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Is Now the Time to Invest in Lower North Shore Property?

If you’re in the position to buy an investment property, there are a few things to look out for when it comes to making the right decision.

We spoke to the experts at Ray White Lower North Shore Group for their insights on what suburbs are experiencing high rental yields right now, and where there is still potential for capital growth.

Ultimately the success of property investments in growing purchasing power depends on the ability for your property to grow in value and earn rental income says Michelle Lucas, Director of Property Management for Ray White Lower North Shore Group.

When can we move in? This stunning property at 2/33 Milson Road, Cremorne Point recently sold.

There exists a trade-off between the two and while there may be some properties that lie in the “sweet-spot” of the two benefits, often we see that strategically buying properties in suburbs that maximise one benefit can be the most effective strategy so,

  1. Do you go for capital gains? 

This strategy involves buying in a suburb that shows promise for significant capital growth  in. So when it comes time to sell, the difference between your purchase and selling price contributes to narrowing the gap between your budget and the price of a more expensive property.

  1. Or, do you go for high rental yields? 

This strategy involves buying in suburbs where the rental yield is high, maximising the cash flow from the property investment. This strategy is attractive for potential investors who prefer more reliable income returns and seek to use this additional cash flow to build savings that will, in turn, assist their ability to purchase their desired future property.

The key to choosing a strategy requires an adequate understanding of trends driving those suburbs which are currently seeing the greatest financial returns; be that of capital gains or rental yields.

Looking closely at the North Shore suburbs that are at the beginning of a potential medium-term price appreciation cycle and which may be suitable for ‘capital gains investors’. The top 10 suburbs that have experienced the highest three-month growth, are Kirribilli, Artarmon, Cremorne Point, Lane Cove, Wollstonecraft, Willoughby, Crows Nest and Waverton. Investors might find it attractive to invest into on the basis that they have momentum for further appreciation.

Interestingly Kirribilli tops the list for three-month house price growth and Cremorne Point tops the list for three-month unit price growth.

In Kirribilli, seven house sales have been recorded, contributing to a rise in local property values. One noteworthy sale was 27A Elamang Avenue, held by the same family for generations, which achieved the third-highest sale price ever recorded in Kirribilli.

In Cremorne Point, the apartment market has seen significant movement in the past three months, with approximately 30 units sold. Interestingly, a large portion of these sales involved high-end, luxury apartments that have traditionally been tightly held by their owners, indicating a potential shift in the market.

When it comes to high-yields, Greenwich tops the Lower North Shore based on its median unit rental yield of 5 percent over the past 12 months.

Interestingly, in the Lower North Shore rental yields on units have outperformed housing yields over the past 12 months. The top suburb based on median house rental yield is Lane Cove at only 2 percent. The difference between the average sale prices of units and houses is greater than the difference between the average weekly asking rent of units and houses – this is why units typically earn greater yields.

“The Lower North Shore’s unit market is strong for rentals,” says Michelle Lucas.Look for modern, well-maintained units in secure buildings close to shops and cafes which offer air conditioning and views.”

“High-demand rental properties often have lower vacancy rates, leading to a more consistent income stream.”

This data has been supplied to us by the Ray White Lower North Shore Group, who have offices in Mosman, Willoughby, Crows Nest and Cammeray.

If you would like to discuss the market in detail, please get in touch with them at raywhitelowernorthshore.com.au.

 

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