Northern beaches’ suburb named in list of top 50 investment locations
A northern beaches suburb has been named one of the state’s top 50 investor suburbs where buyers can bank on massive returns.
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A northern beaches suburb has been named one of Sydney’s top investor locations where buyers can bank on maximum returns.
Dee Why has become a favourite pick for savvy property buyers looking to expand their portfolios.
New property data confirms the popular beachside suburb is the area’s star performer and the only local suburb to rank in the top 50 Sydney localities to invest in during 2021.
The booming suburb has been identified by realestate.com.au as a high performer in key investor metrics: rental yields, long-term capital growth and large sales volumes.
Rental yield is the amount of money you make on an investment property by measuring the gap between the owner’s overall costs and the income they receive from renting out their property.
A stellar 10-year capital growth of 78.7 per cent and 452 unit sales in the past 12 months underpinned Dee Why’s number two spot on the list.
Residential sales agent with Cunninghams Real Estate at Dee Why, Matt Nicastri, said the recent spike in new apartments available for sale, such as the Meriton Lighthouse redevelopment in the town centre, hade helped add to the suburb’s popularity with investors.
“But that is not to take away from the returns investors have received in the past couple of years,” Mr Nicastri said.
“That’s because Dee Why has become a cosmopolitan hub, the centre of the northern beaches, especially over the last three or four years.
“It’s popular with tenants because of that cosmopolitan feel, and that’s rare to have in a beachside area.
“Dee Why has all the conveniences and walkability that is really popular. And everyone loved the introduction of the B-Line into the suburb.”
Mr Nicastri said the Dee Why market was now attracting what investors would regard as “ideal tenants” — professional people.
He said investors were looking at units anywhere from $800,000 to $1.3 million.
“That's the real sweet spot.”
The success of Dee Why for investors comes as seven northern beaches suburbs made the list of the top 20 Sydney suburbs recording outstanding house price growth over the last 10 years.
And in the top 20 list of Sydney suburbs with healthy unit price rises, the northern beaches made it six times.
The median price of a Sydney house is currently $1.22 million – about $200,000 more than it was at this time last year, according to CoreLogic.
But price increases were even higher on the northern beaches, where the median price of homes jumped just shy of $500,000 in a year.
The average local home seller was pocketing about $1.7 million in mid-2020 – now they are getting nearly $2.2 million.
A deeper look into the data revealed North Manly recording the state’s third highest growth in median house prices over the past 10 years. While not a beachside suburb, it still recorded a 162.3 per cent growth.
North Balgowlah was the next best local performer at 160.8pc, with Manly close behind with 157pc while Mona Vale recorded 146.3pc cent growth in house prices.
For home unit prices, Manly was the best local performer with 124.5pc, followed by Balgowlah on 119.2pc and then Fairlight on 111.2pc.
My Housing Market economist Andrew Wilson told The Daily Telegraph that the Covid lockdown could be exacerbating these trends and extending the recent bull run of price increases.
He suggested many sellers were withdrawing their homes from the market or delaying their plans to go to auction, putting a freeze on the supply of listings.
Mortgage Choice-Dee Why director James Algar said a rising number of new investors were originally seeking houses to live in but, after getting priced out of the market, were buying cheaper rental properties instead.
The data explained
The list was created by realestate.com.au to feature suburbs in the top half of distribution for three metrics:
1. 10-year median price growth: percentage change in median price in year to June 2021, compared with year to June 2011
2. Rental yield: how much profit you generate from your investment as a percentage, calculated by determining the annual median rent as a proportion of the median price
3. Annual change in rental demand: based on searches on realestate.com.au by “high-intent renters” who have looked at multiple properties, made inquiries with agents, booked inspections, etc.
4. Investor cashflow: the monthly rent a property earns minus monthly mortgage payments (assuming a 30-year mortgage, 80 per cent loan, 2.73 per cent interest rate)
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