As we approach the second half of 2024, and Sydney’s house and unit rents reach new record medians, property investors are well-positioned to capitalise on market conditions to achieve significant rental yields.
With consistently high demand from prospective tenants, there is ample investment opportunity on the Northern Beaches for homeowners looking to put their equity to work and seasoned investors looking to expand their portfolios.
Market Snapshot
Rent Growth
While still comparably high, rent growth on the Northern Beaches has stalled compared to the peaks between 2022 and 2023. This stabilisation of growth is a reflection of a rebalance of supply and demand as more properties become available to rent.
Vacancy Rate
The vacancy rate on the Northern Beaches currently stands at 1.2%, marking a small increase from the record low of 0.8% observed at the end of last year. Economists are largely predicting that a rental market rebalance will be reached later this year. This tipping point will be reached when vacancy rates sit at a more sustainable level between 2 and 3%.
Days On Market
In line with an increase in supply, the average number of days rental properties are currently on the market has increased slightly compared to last quarter. However, our team leases an average of 41% of all rental properties after just one open.
What Does This Mean For Investors?
For investors eyeing the market the time is ripe to make a move. Consecutive interest rate hikes and uncertainty around future decisions have meant that competition, at least for the moment, has eased slightly in the Northern Beaches market. And while rental conditions are facing slowing momentum – record rents since 2020 have boosted rental yields to their highest point in 10 years.
Top Three Northern Beaches Suburbs To Invest In
Looking for the latest investment hotspot? With strong rental returns and a diverse range of property options available, here are our top three suburbs for investors:
Warriewood
Last month in Warriewood, 14 properties were available for rent and 38 for sale. Based on data from 2023, median property prices in the suburb range from $2,250,000 for houses to $1,540,000 for units.
A brilliant suburb for potential investors, the median rent for a house in Warriewood is $1,295 per week and the annual rental yield is a very healthy 3.0%. The median unit rent is $850 per week, delivering an even stronger rental yield of 3.6%. The suburb has experienced a steady annual compound growth rate of 6.0% for houses and an impressive 24.2% for units.
Manly
In the same month in Manly, 180 properties were available for rent and 93 properties for sale. Throughout 2023, the median house price was considerably higher than Warriewood, sitting at $4,500,000 and the median unit price was $1,715,000.
The median rent for a house in Manly is $1,800 per week and the annual rental yield is 2.2% whereas the median rent for a unit is $900 per week with a slightly higher rental yield of 3.0%. A highly sought-after suburb, there is consistently high rental demand for rental properties, this competition will likely continue to put upward pressure on rental prices.
Dee Why
In Dee Why 112 properties were available for rent and 106 properties for sale in March. While the median house price was slightly higher than Warriewood in 2023, coming in at $2,575,000, the median unit price was slightly lower at $895,000.
If you’re looking to invest in property, with reasonable purchase prices and rents steadily following an upward trend, Dee Why absolutely should not be overlooked. Houses in this seaside suburb rent out for $1,100 per week, yielding an annual return of 2.5%. Meanwhile, the average rent for a unit is $675 per week, with an even stronger yield of 4.0%. These impressive yields reflect the growing popularity and strong microeconomic growth in the suburb over the last five years.
Upcoming Investment Opportunities
It’s clear renters are willing to pay a premium price to live near the beach, however, as cost of living pressures compound, tenants are becoming more selective in their choices.
As more stock enters the market, new properties will prove more desirable than existing properties, making now the perfect window of time to invest in a new development. A smart investment choice, tenants are often willing to pay a premium for new apartments. Furthermore, new builds mean lower maintenance costs for landlords.
We currently have four premium developments available in Warriewood and Dee Why:
And one development project is due to be unveiled later this year.
Chat With Our Team
To get an up-to-date valuation on your property or to elevate your investments, contact Senior Business Development Manager and Upstate Partner, John Hall. He’ll show you the possibilities that are earning investors excellent results.
John Hall
The Upstate Team
