A new industry report shows property investors can still find good value close to the Sydney CBD, with houses in Waterloo, Rosebery and Newtown emerging as particular opportunities.

The three suburbs are identified as combining the most affordable buying opportunities and highest rental yields for houses within 10 kilometres of the city.

A series of urban regeneration and infrastructure projects planned for the inner-city and inner west will only enhance the area’s investment appeal.

Record housing prices tipped for 2020

CoreLogic’s Best of the best 2019 report identifies last year’s top-performing suburbs, nationally and in each major city, across a number of measures including median value and rental yield.

Nationally, the property information group notes 2019 was marked by the largest and longest housing price correction on record, followed by a fast-paced rebound in values in the second half of the year.

Looking to the year ahead, it anticipates housing prices will continue to rise, reaching new record highs in 2020.

“However, we expect the rapid rate of capital gains seen over the second half of 2019 to lose steam as stock levels rise and affordability deteriorates,” it adds.

Inner-city performs strongly for investors

Suburbs in the inner-city and inner west performed well for investors in 2019, delivering the highest gross rental yields for houses within 10 kilometres of the Sydney CBD.

Alexandria, Erskineville, Redfern, Darlington, Waterloo, Rosebery, Chippendale and Newtown all featured in the top 10 suburbs in this category.

Median weekly rents for houses in these suburbs ranged from $780 in Erskineville to $950 in Chippendale, with rental yields of between 3.5% and 3.8%.

Rosebery and Waterloo featured on the same list for units, delivering a weekly median rent of $680 and $720 respectively and a rental yield of 4.6% and 4.5%.

They also joined Newtown on the list of 10 suburbs with the lowest median value houses within 10 kilometres of the CBD.

Waterloo houses had a median value of $1,168,372, while Newtown and Rosebery recorded median values of $1,386,469 and $1,389,239 respectively.

The results suggest the three suburbs could present a good value investment, combining good rental returns and the potential for capital growth.

The perfect time to invest

Add to these figures the many infrastructures and urban regeneration projects planned for the inner city and inner west and it could be the perfect time to buy an investment property in the area.

The planned Sydney Innovation and Technology Precinct promises to create our own Silicon Valley in Redfern and North Eveleigh, the new Inner City High School opens on Cleveland Street this year and the Sydney Light Rail is up and running.

The Alexandria Park Community School redevelopment is underway, while the huge Sydney Metro project will transform train travel right across the city.

These developments will only add to the appeal of living in these vibrant communities and could attract more interest from property investors.

Contact me if you’re looking to buy an investment property in Sydney’s inner city. Our team would be happy to advise you.

Brad Gillespie - Property Partner

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