5 Things Investors Should Know About The Eastern Suburbs

5 Things Investors Should Know About The Eastern Suburbs

Mark Taylor,

Investing in property in the Eastern Suburbs is appealing to many people, and for good reason. This part of Sydney is a blue ribbon area, still has capital growth potential and is always highly in demand. Here’s what you need to know about purchasing an investment property in the east.

The lure of investing in Sydney’s Eastern Suburbs is easy to understand. Not only is this area close to the CBD, it has excellent transport, infrastructure, quality beaches and beautiful views. If you’re looking to invest in the Eastern Suburbs, here are five things you should be aware of.

1. It’s A Blue Ribbon Area

Sydney’s Eastern Suburbs are highly sought after, and for good reason. This metropolitan region, which according to data from the Australian Bureau of Statistics includes the Woollahra, Waverley and Randwick local government areas, features such exclusive suburbs as Vaucluse, Double Bay and Bellevue Hill.

This picturesque part of Sydney is also home to spectacular beaches (such as Bondi, Coogee, Maroubra and Bronte) and a high-ranking university, with the University of NSW in Kensington.

2. It’s A High Demand Area For Families

Proximity to excellent educational opportunities (with an array of quality schools and a university) is one of the reasons why an increasing number of young families are gravitating towards the Eastern Suburbs. According to figures from the recent Census, 56.5% of households in this area are made up of families with children. This is slightly up from the 2011 figures. 

Specifically, harbourside Watsons Bay now has 53% of households with children, and many of nearby Rose Bay’s residents are couples with young kids. 

3. There Is A Significant Rental Market

Renters make up a significant portion of the Eastern Suburbs, which is good news for investors. According to data from the Australian Bureau of Statistics, 45% of occupied properties here are rentals (by comparison, the percentage is 31.8% in greater NSW). Bondi and South Coogee in particular attract more renters than this average, at 54.7% and 50% respectively.

While in general rental prices have now fallen in Sydney, the Eastern Suburbs haven’t been as badly impacted as other areas have been. 2016 Census data lists the median weekly rent as $580, however this does of course vary depending on the suburb and property.

4. It Still Has Capital Growth Potential

Despite property prices increasingly flattening and falling across Sydney, the Eastern Suburbs are still in demand. As outlined in our December market report for Eastern Suburbs investors, this area continues to record an auction clearance rate of over 70%. 

There’s also capital growth potential, thanks to upgrading of infrastructure, such as the new light rail line and WestConnex’s motorway extensions (due to be completed in 2023). These are expected to bring more people into the area as a result and make the Eastern Suburbs even more desirable.

5. Returns Are Strong

While it’s of course dependent on the suburb and type of property you’re investing in, generally speaking, returns are strong in the Eastern Suburbs. According to realestate.com.au data, last year Bondi units experienced a compound annual growth rate of 10.8%, in Elizabeth Bay it was 11.7%, and in Edgecliff it grew to 12.5%.

In such a high demand part of Sydney, vacancy rates tend to be low so while no one can predict the market, it’s unlikely you’ll struggle to get a return on your investment.

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