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Property investment more attractive in Sydney

On Aug 15 2012
Tagged as:
  • NSW


For those looking at purchasing an investment property, Sydney boats the greener pastures, says one ...

For those looking at purchasing an investment property, Sydney boats the greener pastures, says one expert.

According to property specialists, investors looking at buying a property that will return more than five per cent yields should look no further than Sydney, Fairfax reported.

Experts revealed greater yields were more likely in Sydney than Melbourne - inciting more lucrative investment opportunities in the New South Wales capital.

An increasing demand in the Sydney rental market was bolstering yields in the middle and lower price ranges by almost eight per cent a year.

Comparing this figure with Melbourne rents, which have almost remained motionless, Sydney presents more opportunity for investors.

According to Fairfax, Melbourne's inner-city apartment glut was to blame for the stagnant rent prices, as well as a fall in house prices by about ten per cent since 2010.

Louis Christopher, managing director of SQM Research, said the rising rents in Sydney were benefiting property investors in the lower end of the property market.

"The numbers for investors in Sydney are starting to make sense, with a gross rental yield of 5.5 per cent for an inner-city property," Mr Christopher explained.

Despite the positive trend rental prices for more valuable homes didn't follow suit.

"Yields are a lot lower for luxury properties, where the gross yields gets down to 1 and 2 per cent. The higher the price, the higher the land tax and the transaction costs, such as stamp duty," he added.



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