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    Friday, February 28, 2014
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  • Sydney property and property investment news | Real Estate Blog – Niche Portfolio
    Monday, January 20, 2014
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Units Becoming the Popular Choice for Sydney Property Investors | Real Estate Blog – Niche Portfolio

Wednesday, October 23, 2013

The latest report from data collated by PRDnationwide (Property Research and Development) shows that units in Sydney’s central business district and Western suburbs are increasing in popularity amongst property investors and this trend shows no sign of slowing down.

 

Over the eighteen months leading to April, 2013, investments made in units increased steadily, with over 385 transactions made in units in the month of April, alone. The median price for apartments has increased in the six months from October to April to an impressive $692,000. The demand for investment mortgages also rose by 13% in the twelve months leading up to last April.

 

The research also showed that there seemed to be an even split between local and overseas buyers, with many international investors choosing to buy units or apartments in the city so that their children could use them whilst undertaking tertiary study in Sydney city. Many of these international buyers can provide 20-30% of the deposit and have been borrowing the remainder from local lenders. For them, owning a unit in Sydney’s CBD allows for further investment in both residential and commercial real estate in the city.

 

Furthermore, the value of Sydney units is also increasing annually. The average appreciation for apartments in the CBD is 3.1% while the average holding time for investments is 6.5 years, which could mean a decent return in the long run for investors.

 

The top Sydney suburbs for unit investment are based in the west, according to the results, which showed Mount Druitt as the suburb offering the best value for investors. With a median price of $248,500, units in Mount Druitt showed a rental yield of 7.51% compared to the yield of 5.49% on houses.

 

Factors such as affordability, less maintenance and proximity to the city centre all influence the surge of popularity for units in Sydney’s western suburbs. Drawn to these areas are new arrivals to Australia, young couples without kids and empty nesters. Young Australians are also choosing to delay buying a house until a lot later than their parents’ generation so the option to rent is an attractive and often necessary one for them.

 

Deputy editor of the Australian Property Investor (API) magazine, Shannon Molloy, said, “there was a time when units were seen as a necessity rather than a choice for a lot of people. Now, people want to live in nice, easy to maintain units that are close to transport or links to the city.”

 

He also pointed out that yields of more than 6% were often enough to make property cash flow positive for investors, that is that the rent could potentially cover the mortgage repayments and maintenance costs, with profit left over.

 

It looks like now could be the perfect time to look into making a valuable investment in a unit in Sydney’s city or its western suburbs.