Potential buyers need to know just how much of a “premium” they’re actually paying for playing in a hot market.
If you're looking to buy or invest in St Mary’s, it's crucial that you know not only “the numbers” – you also need to know what’s just transpired out there. Right up front you need to understand that Sydney's property markets – all the way out to Penrith and Campbelltown – have just been through a massive boom period.
While properties in St Mary’s seem to still be in high demand (CoreLogic RP Data recently reported that they're selling in an average of 40 days), potential buyers need to know just how much of a “premium” they are actually paying for playing in a hot market.
According to CoreLogic RP Data, the median sale price in St Mary’s increased by 30.3 per cent in 2015. This is on top of 18.3 per cent in 2014 and 14.8 per cent in 2013. Much of this growth is aligned with the current boom, which I addressed in a recent article about investing in Sydney's western suburbs.
However, our own research confirms that sellers of properties purchased just three and a half years ago are demanding up to 75 per cent more than they bought for.
As of 12th February 2016, realestate.com.au shows that the median sale price is $350,000 and the median rent is $300 per week. This represents an average gross rental yield of just 4.5 per cent.
With 249 rental properties available on realestate.com.au today, the most expensive is a five-bedroom house at $570 per week and the cheapest is a one-bedroom unit at $240 per week.
According to SQM Research, the current vacancy rate for St Mary’s is 3.2 per cent and the results show an exponential increase in vacancy rates from July 2015 to December 2015 – possibly the result of all those exuberant first-time investors buying in at any price.
Want proof – sellers cashing in?
The current owners of a two-bedroom townhouse in Marsden Road, St Mary’s, purchased the property in 2012 for $260,000. It is currently on the market for $429,000. RP Data’s Desktop Valuation suggests the property is worth approximately $412,000.
In a little over three short years, this property has almost doubled in asking price as a result of the “Sydney Boom”.
Caveat Emptor: be very careful if you're looking to buy in the western suburbs of Sydney – any suburb in Sydney in fact – as asking prices are hugely inflated due to the 2014/15 property boom.
Kevin Lee is the property investment expert and buyer's agent at Smart Property Adviser.
Kevin specialises in helping investors identify and acquire positive cash flow properties that generate high rental returns, enabling his clients to grow their portfolios.
Kevin's free report, How To Turn Your Negatively Geared Property Into A Positive One In 3 Steps – Without Selling, is available at www.smartpropertyadviser.com.au.