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Investors shouldn’t miss out
23 Sep 09
Investors shouldn’t miss out

John McCormack, CEO of Starr Partners went on record yesterday about the great opportunities for Investors in the current market.  “Rental demand for the Sydney real estate rental market remains very high as properties under $500,000 are snapped up. Investors are enjoying high rental yields and demand remains strong. We are noticing property investors beginning to return to the Sydney housing market, lured by high yields, low interest rates and high number of quality tenants.”

At present the reserve bank of Australia cash rate stands at 3%, a 60 year low, and the RBA has suggested that this will likely to remain this way at least for the coming months. A rapid and dramatic slashing of interest rates early in 2009 has been very favourable to property investors. Mortgage repayments have been reduced by up to half for some investors, helping to push up the total yields on their investment properties especially units/apartments in Sydney and houses in the greater west. This favourable environment has been luring savvy investors back into the property market. For the first time in several years there are opportunities for positively geared property in the Sydney real estate market.

Median Weekly Rents Sydney *

   Units Houses  Units Yields   House Yields
April 08   $380  $390  5.05%  4.15%
April 09  $410  $450  5.47%  4.49%

The current average weekly rent for Sydney houses stands at $450 per week (up from $390 a year ago) a rise of 15.4% year on year. The average weekly rent for units is currently $410 per week (up from $380 a year ago) a rise of 7.9% year on year. This gives an average gross yield for house and unit of 4.49% and 5.47% respectively.

McCormack noted “The Sydney rental market is currently in a period of transition with several factors creating an unusual market situation. This is bound to stabilise soon, the major factor that will return the market to normality will be the reduction in the government’s first home owners grant due later this year. For now for investors it is a great time to be in the market given the current interest rate environment and large undersupply of housing in Sydney and an overall pent up demand for accommodation.”

* Statistics provided by  APM - April 09
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