Parts of the Eastern Suburbs are delivering strong returns for investors, defying a Sydney market that has seen rents fall overall.
We look at the suburbs and property types that are putting a smile on investors’ faces.
Coogee houses in top demand
Topping the list of the best performing rental properties in Sydney is Coogee houses. Rents for homes in this beachside suburb rose 23.40% over 2018, according to Domain. That means the average weekly rent for a house in Coogee is now $1,370.
Coogee houses have been in strong demand generally, with families increasingly finding there the perfect balance of beachside living and proximity to transport, good schools and, most importantly, employment centres such as UNSW and Prince of Wales Hospital.
One trend we’ve noticed in Coogee is families who have sold their home at the peak of the market happy to rent for a period while they wait to make a move. We expect this to eventually translate into strong sales growth for Coogee when the market does turn, meaning now is a good time to get in and buy ahead of the market.
Bellevue Hill: a big year and an even brighter future
Another stellar performer has been Bellevue Hill. Here, rents for houses rose 19.8% over 2018 according to Domain to stand at $2,395 a week. Interestingly, Realestate.com.au puts the average rent for a Bellevue Hill house higher at $2,475 a week.
Whichever numbers you take one thing is clear: Bellevue Hill is the most expensive suburb in Australia in which to rent a house.
But why have rents risen so dramatically here in the past 12 months? We think it’s tied to the fact that Sydney’s prestige property sales market has been strong for some time and shows few signs of slowing. This is evident in the fact that Bellevue Hill actually recorded Australia’s highest auction clearance rate for the December quarter at 80%.
When auction clearance rates are high it means people are missing out and many of them, especially families, will be looking to rent, especially if they’ve already sold their home.
And in the apartment market
With a red hot prestige market, it’s probably also little wonder Point Piper apartments are in demand with renters too. The average rent for units in the suburb lifted 10.6% in the 12 months to December 2018 to $995, according to Domain.
Another strong performer has been Dover Heights where the median apartment rent rose 9.5% to $750.
Both suburbs are popular with a combination of downsizers, families and professionals who demand the best quality property close to the CBD. And again, many of these renters are biding their time until the property market turns meaning there could be a lot of pent up demand when the sales market springs back to life.
Thinking of buying or selling in Sydney’s East in 2019? Get in touch with our team today.
Sydney’s Eastern Suburbs Market Snapshot
A detailed annual assessment of the property market focusing on the Eastern Suburbs of Sydney, Australia.