NSW Sydney - return of 5% gross yield

5% gross yield seems to have historically been a fair weather marker for Sydney in regards to investment properties.

During the boom gross yields got as low as 2-3% but with recent price falls there are more and more nice little apartments moving towards 4/5% yield levels.

While rents are declining also, they are declining slower than price falls. 5% vs 12% down so this is narrowing the gap over time...

Someone I know bought this as they love Bondi, and its only about 4.5% gross yield.

If premier suburbs keep improving their returns like this they will start showing value in next 12-24 months.

Sold 11/58 Campbell Parade, Bondi Beach NSW 2026 on 22 May 2019 - 2015210099 | Domain

Has anyone else seen particular suburbs where the price falls have really improved yields vs rent falls?

 

How come this doesn’t have water views? I know someone who owns an apartment in the very next building (their view is 30% affected by Icebergs) and had to take it off Airbnb because building hot water stopped working for months and they got too many bad reviews. It has really old plumbing and very tiny bathroom made it harder to install a internal water heater.

 

Rent reduction has a lag. Once it has come down, it'll effect prices which effects yields and continues to do so until supply is soaked up.

 

Market rental opinion: apx $700pw (The video they mention 700-750)

Very busy road and no parking, I'm not sure about $700-750 per week?

 

So negative on value. That’s why it’s 100-150K cheaper. Both buildings were about 15% higher 18 months ago

It’s all relative

 

Campbell Parade is not THAT busy/noisy but if you bought that and own a car, you'll be acquainted with every single backstreet and laneway within a 1km radius (within 48 hours of moving in).

Would make a perfect Airbnb pad though*
*tourists with cars need not apply

 

Two bedrooms opposite the beach should definitely get $700+, how much more depends on if you can line up the lease period with the warmer months. Property is north facing but unfortunately means it doesn't get any view.

 

AirBNB is definitely a way to achieve 5% yield in that location

 

Up to 15% of available rentals on short term letting in that area.


https://www.google.com/amp/s/amp.sm...gh-demand-sydney-suburbs-20181108-p50ep5.html

 

Bondi will always have demand and generally year round. The air bnb option can be a risky one for some but given the right area you’re fairly assured of having a constant tenant with a much higher yield overall.

- Andrew

 

imo it is fair value - definitely some upside in the next 12m all imo.

 

only main negative for me is lack of parking. longer term CG will not be as good but given location to beach, passive income should be fine.