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Sydney best investment property

Where are the best places to buy investment property in Sydney?

February 22, 2018 8:00 am by Upside

Sydney is Australia’s largest housing market and saw property price increases of 9.4% on average last year – making the city an attractive hotspot for investment opportunities. Here are some of Sydney’s promising growth areas for 2018, as well as our top tips for choosing the right location.

Growth suburbs in Sydney

Blue-collar suburbs of Sydney and outer suburban areas are tipped to be some of the city’s growth hotspots this year. If you’re thinking about investing in property or growing your portfolio in 2018, here are some of the top suburbs to keep an eye on.

Property in Parramatta

Situated 23 km west of the Sydney CBD, Parramatta and surrounding suburbs are undergoing tremendous growth as the NSW Government sets its sights on Western Sydney as the city’s next big hub. Annual growth for housing in Parramatta is strong at 17.2%, and although rental yields are still fairly modest at 2.0%, interest in the region is likely to grow considerably in line with planned developments and investment in the community.

  • Median unit price: $650,000
  • Median 3-bed house price: $1,250,000

Property in Harrington Park

Thanks to the planned Badgerys Creek Airport and investment in Western Sydney suburbs, Harrington Park and surrounding suburbs like Prestons, Liverpool, and Mount Druitt are looking to offer up some of Sydney’s biggest investment opportunities this year. Annual growth is Harrington Park is sitting at a healthy 11.6%, as are rental yields at 3.2%, and these areas are still relatively affordable – meaning they’re a good choice for those entering the investment market for the first time.

  • Median unit price: $470,000
  • Median house price: $928,000

Property in Lilyfield

Located 6 km west of the Sydney CBD and close to the more exclusive suburbs of Balmain and Drummoyne, Lilyfield is showing promise as a property hotspot for investors with access to a good amount of funding. Annual growth is currently sitting strong at 13.8% while rental yields are at 2.6%. Rental demand in the area is also high, so it’s likely to be a good option for investors wanting to buy closer to the city.

  • Median unit price: $568,000
  • Median 2-bed house price: $1,400,000
  • Median 3-bed house price: $1,740,000
  • Median 4-bed house price: $1,910,000

Property in Ultimo

Those looking to invest in an apartment will find opportunities aplenty in the Ultimo and Haymarket areas. Annual growth for units in the area is at 12%, and rental yields are sitting at 4.1%, which equates to positive cash flow on average for investors. Being so close to the city, this suburb is also likely to see continued strong rental demand – meaning it’s a reasonably safe bet in terms of guaranteed returns in the long run.

  • Median unit price: $763,000

Property in Little Bay

Just a hop, skip and a jump away from Sydney’s exclusive Eastern Suburbs, Little Bay – although still fairly pricey – offers more affordable investment opportunities in sought-after coastal locations. Yearly growth for house prices in the area is currently averaging 10.1% while rental yields are 3.4%, which is favourable compared to nearby suburbs like Maroubra and Coogee.

  • Median unit price: $1,200,000
  • Median house price: $1,700,000

Property in Sutherland

Although Sutherland sits further out of the city at 30 km south of the CBD, the area is well connected by train and bus services, and rental demand in the area is high. The annual growth rate for houses in Sutherland is currently sitting at 13.8%, while rental yields are at 2.5%. While price growth for units is lower at 8.6%, rental yields are strong at 3.7%. Sutherland’s relative affordability, proximity to public transport, and parks, schools, and shops are likely to make this area a key growth hotspot over the coming year.

  • Median unit price: $665,000
  • Median 3-bed house price: $1,190,000

How to decide where to buy investment property in Sydney

Whether you’re looking to invest in property in Sydney or elsewhere in Australia, deciding on the right property depends on a number of considerations. Some of the most important things to think about include:

Low vacancy rates

Tenants moving out regularly can mean weeks or months without rental income, which means any payments you have to make will come out of your own pocket. Ideally, you’ll want to find an investment property in an area where vacancy rates are low so that you don’t have to worry about lost income and the costs associated with finding new tenants.

Rental yields

If you’re taking out a loan to fund your investment property, you’ll want to make sure that rental yields in the areas you’re interested in are high enough to meet all or most of your mortgage repayments. If you’re lucky, you may even be able to secure a property that leaves you with a cash surplus after your monthly loan repayments are made.

Planned developments

Any developments in an area, like public transport options, shops, parks and other major buildings often signal an uptick in price growth and demand – so keep an eye out for any suburbs in which major investments are taking place.

Accessibility

Regardless of where you’re looking to invest, it’s important to make sure that the area is well connected to central areas like the Sydney CBD. Typically, public transport options like a train line will increase the value of a property and attract interest from renters and future buyers alike.

Community

Suburbs that offer lifestyle attractions and community features tend to be in high demand. When researching potential investment locations in Sydney, look for schools, parks, walking tracks, beaches, shops, villages and other drawcards so you can be confident you’re making a smart investment decision.

If you’re thinking about making the leap into investment property or expanding your portfolio in Sydney, you can claim a free online property report in less than a minute for a good indication of how much a property may be worth. Our data incorporates sales history of properties in the area, as well as comparable home sales to help you determine the value of a home.

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