Make Your Move: Sydney’s top suburbs for property investors revealed

Property investors have a window of opportunity to cash in on changing conditions in the housing market, with a new study showing the top 20 locations for house and unit buyers.

Plummeting housing demand and an explosion in rents have created a window of opportunity for property investors to get cheaper Sydney properties with lower holding costs.

And the most fertile hunting grounds to find these deals are in Sydney’s southwest, the Central Coast and the Blacktown region, a new study has revealed.

The Make Your Move report, powered with PropTrack data, analysed price movements, rents, yields and tenant demand in every suburb in the country to determine the “best” locations for investing.

Suburbs deemed favourable for investors had higher rental returns, soaring demand from tenants and a history of strong growth in local property values.

Sarah and Giles Keay, with son Ryder, 9, at their Allambie Heights investment property. Picture: Tim Hunter.

Based on these metrics, the suburbs of Tumbi Umbi, Kanwal, Lake Haven and a range of other Central Coast pockets were ranked the top suburbs for house investment in the Greater Sydney area.

Carnes Hill and West Hoxton, in the Liverpool region, Leonay in the Penrith region, and Camden, Catherine Field and Glen Alpine, in the outer southwest, were among the other top ranking suburbs for house buyers.

Apartment investors would get the best mix of returns, capital growth and tenant demand in West Gosford, Gorokan and Narara on the Central Coast, along with Ropes Crossing in the Blacktown area.

PropTrack economist Angus Moore said the Central Coast and parts of Sydney’s west dominated the rankings because, compared to the city average, rents were much higher relative to home prices.

Property prices were also continuing to grow in some of these suburbs, despite the recent market downturn, due to an influx of “lifestyle” buyers wanting extra space, Mr Moore said.

The economist noted investors appeared to be capitalising on some of the improved conditions.

“Investment activity has been rising,” Mr Moore said. “Vacancies are now much less of a risk than they were in the early pandemic.

“At that time, rents were dropping in some areas, particularly the inner city, and some investors were selling properties and getting out of the market.”

Nathan Birch, the founder of buyer’s agency Binvested and the owner of more than 200 properties, said the “softer housing market” made it an ideal time to buy an investment property.

This property on Kingfisher Place in Tumbi Umbi is for sale at $849,000.

“Fear is everywhere because rates are rising. This is the time to get the best deals,” he said, adding that it was a similar climate to 2008, when the global financial crisis was spooking buyers.

Prices had fallen across most suburbs during that period but the market quickly recovered in 2009 and the buyers who purchased during the slump got quick equity growth, Mr Birch said.

He noted recent rises in rents – Sydney house rents climbed 20 per cent over the past year – were well above recent interest rate hikes.

“Mortgage costs have gone up, but so have rents. You have to know where to look, but there are opportunities to get properties where the rent is more than the (repayments),” Mr Birch said.

Positive Property founder George Markoski, who owns 40 properties around the country, said cash flow should be investors’ top priority.

“If you buy and end up being highly negatively geared, you’ll be stuffed because the Reserve Bank are going nuts with rate rises,” he said. “The best properties right now are the ones that are very affordable to own.”

Mr Markoski said investors had more opportunities to buy cheap real estate than last year.

“It’s pretty lukewarm, which is a better time to make money than when the market red hot and peaking,” he said.

“What people need to realise is that prices falling in a lot of places but, over the long term, migration will be picking up this year.

“Those people will need a place to live and, because many builders are going broke, that will be hard to do. There will be less rentals available. There will be less properties to buy. Prices will go up again.”

Investor Sarah Keah said paying off her investment property in Allambie Heights has been much cheaper in recent months because of rent increases.

“It’s been a great time to be an investor,” she said. “The rental market is really picking up. We’ve been getting a lot of tenant applications.”

Ms Keah is selling her property on Churchill Cres, which includes a granny flat and main house, to free up some cash and said she will miss having a “nice little earner”.

McGrath Manly agent Susie O’Brien said buyer inquiries from investors were rising, with many cashing in on the stiff competition among tenants.

“There is a real shortage of rental houses in lifestyle locations, especially pet-friendly homes, and those are the tenants who will pay more.”