Many buyers have been lying low for some time, and waiting for the market to pick up before making their next move. Others are thinking it’s a good time to buy, and recent data shows they might just be right. Unfortunately there is no crystal ball when it comes to real estate. However, the prospect of a catastrophic housing market crash in Sydney now appears unlikely.

HSBC economist Paul Bloxham recently stated that the Australian housing market downturn is likely to come to an end by the second half of this year. Recent data, also quoted in the article, shows that auction clearance rates are picking up. We’re also seeing a rise in loan approvals, particularly for first-time buyers.

Inner-city Sydney property will always have intrinsic value to both buyers and tenants. This is thanks to its unique location in the heart of an international city. As the inner-city specialists, we understand that buying here is an exciting prospect for investors. With this in mind, we have put together a few tips about how to invest in the current market.

Consider an off-the-plan apartment

Restricted lending by banks and legislative changes have meant many investors who put down deposits for off-the-plan apartments have been unable to complete on their purchases. Prices are now lower than they were in the original offerings. This means that now is a good time to purchase an off-the-plan or newly completed apartment at a competitive price.

Buy a first home for your kids now

With the market at a low, it’s also a great time to invest for your children’s future. Some investors are taking the opportunity to buy a property to rent out now, with the expectation that their children may use it in the future as their first home.

Invest in a fixer-upper

Buying a fixer-upper is another strategy that can work well in a subdued market. It’s a little riskier, though, as investors can make the mistake of overcapitalising on their investment or having a blow-out on costs.

When buying to renovate, ensure any problems are cosmetic, and choose a property in a good location. If you have the time and funds, buying a tired or dated property and making straightforward updates will increase the value relatively quickly. This includes changes such as fresh carpet and paint work, and updating fixtures such as basins and kitchen benchtop. It’s important, though, to  keep your costs low.

You will also need to consider whether you will be project managing any work yourself or outsourcing. And be sure to factor in your timeline for any renovations, as a vacant property won’t generate income.

As with off-the-plan apartments, research rental returns for similar apartments in the same location, and use this in your calculations.

Always prioritise location

Now is definitely not the time to make daring predictions on remote suburbs that may boom at some time in the future. Always choose location over anything else. Inner Sydney remains a safe choice for investors. This is because it has a diversified economy and a desirable lifestyle, meaning it will always appeal to tenants and buyers alike. It’s also within the enrolment boundaries of top performing schools, and enjoys excellent proximity to a wide range of transport hubs. These factors further strengthen its value as an investment.

Talk to us

As the specialists in inner-city Sydney and the Hyde Park precinct, we are always happy to talk to investors thinking of buying here. Please sign up for our free brochure for more information about investing in Sydney’s historic centre. And pick up the phone if you would like a no-obligation chat about the current market and what we have available for sale now.

Tolga Ozer, Principal & LREA

Hyde Park’s most highly acclaimed property expert, achieving record-breaking outcomes for owners and investors. Having become the most sought-after agency for Sydney’s inner suburbs and CBD, my team and I take pride in our ability to deliver outstanding results.

Get in touch

Find out what your home or investment property is worth in today’s market.