The popularity of units is on the rise in Sydney, which is good news for property investors seeking solid capital growth on a portfolio of cheaper properties.
Riding the Lifestyle Revolution
Recent reports suggest that the popularity of unit living in Sydney is increasing, especially in the western suburbs, as renters are prioritising low maintenance living and accessibility of the inner city over the traditional detached house on a quarter-acre block.
In 28 suburbs in New South Wales, almost all of them in Sydney, units are now offering better rental incomes than houses as a percentage of the property value. Units were once considered a necessary evil for low-income earners, but are now being viewed as a lifestyle of choice and the demand being placed on the existing supply of smaller, low maintenance accommodation options is growing.
Units in Mt Druitt, Leumeah, Macquarie Fields, Ingleburn, Auburn and Blacktown are delivering the best rents relative to property value. In all of these suburbs, annual rental yields as a percentage of property value are more than six per cent, which is sufficient for the rent charged to cover mortgage repayments and associated costs, without the investor having to cover any shortfalls.
Units in Mt Druitt are providing the best rental returns of any suburbs – 7.5 per cent per year – based on a median property price of just under $250,000. Houses in the same suburb are returning annual rents of only 5.5 per cent of property value, leaving house investors in Mt Druitt with out-of-pocket expenses to cover the shortfalls between the rent and mortgage.
Investment Properties in Sydney
For professional advice on investing in property in Sydney, contact Rass Global Investments.