Buyers Agent Sydney - Buyers Advocate for Real Estate Property Investment

Buyers Agent Sydney

Buying Investment Property in Sydney

You are looking to purchase a property in Sydney? The first question, as your buyers agent / buyers advocate, we will be asking, is what part of Sydney are you most interested in? Followed by, is this a property to live, work or an investment property you are looking for? I.e. What is your current motivation in relation to your future intentions?

First let’s start with the 3 classifications of Sydney

1) Sydney the Capital of New South Wales

Also referred to as Greater Sydney, is Australia’s largest populated city with over 5.2 million people. From 2011 to 2019, Sydney’s population has increased by 90,000 to 467,000 each year.

ABS data findings, between 2018-2019, states that the 1.8% population growth rate was attributed to natural increase (i.e. births) and overseas migration. Included in this growth rate, and why the numbers were not higher, was a result of the approximately 28,000 people who migrated to other locations in Australia. With the change in workplace set-up and technology improvements and acceptance, post COVID, there is a good chance these numbers will continue to grow.

There are 650 suburbs that encompass the metropolitan area of Sydney - spanning 70m to west, 60km to the south and 40km to the north.

The ABS classifies Greater Sydney extending from The North (Wyong and Gosford) to the Royal National Park in the South, following the coastline in between. In the west, Greater Sydney includes the Blue Mountains, Wollondilly and Hawkesbury.
Greater Sydney is home to 35 local councils. Local councils are an important resource for researching property potential and growth opportunities as they can provide information around new and future infrastructure, local resident and business growth and demographic trends and planned upgrades for the local area. Your local council can be a valuable support when it comes to understanding the area, their future plans and how you can align prospective initiatives.

In a 2016 ABS report, the median age in Greater Sydney was 36 years old. The average household size was 2.8 persons. The average monthly household income was $7,583. The average monthly household mortgage payment was $2,167. The median monthly household rent payments was $1,906. This is topline data. You can drill down further and explore male and female ratios, average cars per household, for example.

What these numbers provide us is an insight into how Greater Sydney is changing - particularly in respect to how people live. In 1975 the median age in Australia was late 20’s. How does this number alone impact how you invest in property? The increase in the median age in Australia is a result of the ageing population (between 2006 and 2016, the 50-74 year old age group grew by 45%), the large increase in migration in the 20-34 age group since 2006 and the lower birth rates.

These three changes have equated to more people downsizing from the big family home to living in units and townhouses and more people are living alone - prompting an increase in developments close to major cities. What was once the iconic Australian dream of moving to the coast (north or south) in retirement, is becoming ‘move into a smaller place close to where you already live or closer to a major city.’

2. Sydney the City

As of June 2019, Sydney City was home to an estimated 246,343 residents. The ABS 2016 data for the ‘Commonwealth Electorate’ records the number lower at 200,181 residents, with an average of 2.1 persons per household.

Sydney city topline numbers reported a median monthly household income of $8,376, a median monthly mortgage repayments of $2,500 and median monthly rent of $2,474 and median monthly mortgage repayments $2,500. All these numbers are higher compared than Greater Sydney.
This is local Sydney, which is covers 26.15 square kilometres of areas and includes the following 33 suburbs:

Alexandria, Annandale, Barangaroo, Beaconsfield, Camperdown, Centennial Park, Chippendale, Darlinghurst, Darlington, Dawes Point, Elizabeth Bay, Erskineville, Eveleigh, Forest Lodge, Glebe, Haymarket, Millers Point, Moore Park, Newtown, Paddington, Potts Point, Pyrmont, Redfern, Rosebery, Rushcutters Bay, St Peters, Surry Hills, Sydney, The Rocks, Ultimo, Waterloo, Woolloomooloo, Zetland

3. Sydney the Suburb

As of 2016, there were 17,252 residents living in Sydney, profiling a median age of 30. Younger people living in cities makes complete sense. The average number of people per household was 2.4 persons. The ABS data reports for Sydney Suburb residents a median Weekly household income of $8,445, a median monthly mortgage repayments $2,302 and median weekly rent of $2,990.

Choosing the right Sydney Property Type

The area you choose to buy a property in will also dictate what type of property you buy. This comes back to the decision around your intention for buying a property in Sydney. In the City of Sydney, a greater concentration of high density dwellings, typically matches with young adult and smaller household residents, who are also more likely to be renting versus owning the property. Dwellings that are larger in size are more likely to bring in families.

The reasons why this is valuable information, is that it will dictate future market opportunities and local council planning. For example, you will find high density dwellings more often than not, situated around employment regions, public transport and major cities. Which aligns with the needs of a younger demographic resident.

Other considerations when choosing a property type include:
  • The size of the dwelling
  • The age and structure
  • If there are any ‘heritage listing’ requirements you must adhere to
  • The vision and motivations of the local council the property resides
  • Other conditions that you should be aware of
It is important to ascertain the resident type / demographics as this will also influence the market, particularly during a COVID type situation. Where the capital cities are higher risks than other markets, due to their greater exposure to overseas migration (both Sydney and Melbourne markets are being affected by significant decline in international students.) and the closer proximity of people in their living and working environments.

It is timely for us to also mention the commercial property market. COVID has definitely had a major impact on commercial property in Sydney, but prior to this, the market was already experiencing increases in vacancy rates for the last 10 years. The retail market has been both a cause and effect of the commercial market performance. Gladys lock out laws also hit the bars and clubs of Sydney. Now it’s the cafes and restaurants and offices thanks to COVID. The timing however may prove fruitful if you score a deal and the terms of a lifetime, and can hold onto it for a good period - until the market changes. If you are buying commercial property in Sydney you would want to be looking for as much flexibility with that asset as possible. This also includes how you set-up your loan.

The Cost of living in Sydney

Sydney in respect to cost of living, is ranked 52 out of 478 cities in the world. A family of four on average will spend $5,203 per month, not including rent. A single person will spend $1,426 per month, not including rent.

The cost of living relative to the average income, will influence the future planning of Sydney - all three classifications (Greater Sydney, City of Sydney, Sydney Suburb).

As the cost of living increases, buying a property will become less affordable, which is now in a lot of cases, and therefore more people will rent for their entire life time. 32% of Australian households are rented, 2% up from 2015-16. On the ownership side, 66% of households owned their home in 2017-18 (either with or without a mortgage), a decline in 2% from 2015-16.
The more people renting requires an equal supply of suitable housing that can sustain this growth. In recent years we have seen the supply pendulum shift to an oversupply. Developers cannot build quick enough to maximise the opportunity of this growth.

The bullrush has shined the spotlight on dodgy operators. Not to mention, in some areas, the population isn’t there to support the supply and we have seen / are seeing, properties being sold and rented under market rate - until the population catches up with supply.

In some areas of Sydney this has taken 10 years. If you purchased a property in the hyped up months of an off-the plan development, you may have to wait 5-10 years to see growth, while you wait for the build, market correction, and lack of demand to be overcome.

Sydney Property Pricing

All markets are cyclical, have volatility and were impacted by the 2008 GFC. What’ s important when buying a Sydney property is to look at the long term trends. The graphs below, sourced from Core Logic, covers the house and unit growth across all capital cities. Sydney in both houses and units continues to see solid growth, widening the gap on the other capital cities.
In March 2020, just before we understood and felt the impact of COVID, the data reported by Core Logic, showed Sydney’s property prices increased by more than 10 per cent in the last 12 months, which resulted in the Sydney median house price reaching over the $1 million mark. Whether we see this lasting or not during and post COVID, only time will tell. The fact that it got there once, means it can get there again.

The decision to buy Sydney Property

Sydney is a great market to invest in. Any Sydney Buyers Agent and/or Buyers Advocate will tell you this. The major variables of property investing in the Sydney market, come down to two important factors: The timing of when you buy and when you sell. Whether you can afford buying property in the Sydney market. If this is the case, when is it the best opportunity for you considering your current situation (income, lifestyle, property portfolio as it currently stands, level of risk etc) and the direction you want to head in.

There is no doubt about it, Sydney property will continue to grow, but at what rate and when is the right time for you?

As buyers agents, we buy property across all the eastern seaboard markets intentionally so we can create portfolio diversification - to counter volatility and optimise growth and opportunity in a cyclical market. We buy properties for the beginner to long-time property investors. If you are interested in buying in Sydney let’s have a closer look at each of the major regions:
Eastern_Suburbs

Eastern Suburbs

South Sydney

South Sydney

Northern Beaches

Northern Beaches

Lower North Shore

Lower North Shore

Upper_North_Shore

Upper North Shore

Inner West

Inner West

The Hills District NSW

Hills District

North West

North West

South West

South West

Outer West

Outer West

Parramatta

Parramatta

St.George

St.George

Central_Coast

Central Coast

South Coast

South Coast

Hunter_Valley

NewCastle & Hunter Valley

Woollongong_Illawarra

Wollongong & Illawarra

Southern_Highlands

Southern Highlands

The money is always made in the buying.

Getting this right is crucial to how the asset will support your future needs. Working with a property buyers agent will give you an expansive view before narrowing your property search down into a market and property type.

Contact us


for Expert Property Investment Advice


Telephone

1300 022 482


E-mail

hello@searchpartyproperty.com.au

    Appendices

    Sydney Suburbs
    http://www.population.net.au/sydney-population/
    https://itt.abs.gov.au/itt/r.jsp?RegionSummary®ion=1GSYD&dataset=ABS_REGIONAL_ASGS2016&geoconcept=ASGS_2016&datasetASGS=ABS_REGIONAL_ASGS2016&datasetLGA=ABS_REGIONAL_LGA2018®ionLGA=LGA_2018®ionASGS=ASGS_2016
    https://www.cityofsydney.nsw.gov.au/__data/assets/pdf_file/0017/226421/Map-of-City-of-Sydney-Local-Government-Area.pdf
    https://www.abs.gov.au/AUSSTATS/abs@.nsf/mf/3218.0

    Census Data:
    https://www.cityofsydney.nsw.gov.au/council/our-responsibilities/areas-of-service
    https://quickstats.censusdata.abs.gov.au/census_services/getproduct/census/2016/quickstat/SSC13715

    Greater Sydney Coverage - https://www.cityofsydney.nsw.gov.au/learn/research-and-statistics/the-city-at-a-glance/greater-sydney

    Property Types:
    https://profile.id.com.au/sydney/dwellings
    https://www.corelogic.com.au/news/housing-activity-plummets-while-housing-values-stabilise-april
    https://www.yourinvestmentpropertymag.com.au/investment-guides/step-by-step-guide-to-locating-your-next-investment-property-80779.aspx

    Median Age - https://mccrindle.com.au/insights/blog/40-years-of-change-1975-to-today/

    Household Size - https://profile.id.com.au/australia/household-size

    Cost of living - https://www.numbeo.com/cost-of-living/in/Sydney

    Ageing population:
    https://www.richmanproperty.com.au/impact-of-australias-ageing-population-on-australia-property-market/
    https://blog.id.com.au/2017/population/demographic-trends/australias-changing-age-structure-is-it-all-just-about-ageing/

    % of households rented in Australia - https://www.savings.com.au/home-loans/by-the-numbers-australian-home-ownership-tenancy-statistics

    Sydney property pricing:
    https://www.corelogic.com.au/news/analysing-the-sydney-housing-price-premium
    https://www.news.com.au/finance/economy/australian-economy/house-prices-grow-across-the-country-with-many-cities-now-at-record-highs/news-story/80989168e9900457075116d8078dd9c4
    https://www.smartpropertyinvestment.com.au/research/19768-property-market-update-sydney-june-2019

    Commercial Property:
    https://www.commercialrealestate.com.au/news/trends-and-predictions-for-sydneys-commercial-property-market-in-2020-919364/
    http://www.upaustralia.com.au/lies-ahead-australias-commercial-sector-2020/

    Images: unsplash.com