Eastern Suburbs Investor Hot Spots For 2018

Eastern Suburbs Investor Hot Spots For 2018

Mark Taylor,

Sydney’s Eastern Suburbs consistently perform well for property, achieving high capital growth and rental yields. We take a look at some of 2018’s top investor hot spots in Sydney’s East.

Sydney’s Eastern Suburbs are consistently strong performers for property investors, with high capital growth and great rental yields across the board. Despite a flattening market, 2018 is no exception, with many suburbs showing great growth potential for the coming years. We take a look at some of the top investor hot spots in Sydney’s east. 

Randwick 

After a dip in growth in 2017, Randwick is on the up again and is a key suburb to watch. New infrastructure is typically a strong indicator of future growth potential, boosting desirability and attracting more buyer and renter interest. The new light rail line that will extend from Randwick to the CBD is good news for the suburb’s capital growth over the coming few years, as well as for rental performance. According to the latest CoreLogic figures, Randwick’s capital growth currently sits at 9.46%, while rental yield is high and vacancy rates low:

  • Capital growth (house): 9.32%
  • Capital growth (unit): 9.46%
  • Rental yield (house): 3.4%
  • Rental yield (unit): 2.2%
  • Median house price: $2,500,000
  • Median unit price: $947,500
  • Vacancy rate: 1.9%

Kensington 

Kensington has experienced a population boom in the past 7 years, with 17.4% more people moving to the suburb between the 2011 and 2016 Censuses. Demand for rentals is high as a result, particularly among students from neighbouring University of New South Wales or those who have recently started their professional career. 

House prices have almost doubled in Kensington since 2014 and capital growth remains strong. The biggest growth potential in Kensington is in the house market, with capital growth of 15.81%:

  • Capital growth (house): 15.81%
  • Capital growth (unit): 8.47%
  • Rental yield (house): 1.9%
  • Rental yield (unit): 3.4%
  • Median house price: $2,702,500
  • Median unit price: $905,000
  • Vacancy rate: 3.1%

Surry Hills 

While capital growth has started to slow in Surry Hills, the inner city suburb remains one of the most popular areas for rental properties in Sydney. 64.1% of properties are rented, rental yield is at 4% and vacancy rates are at 2%. It’s little wonder that Surry Hills is among the most searched suburbs for rentals on domain.com.au: 

  • Capital growth (house): 1.83%
  • Capital growth (unit): 7.87%
  • Rental yield (house): 2.8%
  • Rental yield (unit):  4%
  • Median house price: $1,733,000
  • Median unit price: $855,000
  • Vacancy rate: 2%

Point Piper 

Regarded as one of Australia’s most affluent suburbs, Point Piper investments will come at a higher price but will offer long-term returns, thanks to strong capital growth. Investors who can afford the median unit price of $2.81m will enjoy annual growth in the realm of 10.5%: 

  • Capital growth (house): N/A
  • Capital growth (unit): 10.5%
  • Rental yield (house): N/A
  • Rental yield (unit):  1.9%
  • Median house price: N/A
  • Median unit price: $730,000
  • Vacancy rate: 3.2%

Centennial Park 

Following four years of growth as high as 18.82% for units, prices have declined in Centennial Park, though rental yields remain high at 3.9%. As well as the ongoing appeal of the park itself, parts of Centennial Park will also benefit from the new light rail, so further growth looks promising over the next few years:   

  • Capital growth (house): N/A
  • Capital growth (unit): -7.19%
  • Rental yield (house): N/A
  • Rental yield (unit):  3.9%
  • Median house price: N/A
  • Median unit price: $765,000
  • Vacancy rate: 2.8%

Beachside Suburbs: Coogee, Bondi And Tamarama

While nothing new, Sydney’s beachside suburbs continue to perform well for those who can get into the market, both on capital growth and rental yield. Units in Bondi Beach and Bronte are recording capital growth of 14.8% and 14.4% respectively, while Coogee and North Bondi both have rental yields above 3%. 

Capital Growth And Investing For The Future 

Choosing your investments strategically is essential in building a successful portfolio that will deliver results long-term. For guidance on how to invest for capital growth, we’ve created this Investor Guide to Building Your Wealth With Capital Growth. Alternatively, contact our team of specialists  to discuss your options. 

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