Sydney is one of the most popular places for people to buy property – and are we surprised? The city saw fantastic results in property growth last year, and it’s still holding its ground as a top contender for one of the best investment cities in the country. After all, CoreLogic RP Data has reported a 9.51 per cent annual value growth for properties across the city: there is clearly high demand for Sydney dwellings.
But being one of the largest cities in Australia, there is a huge amount of choice when looking to spend your home loan. So, just where should a savvy buyer think to look?
Current affordability, future growth
There’s a real question of affordability in Sydney at the moment. If you are buying your first investment property, the answer will be of particular importance, as you might not have as much capital to splash around as others. You aren’t the only one: The McCrindle Urban Living Index discovered that housing affordability is the second most significant challenge identified in Sydney, only beaten out by cost of living. Clearly, it’s a big issue that needs to be addressed when purchasing a property.
You need to find somewhere that is not only within your price range, but also has capacity for growth. The idea is to identify areas that will be showing strong development in infrastructure, businesses or other amenities, and jump on board before other people catch on.
Beyond local development
This growth can be caused by other factors as well. Rising prices in the inner city can push people out to the suburbs, increasing demand there while also reducing supply, pushing prices up. This is known as the ripple effect, and might be one of the causes of the enormous growth in Sydney’s outer suburbs, such as Dundas and North Rocks.
These suburbs were reported by the Sydney Morning Herald to have seen upwards of 50 per cent price growth in 2015 – an incredible result caused by an influx of new residents moving to the area after the nearby Parramatta suburb had a series of demolitions. The removal of the detached houses caused people to head elsewhere to seek their perfect home, ending up in Dundas and North Rocks.
So, what is the lesson here? Keep your eyes and ears open, take note of any major development changes happening in the city, and try to capitalise on where the demand is moving. It’s perfectly possible to make a great return in Sydney property investment; you just have to know where to look.