Prime locations and off-the-plan apartments in Sydney
Choosing the right location for your first investment property is a fundamental factor to consider. First-time investors can, at times, be a little unsure as to where the ideal suburb may be – given their budget, area profile and property forecasts and whether the property is an investment or owner-occupied. Whether acquiring an off-the-plan apartment or developed apartment in Sydney, choosing the right suburb for your investment property is essential to the asset’s profitability.
Setting your intentions for the asset is also recommended before committing to the investment property. Identifying the objectives behind purchasing your property, can then determine the type of property you then search for. As an example, purchasing an off-the-plan apartment may be more suitable for a couple’s first home, whereas larger families may find greater benefit in purchasing a home and rebuilding.
Another contributing factor when choosing between a house, off-the-plan apartment or another dwelling in Sydney is that of personal lifestyle needs of the purchaser. If to accrue a property portfolio, the return on investment is one of the most valuable metrics to consider.
What determines property value?
Contributing factors that drive market demand and supply in Sydney, include:
● Economic growth
● House affordability
● New builds & supply
● Interest rates
● Population growth
● Social & cultural factors
Many people plan to live in a new off-the-plan apartment in Sydney as an affordable way to live in a more desirable suburb, and that closely ties in with their socio-cultural lifestyles.
However, if you are looking for an investment property, here are some factors you should consider when selecting the perfect location for your investment property.
Off-the-plan apartments providing long-term capital growth in Sydney
If you are looking at buying a new off the plan apartment in Sydney for long-term capital growth, it is vital to search for suburbs with long-term growth potential. This includes areas where infrastructure development plans are in the works for the near future. These locations are not desirable in the immediate term but can be expected to become more so in the future.
Off-the-plan apartments in Sydney offering immediate rental income
On the other hand, if you are looking for an investment seeking shorter-term cash flow, choosing a location where the rental yield is high might be where you should be looking. To see whether your rental income is enough to outweigh mortgage repayments, you must ensure that your gross annual rental yield as a percentage of the value must be more than 6% – including maintenance costs and management fees. However, if this is not possible, try and choose a location where you can hit as close to this figure as possible.
Consider tenant demographics when investing in an off-the-plan apartment in Sydney
Some people also take the approach of choosing a location-based around specific tenant types. Investors like to choose off the plan apartment locations in Sydney where there are more families over students or young singles. Whereas, on the other hand, many other investors prefer young singles and students over families.
Low-maintenance apartments in central areas usually attract young singles and university students, whereas new off the plan apartments in Western Sydney and other suburbs attract families and singles. The location you choose will depend on the specific tenant demographic you are after!
Is your off-the-plan investment property in Sydney a “walkable” suburb?
Location is integral to choosing a great investment property. Besides the factors mentioned above, what makes a good location? While there are a lot of different factors that come into play, easy access to facilities ranks near the top.
People love to be in walking distance to transport, shops and retail options, providing convenience and ease on an everyday basis. This “walkable lifestyle” is one of the most influential trends attracting buyers and tenants.
Research has shown that home values in Sydney’s walkable neighbourhoods have outperformed the rest of the city, attracting a 20% premium. This is also prevalent in many suburbs overseas where studies have indicated properties with average levels of walkability attract a premium.
Not only are walkable suburbs an excellent investment, but they also offer various health and economic benefits. Being close to shops, parks, and public transport improve people’s overall health and wellbeing. With the population of Sydney on the rise and our cities becoming denser, walkability and easy access are becoming an essential requirement.
Many families are choosing balconies and new off-the-plan apartments over backyards and houses. With residents spending more time out and about, walkability is now becoming extremely important to many tenants.
New off-the-plan apartments in Sydney are being developed in many central locations such as Western Sydney, Inner city and Northern Beaches, providing convenience and ease for tenants.
These off-the-plan apartments in Sydney are in close to amenities luring potential tenants to rent these properties. Living in the 21st century, everyone has become super busy, living a hectic and frantic life. Cities are becoming more congested, and convenience is becoming everyone’s top need. This is why choosing a ‘walkable suburb’ in Sydney will help you secure a prime investment, as many are prepared to pay a premium to be close to transport, shops and amenities.
At Cite Group, we have a variety of new residential buildings in prime locations. Our team understands the property market and aims to use our experience and expertise to maximise the potential for investors.
Learn more about us here.