Property Investment Sydney
Sydney is one of the largest property markets in Australia. Despite a downturn in the greater Australian property market after hitting record highs in 2021, the property value in Sydney still commands a premium, with data showing a mean dwelling price of $1,177,700.
Perhaps Sydney’s strongest trait is its mixture of investment options that fit the budget of a high spender looking for rare property investments and someone with a lower budget looking for a sub $800,000 investment.
So, there are several ways you can approach investing in property within the market. But which one should you choose?
Let’s dive into the Sydney property market’s outlook, some of its most attractive suburbs, how a buyer’s agent such as Amassed will guide your investment, and other areas you can look at to reap similar yields and capital growth
Why Should You Have a Property Investment in Sydney?
Sydney is famous for its premium selection of properties. However, it often has a healthy choice of more affordable property that suits new property investors who are not ready to take many risks. This makes investing in the region’s property market one of the best decisions you can make as a first-time investor.
The Sydney property market has fewer caveats and complexities than the stock market. As long as you perform your due diligence before buying property or you contract a buyer’s agent, such as Amassed, to do all the hard work for you, you can make profitable investments with little knowledge about the specific property market.
Sydney also has an excellent reputation for having one of the best rental yields and capital growth for property in the Australian market. Therefore, you’re very likely to get a great yield from your investment, depending on whether you plan to rent the property or resell it later.
The Outlook of Property Investment Sydney
2021 marked a historical period in the Sydney property market. Dwelling values in most locations hit an all-time high as low interest rates and other factors spiked the demand for real estate in the region.
In its 2021 forecast, Commonwealth Bank predicted a 27% gain in dwelling prices for 2021 alone. In some areas, housing prices were increasing by $6,700 weekly. The market activity also spiked during this period, going up by 34.7% in the 12 months leading to October 2021.
By the year’s close, median property prices in Sydney had hit a record high just shy of $1.5 million.
Perhaps the biggest takeaway in 2021 was not the boom in Sydney’s property market but rather its resilience before the market spike.
When the COVID-19 pandemic first hit, most real estate markets had to withstand challenging conditions. The biggest hit was the slowdown in international investment since borders had been closed for ex-pats, uni students, and other global players in the market.
Despite a dip in demand from investment buyers, the Sydney market came out relatively unscathed.
Such resilience shows itself in 2022 as the market eases off from the red-hot demand of 2021. The increase in interest rates by the Reserve Bank of Australia and affordability constraints are starting to slow down sales, Sydney house prices, and building approval rates.
Still, the market is gradually settling instead of imploding as some analysts feared. That’s because, despite local buyers slowly easing off from making real estate purchases, the market is presenting new opportunities for local and international property investors interested in investment properties in the region.
The 2021 boom was primarily attributed to panic buying due to the pandemic and the limited housing, units, and dwelling supply. Post-pandemic, as panic buyers reduce and the borders open up to ex-pats and uni students, investment property should be the next big thing in the Sydney market.
In another positive outlook, data shows that in 2022, property prices in Sydney will grow by 8%, albeit at a slowed pace compared to 2021.
The Viability of an Apartment as a Sydney Property Investment
The Sydney apartment market raised a few concerns during the 2021 boom as it recorded a low relative growth compared to house prices. In 2021, unit prices lagged, with apartments recording a 9.5% growth to a median value of $802,745.
This slower relative growth was attributed to the shift in population as more people moved out of big cities in 2020 and 2021 to avoid stricter COVID-19 restrictions and settle in perceived “safer” regional locations.
Sydney, Melbourne, and Brisbane were some of the most affected markets, with significant decentralising of inner apartment owners and city tenants in the regions. Consequently, vacancy rates increased, leading to lower rent prices in the inner-city apartment market for close to 18 months.
The unit market was also hit by the absence of tourists and international students in Sydney.
However, as COVID-19 restrictions are lifted, and life is returning to normalcy, the apartment and unit markets are starting to thrive again. Some of these effects may eventually be reversed, and investing in units or apartments in Sydney may start yielding as much return as houses.
How to Invest in Sydney Property
Sydney is a vibrant coastal city with a thriving culture and plenty of beachside and harborside suburbs to choose to invest in. The region also boasts a robust transport infrastructure, unique landscape, and alluring lifestyle that would attract a greater population over the years.
Therefore, it is one of the best places to live and invest. But how do you go about buying or investing in the right property in the area?
Typically, you have two options:
Independent Investment
With this option, you are responsible for searching, researching, negotiating, and purchasing your preferred property in Sydney.
This is a smart option if you know the Sydney property market better than the back of your hand. Otherwise, despite the market generally having great investment options, you’re still at significant risk of overspending on a bad investment that will yield you little to no returns.
Buyer's Agent-Assisted Investment
This is the smarter option if you’re either a foreigner with little knowledge of Sydney’s real estate market or a local with a decent understanding of the property market. Using a buyer’s agent to invest in Sydney’s property market shields you from the high risks of buying into the wrong areas or the wrong kind of property.
A buyer’s agent acts as your strategic investment partner who takes all the load of searching, researching, negotiating, and purchasing a property investment on your behalf. Since they have in-depth knowledge of the local real estate market with industry connections to off-market opportunities, a buyer’s agent is best-positioned to direct your money to a suitable property investment.
Buyer’s agents use various approaches to secure property investments for you. One of the most effective and well-tested methods is the Amassed System, developed by Amassed.
Amassed is one of Australia’s most recommended buyer agencies, with a property portfolio of over 7 million dollars. The company’s managing director, Elijah Turkovic, developed the Amassed System when building his 7-million-dollar property portfolio by age 26.
Typically, the Amassed System covers seven key steps when securing a property investment. These are:
- Assess
- Modify
- Address
- Search
- Select
- Enquire
- Decision
Through these steps, the buyer’s agent first establishes your investment strategy and wealth creation plan and the help you need to achieve the milestones in that plan. The Amassed team then modifies your investment strategy, factoring in the current market. The team also addresses any questions or concerns you may have.
Satisfied with your needs and requirements, the Amassed team searches through hundreds of properties using its real estate contacts to strike off-market opportunities. Off-market opportunities often present the best value to the investor since they sell at a lower, more affordable price.
The Amassed team finally enquires about your preferred property from their search, ensuring there’re no unmentioned damages and the property fits the traits of a unique investment. The team will also recommend and schedule building and pest inspections to ensure the property is as advertised.
Finally, a professional negotiator will cut the deal for you, squeezing the most discounts they can from the seller or their agent.
Tips You Can Use to Invest in Sydney Property Market Wisely
If you’re going at it alone or using the services of a buyer’s agent, here’re a few tips that will help you make a wise investment decision.
Decide on an Investment Strategy
Your property investment strategy is the blueprint you’ll use when investing in property in the Sydney real estate market. You can implement various strategies depending on your short-term or long-term goals.
For instance, someone buying a long-term investment may prioritise buying a unique property that will appreciate over a long period before selling it. You can be renting it out in the meantime to source regular income from the property as it appreciates.
The strategy may use equity from the first property to buy the second and subsequent ones. Therefore, you have a long-term plan of accruing as many property investments as possible in Sydney before starting to cash out later on, probably as your retirement plan.
Short-term investors can look for highly profitable properties to sell or flip quickly in the market. Alternatively, you can go for slightly older, more affordable properties in the Sydney property market. Then, you can renovate and rent them to gain a higher rental yield than you would normally.
With the right approach in mind, you will know the kind of property and in which suburbs you’ll be targeting.
Choose Your Investment Wisely
One of Sydney’s property market’s greatest strengths is its versatility. Despite most properties commanding a premium, you can still get affordable options that fit a mid-range budget.
However, that comes with the challenge of possibly landing a bad deal, given how drastically pricing, and demand, availability can vary across suburbs and regions.
To be on the safe side of the Sydney real estate market, you’ll want to observe the following rules to make a wise investment decision:
- Stay close to amenities and transportation
- Invest in an area with a history of high capital growth
- Invest in an area with high demand and low supply
- Only buy a property that’s been made with high-quality materials and is in good condition
- Get property that is close to the beaches, parks, or rivers and has great water views
- Get property that can be easily converted or adapted with something for everyone. For instance, you’d want a second bedroom that can be converted into an office or vice versa. Therefore, you don’t want permanent fixtures such as an in-built desk. That way, you can rent or sell your property while adjusting to what property type is in-demand in the market.
Apply Logic
When buying property as an owner-occupier, your main driving force is the emotions tied to the space. However, you need to rely on logic and reasoning when purchasing as an investor.
Therefore, remain detached emotionally from your purchases, only going for investments that will turn a high yield in the short term or long term, depending on your investment strategy.
For instance, you may prefer three-car spaces, but the area you’re investing in attracts buyers who prefer large kitchens. Therefore, go for the large kitchen properties, which will attract buyers faster.
Stay Updated with The Current Market
Different areas and suburbs within Sydney will respond differently to changing market forces, leading to varying prices and property demand fluctuations. Therefore, to be on the safer side of the market, you need to learn how these prices trend and fluctuate in different areas and suburbs you want to invest in.
Also, make yourself aware of any upcoming changes in the area that may affect property demand and prices. These include planned developments and transport infrastructure being set up within the area.
Research the market and learn how long it takes for a house to sell or a rental to fill a vacancy. That way, you’ll judge the viability of each suburb or area and direct your property investment to the correct location within Sydney based on your investment plan.
Best Sydney Suburb to Invest in Property
Sydney has a rich supply of suburbs where you can make profitable real estate investments. One of the best you can invest in is Neutral Bay.
This suburb is located 1.5 kilometers north of Sydney’s CBD at the Lower North Shore. Neutral Bay has roughly 4,958 units in the area, with a very high median price of $1.4 million.
There’s also a very high demand for property in the area, albeit constrained supply which makes property investments yield high returns and capital growth.
5 Best Suburbs to Invest in Sydney
Neutral Bay is not the only suburb you should consider taking your real estate property investment to in Sydney. Here are five other compelling options you can look at:
Coogee
Coogee is a gentrified coastal Sydney suburb located southeast of the CBD. It’s become one of the biggest property investor attractions due to the massive infrastructure projects commissioned in the area in 2020.
One of the most significant ones is the Southeast Light Rail project, a $2.2 billion project that will introduce a 12km light rail network connecting Kingsford to Circular Quay.
There’s also a $5 million upgrade of the town center at Coogee Bay Road. This project commenced in September 2018.
Coogee lies only 8 km from the CBD, with a total population of 14,012 residents.
Kensington
Kensington is a Sydney suburb located in the local government area of the City of Randwick to the southeast of Sydney’s CBD. It lies to the west of Randwick Racecourse and south of Moore Park.
Some of the principal landmarks at Kensington include the National Institute of Dramatic Arts (NIDA), the main campus of the University of New South Wales, and the exclusive Australia Golf Club.
This suburb is also expected to benefit from the South-East Light Rail project.
It lies 6 km from Sydney’s CBD with a population of 12,776.
Cammeray
Cammeray is located on the Lower North Shore of Sydney to the north of Sydney’s CBD. Most residences in this suburb are in the form of semi-detached or standalone, single or double-story houses. There are also several quiet streets lined with trees and nature strips.
Overall, Cammeray gives a very pleasant green look.
The suburb is only 5 km from Sydney’s CBD, with a population of 6,783. The median household income is $2239 weekly.
Dulwich Hill
Dulwich Hill is located southwest of Sydney’s CBD, in the Inner West of Sydney. Its boundaries stretch to the shore of Cooks River, with the suburb featuring established residential areas with federation architecture.
Compared to many inner-city suburbs, the streets at Dulwich Hill are wider with bigger houses. Some of these houses are older, bordering other suburbs such as Petersham.
Dulwich hill lies about 7.5 km from Sydney’s CBD and has a population of about 12,981 residents. The median household income is $1540 weekly.
Marrickville
Marrickville is a gentrified suburb southwest of Sydney’s CBD in the inner west of Sydney. It is the largest suburb in the inner west, sitting on the northern banks of Cooks River.
Marrickville offers a diverse landscape featuring medium and low-density residential, light industrial, and commercial areas.
Most homes in the suburb are terraced or detached Victorian houses built in the late 19th century. Others feature the Federation-style architecture introduced in the early 20th century.
Marrickville lies 7 km from Sydney’s CBD, with a population of about 24,612. The median household income is $2324 weekly.
The 11 Top Areas to Invest in Property In 2022
You shouldn’t necessarily constrict yourself to the six listed suburbs above if you want to invest in real estate in Sydney. Here are 11 other top areas you can choose to invest in property within Sydney in 2022.
Randwick, 2031
Randwick is located in Sydney’s Eastern Suburbs. It has over 10,111 properties with a median unit price of $1.2 million.
This region lies six kilometers southeast of Sydney’s CBD and is famous for several heritage-listed properties. It also borders the University of South Wales.
Narrabeen, 2101
Narrabeen is a prime property investment region in Sydney located 23 kilometers from the CBD. It is a beachside suburb housing 8,207 residents.
There are approximately 2,664 properties in the area, commanding a very high median price of $1.33 million.
Maroubra, 2035
Maroubra lies south of Randwick, 10 km southeast of Sydney’s CBD. This region commands a median unit price of $1.02 million out of approximately 6,525 properties. Within the Randwick County Council, Maroubra is one of the largest suburbs.
Drummoyne, 2047
Drummoyne is located six kilometers west of Sydney’s CBD, in Sydney’s Inner West. There are 3,912 properties in this region with a median unit price of $1.25 million.
Freshwater, 2096
Freshwater lies in the Northern Beaches, 17 kilometers from Sydney’s CBD. This region is touted to be the birthplace of Australian surfing.
There are approximately 2,201 properties in the region with a median unit price of $1.29 million.
Ashfield
Ashfield is a Sydney suburb located 8 km southwest of the CBD in the Inner West of Sydney. Most of the area’s dwellings feature post-war low-rise apartments and detached houses built in federation-era architecture.
There are also several grand Victorian buildings that give Ashfield a rich cultural heritage. The total population in the area lies around 22,190 residents.
Kogarah
Kogarah is a southern Sydney residential suburb considered the center of the St. George area.
The region’s main shopping area is located on Railway Parade, Regent Street, around Kogarah railway station. It extends to the opposite side of the railway line on Station Street.
Kogarah lies 14 km south of the CBD and has a population of approximately 12,763.
Newtown
Newtown is a bohemian neighborhood that is diverse and full of activity day and night. The region is also famous for shoppers who flock to indie bookshops and thrift stores on King Street. Hip eateries and bars with multicultural fare cater to locals and students from the University of Sydney.
The Enmore Theater is another big attraction in the area, often hosting live music and comedy revues.
Newton is also famous for its street art, restored Victorian buildings, and a mural of Martin Luther King.
Bexley
Bexley is a southern Sydney suburb located 14 km to the south of Sydney’s CBD. Its located in the St. George area, falling into the administration of the local government area of Bayside Council.
Bexley hosts a mixture of commercial, residential, and light industrial developments. It also has a main shopping strip, the Bexley Shopping Center, located on Forest Road. The suburb has a total population of approximately 19,067 residents.
Mosman, 2088
Mosman is a well-known, affluent Sydney suburb located on the Lower North shore. There are roughly 8,063 units in the region, commanding a median unit price of $1.28 million. These units include apartments for sale.
Surry Hills, 2010
Surry Hills is an inner-city suburb just a kilometer from Sydney’s CBD. It is a multicultural suburb bordering Darlinghurst, Redfern, Haymarket, and Paddington. The area also has numerous pubs, restaurants, and heritage buildings.
Surry Hills hosts about 7,587 units with a median price of $985,685.
Contract a Buyer's Agent to Drive Your Australia Property Investment Journey
You can never run out of options for buying property as an investment in Sydney. The market has already proven to be resilient. Historically, it’s been one of Australia’s best-performing real estate markets.
As you plan your investment strategy, start involving a buyer’s agent to position yourself better in one of Australia’s most cutthroat markets. Contact Amassed today and discover how you can grow a robust property investment portfolio in Sydney.
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