It’s not big news that capital growth is slowing in many areas of Sydney. A great property investment strategy now is to try find those wonder suburbs where the market is undervalued and capital growth is strong. Investors should look for suburbs that have good indicators for growth but have lagged in price as buyer confidence slowed across the market. The best way to do that is determining key indicators for future growth potential.
Growth Indicators
Capital growth occurs when demand exceeds supply. You can predict future price growth to a certain extent by measuring current supply and demand using indicators such as:
- Auction clearance rates
- Vacancy rates
- Rental yields
- Days on market
- Online search interest
- Percentage of stock on market
- Average vendor discount
- Percentage of renters to owner-occupiers
NSW Suburbs with Growth Potential
Using these indicators, it appears that pockets of southern Sydney are looking like the best places to invest in real estate for growth potential. The best suburbs to invest in are:
- Oatley (houses) — annual growth of 9%
- Grays Point (houses) — high demand and annual growth of 8.1%
- Bronte (houses) — annual growth of 8%
- Macquarie Park (units) — annual growth of 7%
- Annandale (units) — rising market demand
These suburbs are experiencing rising demand and/or steady growth in prices in a time where other suburbs aren’t doing so well. Suburbs like Parramatta, Blacktown and Rosehill are considered risky places to invest due to the oversupply of apartments putting downward pressure on rents and prices.
Making the Right Investment Choices
It’s important to remember that making good investment choices is about more than just choosing the right suburb. Success with investing in rental properties is all about looking for what it is that brings sustained demand and therefore generates growth. This includes things like quality schools shops, restaurants, public transport and green space.
Need Property Investment Tips in Australia?
If you’d like advice on how to invest in property or services relating to buying and managing investment properties in Australia, speak to the experienced team at H&T Realty in Sydney. Countless investors rely on our experienced consultants for property investment strategies and property investment tips. Call us today on 02 8045 5388 or contact us online.
