The Hills District has seen a major increase in investment activity over the last five years, with new developments built in response to increased demand for smaller households, close to shops and public transport. As each new development settles, approximately one-third of its apartments will be available to rent, meaning there is no shortage of opportunity here for investors.
While the Sydney market is currently going through a lull, the fundamentals that make it a great place to invest are still in place – jobs, public transport, excellent schools and hospitals and, of course, lifestyle. As your local real estate agency, we have adapted to changing market conditions and continue to offer excellent communication and fast application turnaround times to our clients, which keeps our vacancy rates low.
When buying an investment property in the Sydney market, it’s always worth doing your research around the best suburbs to invest, and what kinds of tenants you’re likely to see, both now and into the future. This will help you decide whether or not an area’s potential aligns with your financial goals, which may be short-term gains in the form of rental yields, long-term capital growth or – in a perfect investment world – both.
Best areas for apartments with high rental yield
According to recent data from Smart Property Investment, the best Hills suburbs for apartments with high rental yield in 2018 include Kellyville Ridge, Dural and Kellyville, all sitting at around four per cent.
So what makes these suburbs popular with tenants? Kellyville is sought after as it’s close to Castle Hill, yet far away enough to be relatively quiet. It appeals to professional singles, those who have just left home, and young families with babies. Dural is also close enough to the CBD to commute, yet peaceful and semi-rural, making it a great place to unwind on weekends.
Castle Hill is always going to be popular with tenants due to its easy access to shops and public transport, including the new North West Rail Link. It continues to evolve into a busy urban hub, with new developments such as Atmosphere and Skyview offering a high-end option for both new and experienced investors.
Best areas for investment houses with high rental yields
Houses in much of the Hills District will attract a healthy rental yield. The suburbs of Bella Vista, Kellyville Ridge, Beaumont Hills, Winston Hills, Kellyville, Rouse Hill, Dural and Glenhaven all attract yields of over 2.7%, with Bella Vista the highest at 3.8%.
This is largely due to the appeal of the area to families. Generous houses and block sizes boost rental yields, as does proximity to a wide choice of schools, and workplaces such as the Norwest Business Park.
Family homes close to good schools will also tend to attract long-term tenants, who want to give their children continuity in their education. This understandably increases the area’s appeal to investors.
Best areas to buy or invest in apartments
Recent data shows that apartments in Baulkham Hill and Castle Hill have both shown decent price increases, with Baulkham Hill showing an impressive 9% growth that bucks news reports on the declining Sydney market, and Castle Hill sitting at almost 3%.
Buyers in these Hills District suburbs include downsizers, who want to be close to shops, hospitals and public transport, and investors who are drawn to the area’s growth potential due to improved public transport and other infrastructure.
Where to buy for strong capital growth in the Hills Districts
Medium-density housing is on the rise across the Hills, with suburbs such as Castle Hills – currently 75% houses – set to see more higher-rise buildings, both business and residential. The impact of this rapid growth may take some time to play out and result in short-term price fluctuations, in line with the rest of Sydney.
Having said that, it’s still families with children who want to call the Hills home, thanks to the great schools in the Hills Shire and other family-friendly infrastructure. This suggests that properties that are suitable for families, small or large, and close to public transport and highly rated schools, will always see good demand.
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