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Peter Spann’s Property Investment Sydney – Where to Buy

Generally it is accepted over many years that Sydney leads the Australian property market into a new growth cycle.

This was certainly the case in the 90’s and early 2000’s.  When Sydney grew, the rest of the nation followed.

Sydney is the economic hub of Australia and that attracts population simply because of depth of jobs, and immigrants are more likely to settle in Sydney than anywhere else.

Old Money v’s New Money

Melbourne has a depth of old money but it’s “new money” that gets booms going and a lot of that is found in Sydney (and now, more and more the resource hubs around the country).

So Sydney achieved 12.5% growth across the board in 2013, leading the nation’s capital at 8.9% with Melbourne coming in at 2.6%.

High profile agent’s prediction

High profile Sydney Real Estate agent John McGrath CEO of McGrath Estate Agents predicts 10% growth for 2014.

He goes on to confirm that lifestyle will top the list saying “The best performing markets are likely to be beachside and inner city suburbs”.

“The inner west area south of Parramatta Rd will benefit with Petersham, Stanmore, Dulwich Hill, and Summer Hill performing well.  Ironically, the best bargains will be in areas like Palm Beach and Whale Beach”.

Let’s all move there, after all median prices are around $2.2m down 4.8% last year!   I see his point though – prices in those suburbs were shot to pieces as new money rushed to sell at any cost their trophy beach houses.   John says, “They have been oversold in recent years and there is a 12 month window to get value there.”

John builds on a theme familiar to my regular followers about looking for improving infrastructure and says,  “The new rail link to the northwest will boost the Hills district and suit suburbs like Rouse Hill, Castle Hill and Bella Vista.

The new inner east light rail will benefit Kensington and Kingsford, as will the influx in Chinese buyers looking to purchase­ close to major educational­ institutions.”

Looking for value

People will be looking for value so investors should stick below $1 million, in fact Peter Spann’s rule of thumb around pricing is to buy at or below the median price which for Sydney is around $640,000.

People will pay to live near the beach with Bondi and Coogee looking to benefit and as large Corporate re-staff inner city boltholes like Kirribilli and Balmain start to tick boxes.

At the beginning of 2014 I released my “Peter Spann – Where to Buy Guide for Property Investment Sydney.”

Let’s see how those area have performed…

Suburb Median
Price
3 Month Growth
As at Sept 14
12 Month Growth
As at Sept 14
Capital Gain on a
$500k investment
Gross Weekly
Rental Yield
Alexandria $950,000 5.3% 21.1% $105,500 4.7%
Artarmon $1,520,000 3.2% 42.1% $210,000 3.7%
Balmain $1,327,000 2.0% 16.2% $81,000 5.5%
Bella Vista $1,102,000 9.1% 20.8% $104,000 4.7%
Bondi $1,663,000 1.9% 7.3% $36,500 3.7%
Campsie $770,000 4.8% 9.5% $47,500 3.3%
Canterbury $815,000 1.1% 16.4% $82,000 4.3%
Castle Hill $928,000 3.8% 21.3% $106,500 4.1%
Coogee $1,730,000 1.8% 10.1% $174,730 3.9%
Darlington $956,000 1.1% 22.5% $215,100 4.3%
Dulwich Hill $1,016,000 6.1% 20.0% $203,200 3.6%
Epping $1,201,000 9.1% 28.4% $341,084 3.3%
Freshwater $1,366,000 2.5% 11.0% $150,260 4.1%
Gladesville $1,310,000 12.0% 26.0% $340,600 3.4%
Homebush $971,000 9.9% 30.2% $293,242 3.5%
Kensington $1,600,000 19.4% 9.6% $153,600 3.2%
Kingsford $1,336,000 6.9% 19.3% $257,848 3.7%
Kirribilli $1,933,000 9.5% -16% -$309,280 2.6%
Marrickville $881,000 1.2% 10.1% $88,981 4.1%
Menai $745,000 1.4% 8.8% $65,560 4.9%
Petersham $990,000 5.1% 15.5% $153,450 3.9%
Roselands $730,000 8.8% 18.7% $136,510 4.1%
Rouse Hill $720,000 1.8% 10.8% $77,760 4.7%
St Peter’s $885,000 5.4% 18.8% $166,380 4.4%
Stanmore $1,128,000 6.5% 19.6% $221,088 3.9%
Summer Hill $1,032,000 0.5% 7.4% $76,368 3.3%
Wentworthville $605,000 6.6% 14.2% $85,910 3.9%
Westmead $730,000 4.3% 5.0% $36,500 3.3%
Wiley Park $656,000 9.3% 19.7% $129,232 4.6%
Willoughby $1,400,000 2.9% 14.8% $207,200 3.5%
Average $1,099,867 5.44% 15.97% $134,611 3.94%

Source: Australian Property Monitors

 

Ok so let’s draw some conclusions:

Best performer:               Artarmon 42.1% which is extraordinary.

Worst performer:           Kirribilli – 16%

Neither of these figures mean much in relation to this report for two reasons – both suburbs had overshot the previous year and so these figures are more catch up than anything and also my recommendations were only made at the end of March 2014 so the quarterly figure of 3.2% and 9.5% respectively are more relevant.

The average median price of a house in these suburbs was over $1,000,000, which, as we all know, means investing is Sydney is expensive!

“How do I get into the Sydney market?”

People often ask me, “How do I get into the Sydney market?”

My response is always the disingenuous, “By getting into the Sydney market!”  If you buy anywhere (obviously subject to research) you’ll get the benefit of Sydney growth and soon be able to “trade up”.

For example if all you can afford is a $350,000 apartment (in a good suburb) then buy in.  If growth rates average 12% p.a.  over 5 years you will have built up $208,000 in “free” equity which is the deposit on a $1,000,000 property.  Now you are well into the Sydney game.

$134,611 in Capital Growth

The most remarkable figure in this though is the average capital growth on $500,000 invested, in this case $134,611.

So in other words if you had invested $500,000 into property across these suburbs (impossible I know but I think you’ll get the point) you would have gained almost $135,000.

Double the Average Wage

That’s more than double the average wage in Australia – by doing nothing!  (apart from investing).

Considering interest rates are hovering around 4.5% and the average yield 3.95% this investment would have only cost you $2,750 in interest for the year!

Even if you had bought in 3 months ago you would still have achieved an average 5.44% growth – the capital gain on $500,000 invested would have been $27,200.

So when it comes to Property Investment Sydney – Peter Spann say’s get in!

Profit From the New Property Boom

Find out about Peter Spann’s exciting new On-Line Property Investing Course Property Pay Day:

http://www.propertypayday.com.au/property-pay-day-2/

original-logos-2014-Jan-6759-713028

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Written by Peter Spann

Peter Spann – Film Maker | Director | Business Coach | Writer | Public Speaking Coach | Presenter | Investor.

Click Here  to learn about my business services.

© Copyright: 2014 Peter Spann – All rights reserved

© Copyright 2014 Peter Spann All Rights Reserved

5 replies
  1. Henry Kwok
    Henry Kwok says:

    Hi peter,
    Just want to let you know that , I have been using your strategy over the last ten years and bought 7 properties and I got valued this year, it worths 6 millions dollars. Just want to say thanks for your advise . And all properties all in Sydney and I am buying the eight one on November this year.
    Cheers,
    Henry

    Reply

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