After years of stunted growth and low returns, the NSW property market appears to be on the verge of a recovery – largely due to low vacancy rates and increasing rents.
Real Estate Institute of NSW (REINSW) president Cristine Castle says that while we’re not experiencing an increase of interest “to previous levels”, investors are finally stepping back into the Sydney market. “We’ve noted a lot of activity and extra customers in the marketplace,” Castle says. “Certainly, the increase in rents has brought investors back.”
Over the last quarter, Residex reported a capital growth increase of 2.3% in Sydney, up from 1.5% in the previous quarter. In regional NSW, growth increased from 0.97% to 1.35% over the same period.
With an average house price of $548,500, Sydney maintains the highest median property value in Australia. The gradually increasing capital growth, coupled with increasing yields, is strengthening the city’s appeal with investors. “We do believe that Sydney represents value,” Castle says. “Sydney is a very stable market, and we don’t have anywhere to fall.”
Although growth is slower in country NSW, the average property price sits at a healthy $309,000, with a median rental return of $245 a week, or 4.14%. “The drought affected areas of regional NSW are still finding it difficult, and the water is an issue,” says Castle. “But of course, there are [regional] areas that don’t have some of those issues, and have good regional centres and infrastructure – they’re as popular as ever.”
