Despite a slide in yields, there’s still growth to be had for discerning investors in some of Sydney’s more affordable areas, according to a number of experts.
With lower entry level prices, down to a median price of $238,000 in Mount Druitt (RP Data), Sydney’s west has recently cropped up on a number of investors’ radars as they buy in pursuit of affordability and yields.
“The market is certainly heating up in the area,” Right Property Group's Victor Kumar told Smart Property Investment. Combined with low interest rates and SMSF trustees looking for long-term performers, he explained that there has been a strong upward swing in prices already with yields dropping off as a result.
While this has had some investors wondering whether they’ve missed the boat, there may still be opportunities for savvy buyers.
He explained that despite the increase in competition, there are still bargains available if investors are willing to understand the ‘micromarkets’ within an area. This, combined with good relationships with real estate agents, will allow investors “to be able to grab a bargain before the property is substantially marketed to the general public”.
Similarly, Positive Real Estate’s Sam Saggers explained to Smart Property Investment that the market is still “very buoyant”.
“The rents are still growing despite being a buyer’s market, and the sentiment is improving every day with the low rates,” he said.
It’s good news for investors still looking to get in, he said, as the western Syney area hasn’t yet reached the “tipping point” where the market moves over the top of the property clock.
“There is a huge pool of people in western Sydney who are renters and are ready to leave the rental pool, as it’s now cheaper to buy than rent. This will create a huge amount of pressure on sales volumes. As more people opt to buy, so comes the shortage of properties and price growth,” Mr Saggers noted.