst locations such as South East Queensland, outer Melbourne, potentially Adelaide and for the brave Perth present far better investment value + higher rental yields and low vacancy rates

We remain cautious about Perth as it still has a higher vacancy rate than any other city and the propensity to drop in value but more likely to remain flat for a while yet. This is a generalisation as a few postal codes in Perth are displaying the opposite with lower vacancy rates and a slight increase in value

Australian Capital Cities have vacancy rates at just under 2% but inner Sydney has risen to 2.8% (expected to climb as new builds complete) and Perth still sits at a high of 4.1% and could remain unchanged into near future as new apartments complete and hit the rental pool

Melbourne inner suburbs has a high median price of just under $876k and investors wanting to invest here would tend to secure a Townhouse or if budgets are lower then look to invest in an apartment

A townhouse will tend to offer a stronger capital growth at the sacrifice of a lower rental yield of 3.5% to 4%; where a 2 bed apartment could achieve around 4% yield and a 1 bed apartment around 4.5% yield

Opposite to both Sydney and Perth, the Melbourne outer suburbs continues to experience an incredible demand for House and Land packages on the back of a historically high Migration and Immigration Rate into Victoria. A family cannot afford to buy or rent a home in the inner suburbs and are thus moving 20km to 40km out of the CBD and into locations offering employment hubs, schools and other essential infrastructure services

 

Why Invest outer Melbourne

These outer locations have gone up by over 20% in the past 12 months and even higher going back 24 months with no sign of it abating. Outer emerging cities such as Geelong, Werribee, Melton by design have a large investment into infrastructure in order to create communities in outer Melbourne who do not have a need to come into the CBD

The demand for House and Land packages is exceptionally high with release of new land not keeping up with a growing population base. Some Lots will only be titled in 15 to 24 months’ time; meaning access to your Lot, in order to build on, can only occur once it has been Titled. This is how high the demand is. We do have access to some either Titled or close to Title worthy of your consideration

Further out from Melbourne are the likes of Ballarat, Bendigo or Shepparton which are also are attracting more owners wanting a better quality of life outside of the rat race and more affordable homes for their families to live in. These regional centers are also attracting the interest of Investors looking for absolute value for their investment dollar, strong rental yields and low vacancy rates read more here

What we continue to notice is how land developers prefer Owners over Investors and thus limit the supply for the investment market. We identify this as a major plus to further add value to your investment as you have less rental competition and chances of a better capital growth in suburbs which are primarily owner occupied

Where else can you secure a 4 bed home on a decent block of land for less than a One Bed apartment in inner Melbourne from $400k to $450k? Expert analysis will sway towards a stronger capital growth on a block of land over an apartment ; which investment vehicle would you prefer to invest in?

 

Why South East Queensland

South East Queensland has the highest investment into Infrastructure in the history of Australia over any other location across Australia. This current and planned infrastructure investment continues to create new jobs and improve on residents lifestyle at the same time

Industry is invited into the area and also creates new jobs. Thus both government and industry are generating new employment opportunities, which in turn attracts population growth for lifestyle and employment

This same population growth is placing upward pressure on supply (much like outer Melbourne) and developers continue to struggle to meet a rising demand by owners and renters

The result is stronger capital growth potential, low vacancy rates and sound rental yields well underpinned by sound fundamentals required to support an astute investment decision

Locations across SEQ worthy of consideration include Sunshine Coast, outer Brisbane (not CBD), parts of the Gold Coast, Ipswich and back up to Sunny Coast. This area is referred to as the Golden Triangle and is attracting strong interest by investors who feel Sydney does not meet their investment criteria

For less than what a One Bed Apartment in Sydney would cost, you can secure a quality investment opportunity anywhere in SEQ and at higher rental yields with lower vacancy rates too. The most popular investment vehicle being House and Land or a Townhouse. Did you know that on a House and Land Package you only pay Stamp Duties on the Land component offering you high savings?

With a smaller preference towards apartments in the inner suburbs of Brisbane or close to the largest hospital in the Southern Hemisphere on Sunshine Coast

 

Examples of how the financial could work, why wouldn’t you invest :

We have used general industry related figures for demonstration purposes only with the purpose being to enlighten you to there still being Investment Opportunity out there (contrary to Media reporting) and to show those of you waiting to see what happens that your next could be now and in a location undergoing capital growth and strong rental yields with low vacancy rates … why wait?

Using $100k taxable income and the following :

  • 5% interest only your 10% deposit could be earning you 35.98% per annum and is Cash Flow Positive in your pocket

 

Using $100k taxable income and the following :

  • 5% Principal + Interest your 10% deposit could be earning you 35.98% per annum and is Cash Flow Positive in your pocket

 

List your preferred suburbs and or locations in the box above
Select one or more options

Dual Key House and Land

Tags: , , , , , , , , , , , , , , , , , , , , , , , ,

Comments are closed.
UA-28577502-1