NSW real estate: 50 best suburbs to invest in 2021

While Sydney may be a tough market to crack, there are still major opportunities for investors throughout the city. Find out the top 50 suburbs for those looking to make a savvy buy.

Sydney’s housing boom isn’t done yet and there are multiple city pockets where budding property investors can still cash in on rising prices – especially in the city’s west and coastal regions.

A study powered with realestate.com.au price and rental data has revealed the top markets for investors and they include a range of areas with a rare mix of strong growth potential and higher rents.

The bulk of the suburbs listed among the top 50 locations for investors were in Western Sydney and included clusters of suburbs in the Penrith, Blacktown and Liverpool regions.

MORE: Slick way banker bought 5 homes with $40k

How much average Aussie has in the bank

One of these clusters stretched from Mount Druitt to Penrith and encompassed Cranebrook, St Clair, St Marys, Mt Druitt and Kingswood, more than 40km west of the Sydney CBD.

Southwest suburbs flagged as investor hot spots were Moorebank, Yagoona, Cabramatta and the Liverpool CBD – and, further south, Minto, Leumeah and Campbelltown.

There were also a number of Central Coast suburbs flagged as high performing markets for investors, including Gosford, Wyoming, Woy Woy and Gorokan.

Zoe Emanuel and Michael Rensford are currently on the hunt for another investment property. Picture: Sam Ruttyn

Many of these areas were identified as having larger sales volumes and rising demand from tenants, while prices had a long track record of growth.

They also had higher rental yields, signalling it was easier to find properties where the rents covered most, if not all, of investors’ mortgage costs.

Realestate.com.au economist Paul Ryan said the suburbs “ticked all the boxes for property investors”.

“They have not simply had a recent price rise, increases have been over a long period and rental demand is growing,” he said.

Mr Ryan said another common theme linking the top locations for investors was broad appeal among a diverse demographic of homebuyers and tenants.

This was usually the result of good transport links, lifestyle elements like coastal or mountain settings and, in some cases, larger houses at lower prices, he said.

It comes as housing experts warned the city’s extended Covid lockdown failed to cool the market and many forecast prices to continue rising into 2022.

Sydney’s median home price, based on sales of units, houses and townhouses, jumped another 2 per cent, or about $20,000, over July.

And many of the forces that helped drive prices up at record margins over the past year – a typical house is about $200,000 pricier than it was in 2020 – remain unchanged.

These included strong buyer demand from those capitalising on low interest rates and a severe shortage of available properties.

My Housing Market economist Andrew Wilson said lockdown could even be exacerbating these trends and extending the recent bull run of price increases.

This was because 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.

Buyer activity, meanwhile, remained at inflated levels, Mr Wilson said.

Given the promise of more price growth, investor activity has been picking up.

Home loan approval data from Mortgage Choice showed demand for investment loans increased in 2021 after a two-year low in mid-2020.

Houses in Kellyville are great buying for keen investors.

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.

Buyer’s agent Lachlan Vidler, director of Atlas Property Group, said other investors were preparing to make a move after seeing spectacular price rises this year.

“Some people now have massive equity in their homes because of this boom and they want to tap into it to buy investment properties,” Mr Vidler said.

Unit buyers should be targeting areas like Liverpool.

“Others are sitting on cash reserves. A common conversation we get is people saying their money is sitting in the bank doing nothing. They feel they need to buy property soon, before (the money) loses value.”

Inner west residents Zoe Emanuel and Michael Rensford said they hoped to buy an investment property soon but were anxious about just how quickly prices were rising.

“Everything is snapped up quickly and the properties are usually overpriced for what they are,” Mr Emanuel said.

“But I also feel like if you are in a position to buy, if you can get the finance, there is no time like the present. There is so much opportunity.”

Originally published as NSW real estate: 50 best suburbs to invest in 2021