When COVID-19 announced itself as a part of our reality the real estate business of Sydney was in disarray and was left wondering how it will fare in the coming desperate times of extended lockdowns.
It’s a no-brainer that with a median dwelling value of $970,355 real estate prices in the state of Sydney are at an all-time high. However with interest rates at a historically low number and the rental income heading for a rise, one can argue that if you are someone looking to sink your cash in investment property, the time to strike is now.
Since In general, we’re seeing a shift from the urban property market to the regional property market when it comes to the growth of suburbs in Sydney a question takes birth ‘’where should you invest in Sydney’s property market in 2021?’’. That is exactly why we are here as we have surveyed the Sydney property market in search of the 15 prime candidates for you to consider.
NARRABEEN
Median property price Narrabeen: $2,300,000 for houses, $952,500 for units.
Average rental yield Narrabeen: 2.0% for houses and 3.3% for units.
The first on the list is one of the northern beach suburbs which is not only gaining momentum in popularity but also has the potential of making a huge return on your investment. It is true that the median house price on the Northern Beaches is higher than other suburbs of Sydney, but in terms of investment in property, it’s as close to a sure-fire winner as you’ll get. Apart from being close to the beach, this suburb is also close to amenities has a low crime rate and is excellent for both families and professionals.
As the work from home culture has created a need for a balance between work and life young professionals are being attracted to the idea of these warm, resort-like areas which also let you easily grab a train into the city if you need to. Combine this with the fact that Narrabeen specifically has a rental rate of 40%, this suburb is the clear winner of the regional shift in the property market that we saw from COVID-19.
BARDWELL PARK
Property is an appreciating asset which means that over time its value will only increase and any person who has been in the business of real estate long enough will understand that investing in property is an action that is taken with long term goals in mind. Suburbs like Bardwell Park are proof of how true these statements really are.
The next big thing to happen to the Sydney property market is going to be the opening of the new Metro line, which makes a suburb like Bardwell Park ideal for investors. The potential for price growth is huge: it is currently not as expensive as other parts of the city, due to poor transport links to the CBD, but once that public transport link opens, it will become a far more viable option. The vacancy rate in Bardwell Park is currently high, due to a lack of students, but that won’t last, making it the perfect location to invest in property in Sydney.
Data from last year also supports these signs of healthy growth as median house prices went from $1,160,000 at the start of 2020 to $1,350,000 at the end of the year.
Median property price Bardwell Park: $1,400,000 for houses.
Average rental yield Bardwell Park: 2.4% for houses.
5-year compound growth rate for Bardwell Park: 1.5% for houses.
BLACKTOWN
Median house: $769,750
Median unit: $500,000
With western Sydney now Australia’s third-largest economy the suburb that has benefited the most from it is no other than Blacktown. It has become an absolute multicultural hub that is rapidly developing its own local economy distinct from the CBD. This growth is also not slowing down anytime soon as Central to this is the $2 billion Sydney Business Park, which is set to generate a wide range of employment opportunities, including a business park, commercial offices, large format retail, general/light industrial – as well as warehousing, retail, hotels and a hospital. There is also the Australian Catholic University campus at Blacktown under development, which will cater for 5,000 students.
The main attraction for investors here is the price, with median house prices ranging from $769,750 for houses to $500,000 for units. According to sources houses in Blacktown rent out for $410 p/w with an annual rental yield of 2.8% Units rent for $375 p/w with a rental yield of 3.9%
FAIRLIGHT
We are back to the Northern Beaches and this time we have Fairlight, just behind Manly beach. It offers easy CBD access via the ferry, but also ample space and thus rental potential. As far as the Sydney housing market goes, it is still far enough away to be affordable, but close enough that it is above the house price for the capital city and likely to grow yet further: after all, the beach isn’t going anywhere.
A Domain Property Report from September 2020 listed this suburb with a year on year growth of a whopping 27.2% for units! To add to that, compound growth rates are simply high across the board.
What’s so surprising about this suburb is that units haven’t performed as well as houses on the Sydney property market, with units showing a downwards trend quarter-on-quarter according to Domain. It’s hard to pinpoint why this is the case, but a good guess is that buyers and renters prefer spacious houses as opposed to smaller units after the pandemic. Despite this, Fairlight is one of the few suburbs where a unit still looks like a good buy, so it still shows promise as a top growth suburb in Sydney.
Median property price Fairlight: $2,525,000 for houses, $1,463,000 for units.
Average rental yield Fairlight: 2.3% for houses and 2.5% for units.
PETERSHAM
Median property price Petersham: $1,675,000 for houses, $750,000 for units
Average rental yield Petersham: 2.3% for houses and 3.1% for units
For those looking to take advantage of the strong rental demand in the inner west, Petersham is the way to go. The price of a property in Petersham is lower than some of the big names in the suburbs, but the proximity to restaurants, bars and amenities still makes it an ideal place for a young person to live before starting a family, and as we all know the largest consumer of rented accommodations are the young which in turn makes Petersham one of the best suburbs to invest in Sydney for those looking to tap into that market.
As one of the suburbs known for defying gloomy COVID-19 forecasts, Petersham is rocking an astounding 27.4% growth rate for houses. You’d primarily want to look at houses here since again units have fallen out of popularity with buyers in the Sydney property market. It is true that the regional property market boom is here to stay, but if you’re thinking long-term, we can assume that living in close proximity to the CBD is bound to become popular again in the not-too-distant future. For this reason, Petersham is a great investment opportunity if you’re trying to avoid putting all your eggs in the regional Sydney property market ‘basket’.
The analysis of just these 5 Suburbs in the state of Sydney has brought 3 important facts to light. The outer suburbs are expected to perform well in the year 2021. Sydney property market is forecasted to show a 7-11% growth rate in 2021 and despite the dip in rental prices, the price growth has largely held strong. What this means is Sydney suburbs, especially the 5 mentioned are in good shape and ready to be invested in without any doubts.
