I've noticed that buying in Sydney CBD is not something that is mentioned too often. Going by corelogic's data, Sydney CBD dropped around 10% last year, the trough value mark being around December 2016 where the prices of median apartment were almost equivalent to that start of 2015 (~2 years prior), meanwhile apartment prices surrounding the city have risen a lot and in many cases getting very close to CBD prices. I note that in 2014, there was a significant difference between median apartment value in Ultimo and CBD (almost 50% higher in the CBD), now the value is actually higher in Ultimo than CBD based on corelogic data (but of course may be accounted for by having new developments etc). CBD as we know also has scarcity of land, few new residential developments and the council favouring commercial >residential. It also has pretty decent rental yields. Does this mean CBD apartments are currently undervalued? And therefore, do these factors make the CBD a decent place for investment?
I would consider buying on the outskirts of the CBD but not the city itself. Is there even that much difference in price? Note though that I think it is probably the very top of the market in these areas at present
At the moment no, the outskirts of CBD are almost the same price as within the CBD. I note that traditionally, and even just a 1-2 years ago the CBD was significantly more expensive than surrounding areas though. And also what's the reason for not purchasing within the CBD?
Actually I personally think buying in the Sydney CBD would be a fine idea. With your stats for prices check that you are comparing apples with apples. Ie. There hasn't been some run on small apartments/studios only for sale recently whereas the ones from previous years were 3 bedders. And check strata and sinking funds. Not advice.
The numbers are statistical gobbledygook. You are not comparing apples with apples as @Gockie has said. Capital Growth numbers have all strata properties 1brm, 2brm and 3brm lumped in together along with older established and new OTP.
I've been keeping a close eye on CBD aparments and there looks like there's been quite a boom in Sydney CBD despite a lot of other areas in Sydney starting to go flat. Going by core logic data, last quarter alone has moved by almost ~10%. While the strata can be a bit high, the rental yields are still fantastic for Sydney standards. I bought a property early this year - in terms of cg its definitely moved up close to or >10%. I have a ~4.9% rental yield (I rent carpark and room separately to fetch higher yield) and despite the somewhat higher strata fees - I'm still positively geared. Free Suburb Profile report for Sydney NSW (2000)
Sydney cbd is extremely diverse; 3 level penthouses with views as well as tiny hotel rooms, ranging from $150k - over $10 million... We are selling this Sydney cbd one bedroom 201/11 Alberta Street Sydney NSW 2000 - Apartment for Sale #126404478 - realestate.com.au right now --- which is positive cash flow, a block from Hyde park (reluctant sale in order to upgrade our home), brand new kitch&bath, built by Hindmarsh, high qual build. Only 2 yo with excellent dedications ... Comes with BMT depreciation schedule!! Enjoy
Sydney cbd is a s$&thole... The only thing going for it is yields and low vacancies. Strata fees are sky high, many apartments are dilapidated, have maintenance issues, a lot have fire orders on them, defects, severe overcrowding, pest and vermin issues. Even the premium ones have high strata fees and issues not to mention the s&$tfights between the lowlife members on the executive committee that have too much time to waste in other people's business. If you can pick em up cheap go for it but make sure you have the above factored in and make sure the yields and vacancies compensate for all of the above. As a poor I would never touch one but as an investment they're not bad. Wife Has property there they've always been tenanted and rode some good returns over the last 5 years but then again who in Sydney hasn't? Make sure you know who built it and make sure you get the strata report and search to see if there's any fire orders or compliance action on the building Also keep in mind A fair otp buyers are trying to offload because they can't settle. Think Central Park Etc etc
