PROPERTY | DALLAS SHERRINGHAM
NORTH Parramatta units are still a popular choice amongst real estate investors in 2021 according to a survey of the top 50 postcodes in NSW.
The suburb came in 36th in the top 50 ranked areas with investment unit values in the 2151 postcode growing by 72.2% during the past decade. A total of 135 investment units have sold in 2021.
The 2151 postcode stretches from the Parramatta River through Northmead all the way to North Rocks Shopping Centre.
Nearby Blacktown local government area was rated the best region for investors buying houses and units in the Greater Sydney Region.
The survey by a leading real estate internet sales site placed the houses in the Blacktown LGA top of the tree in a study of the 50 most popular investment property regions.
In 2021, a total of 482 investment houses have sold in the 2148 postcode representing a 10-year growth rate in median house prices of 109%.
The rental yield was 2.9% this year and the rental demand annual growth averaged 3.3% over the 10 year period.
The Kellyville region covering the 2158 postcode was fourth on the list with 413 investment houses purchased, representing an annual growth rate over the 10 year period of 111.4%.
Penrith and Liverpool were close behind placing sixth and seventh in the number of sales.
In Penrith, units were the most popular type of investor property with 333 sold this year, representing a growth rate of 94.3%.
Liverpool units were the most popular investment properties in the 2170 postcode area with a 65% increase over the period and 302 sales this year.
Blacktown units also featured in the top 10 list of suburbs attracting investors with 250 sales in 2021, a 10 year increase of 79.5%.
Riverstone 239 house sales, Harrington Park 235, Cranebrook 225 and St Clair 231 were all in the top 15 and rose in value between 101% and 105% over the decade.
Leading real estate agent John McGrath said: ”We’ve never had a year quite like this one’.
“Investor activity has been increasing every month since the start of 2021, while first home buying began declining in February and continued to do so for three consecutive months,” Mr McGrath said in the Real Estate Conversation.
“In January, investor loans represented 23% of the total loans market – a record low. They have since gone up to 28%. This is below the long term average since 2002 of 36%.
“Conversely, first home buyer loans in January represented 25% of the market and this has now gone down to 21%. This is still above the long term average of 16%, so activity might be dropping off a bit but it still remains high.
“This is great news for sellers of sub-$1.5m houses and units. Any lost demand from first home buyers is being more than offset by new activity from investors and this will keep prices growing for now.”
Mr McGrath said this was important because the unit market was most at risk of feeling the effects of negative population growth if demand from local first home buyers and investors ran out before the international border opens. He said was expected by the Federal Government in mid-2022.
“Although the COVID boom has been going since last year, investors are only now getting in on the action. They’ve sat on the sidelines mainly due to the rental moratoriums and uncertainty. No one wants to make big financial decisions when their job might be at risk.“
“However, the general economic outlook for the country is much better now, despite what is happening in Sydney with the Delta variant at the moment. Most investors now know whether they have job security or not, so the path has been cleared to invest if they can.
“The investment landscape looks great,” he said.
Australian home values lifted 12.4% across the combined capital cities in FY21, and a remarkable 17.7% across the combined regions.
The average national weekly rent went up 6.6% in FY21 according to CoreLogic, which was the fastest pace since 2009. Growth was best in the regions at 11.3% vs 5% in the capitals.
Sources: McGrath RE report, realestate.com.au