With property remaining largely unaffordable in Sydney, investors can fill this void and provide units that are easier accessible. Here’s what investors can do to secure a family.
Data analysis from RiskWise property Research revealed that while families are ready to move into units, buying into the market is very difficult with high price points, according to RiskWise CEO Doron Peleg.
“Experts are recommending families embrace living in units so they can enjoy good proximity to amenities and public hubs, however, what we have found is that while the median unit price sounds relatively reasonable, it is not a viable option for the vast majority of the families looking for decent-sized units suited to their lifestyle,” Mr Peleg said.
“The estimated price of a unit with a reasonable size, that should be considered as an alternative dwelling option to a house, is $847,000 and that is very high.”
It is not only in the inner ring of Sydney but extends to the middle ring too, with the estimated median price for units in the Eastern Suburbs and Northern Beaches of $1.29 million and $1.24 million respectively, which are considered to be affordable by experts, Mr Peleg claimed.
“The 105sq m unit-to-annual household income is very high at 9.3, that’s significantly higher than Melbourne, the second least affordable capital city in Australia, which has a ratio of 7.5. Units in Brisbane, on the other hand, are the most affordable in price-to-income ratio among all the major capital cities.”
In order to capture this demand, Mr Peleg told Smart Property Investment that aiming to rent out a unit to a family is a safe bet, as they would be likely to be long term tenants.
“If you can attract good tenants, such as families, you can reduce the costs associated with the changes of tenants, as you reduce letting fees and other expenses as well as the vacancy of the property,” Mr Peleg said.
“Having a unit in a school catchment area can also add a lot of value. And parking is a must.”
Comparatively, the CEO said younger renters are typically on a budget and would be more likely to move around more, meaning a higher vacancy rate and letting fees than renting out to a family.
This advice is applicable for larger units, as smaller units with one to two bedrooms are not suited for families, Mr Peleg said.