Savvy investors buying into Sydney's Nepean region

Media release - Thursday, 21 June, 2012

 

90% of St Marys homes snapped up by investors says Raine & Horne

In the wake of the May and June 2012 interest rate cuts, Raine & Horne St Marys is reporting that close to 90% of homes in the Nepean region, in Sydney’s west, are being secured by astute investors.

According to Peter Diamantidis, Sales Consultant at Raine & Horne St Marys, while rate cuts are helping drive up demand for local homes and investment yields, investors are also recognising the region’s affordability and low vacancy rates.

“Around 80% of properties listed with Raine & Horne St Marys are selling for below $300,000, while the vacancy rate for the region is less than 2%,” said Mr Diamantidis.

“In fact, about a third of properties in suburbs such as St Marys, Mount Druitt, Penrith, Werrington and Kingswood are priced below $250,000, which buys a three bedroom house on a 600 sqm block.”

For example, a three bedroom house at 36 Liddle Street, North St Marys is on the market for $220,000 and will attract a rent of $330 a week, according to Mr Diamantidis, who confirms that a St Marys home can sell in two weeks if it is priced appropriately.

Tenant demand is another critical factor contributing to the Nepean region’s low vacancy rates, he notes.

“Currently, we are leasing around 60-70 properties a month with most homes securing new tenants within a week of being made available for lease.”

Mr Diamantidis also reports that significant numbers of investors are from interstate.

“We are working with a lot of buyers’ agents whose clients are interstate investors from Western Australia and Victoria.

“As a consequence, there are investors who are buying up two or three properties, sight unseen, and building granny flats on the land, a strategy which is generating yields close to 10%.”

For example, Mr Diamantidis recently sold 39 Lingayen Ave, Lethbridge Park, a recently renovated three bedroom home for $240,000, which doubles as a home for a tenant who is locked into a weekly rent of $300.

“The investor, from Victoria, added a $70,000 granny flat to the property for a return of $260 a week.

“For a total investment cost of $310,000, the investor receives a 9.39% gross rental yield from the two incomes ($300 and $260 a week), plus depreciation on the newly-built granny flat,” he added.

Angus Raine, CEO of Raine & Horne, said that the story from St Marys is yet another example of how the issue of real estate affordability is a misnomer.

“It is possible to buy a family home in St Marys for around $300,000, and from here commuters can reach Central Station in a reasonable 45 to 50 minutes by train, or Parramatta in only 20 minutes by car,” said Mr Raine.

“While affordability and yields present St Marys investors with a rosy picture, I’d like to see the NSW Government reconsider incentives for first home buyers by revisiting stamp duty concessions on existing homes and the first home buyers grant.

“I can understand the need for incentives to grow the pool of new stock, however cutting stamp duty incentives and the $7,000 first home owners grant will do little to encourage aspiring buyers into the NSW real estate market,” said Mr Raine.

-ENDS-

For further media information contact:

Angus Raine, CEO Raine & Horne on (02) 9258 5422 or 0409 920 697

Peter Diamantidis, Sales Consultant, Raine & Horne St Marys on 02 9623 5666

Andrew Harrington, National Marketing & Communications Co-ordinator on 02 9258 5400

Media release

Thursday, 21st June, 2012

90% of St Marys homes snapped up by investors says Raine & Horne

In the wake of the May and June 2012 interest rate cuts, Raine & Horne St Marys is reporting that close to 90% of homes in the Nepean region, in Sydney’s west, are being secured by astute investors.

According to Peter Diamantidis, Sales Consultant at Raine & Horne St Marys, while rate cuts are helping drive up demand for local homes and investment yields, investors are also recognising the region’s affordability and low vacancy rates.

“Around 80% of properties listed with Raine & Horne St Marys are selling for below $300,000, while the vacancy rate for the region is less than 2%,” said Mr Diamantidis.

“In fact, about a third of properties in suburbs such as St Marys, Mount Druitt, Penrith, Werrington and Kingswood are priced below $250,000, which buys a three bedroom house on a 600 sqm block.”

For example, a three bedroom house at 36 Liddle Street, North St Marys is on the market for $220,000 and will attract a rent of $330 a week, according to Mr Diamantidis, who confirms that a St Marys home can sell in two weeks if it is priced appropriately.

Tenant demand is another critical factor contributing to the Nepean region’s low vacancy rates, he notes.

“Currently, we are leasing around 60-70 properties a month with most homes securing new tenants within a week of being made available for lease.”

Mr Diamantidis also reports that significant numbers of investors are from interstate.

“We are working with a lot of buyers’ agents whose clients are interstate investors from Western Australia and Victoria.

“As a consequence, there are investors who are buying up two or three properties, sight unseen, and building granny flats on the land, a strategy which is generating yields close to 10%.”

For example, Mr Diamantidis recently sold 39 Lingayen Ave, Lethbridge Park, a recently renovated three bedroom home for $240,000, which doubles as a home for a tenant who is locked into a weekly rent of $300.

“The investor, from Victoria, added a $70,000 granny flat to the property for a return of $260 a week.

“For a total investment cost of $310,000, the investor receives a 9.39% gross rental yield from the two incomes ($300 and $260 a week), plus depreciation on the newly-built granny flat,” he added.

Angus Raine, CEO of Raine & Horne, said that the story from St Marys is yet another example of how the issue of real estate affordability is a misnomer.

“It is possible to buy a family home in St Marys for around $300,000, and from here commuters can reach Central Station in a reasonable 45 to 50 minutes by train, or Parramatta in only 20 minutes by car,” said Mr Raine.

“While affordability and yields present St Marys investors with a rosy picture, I’d like to see the NSW Government reconsider incentives for first home buyers by revisiting stamp duty concessions on existing homes and the first home buyers grant.

“I can understand the need for incentives to grow the pool of new stock, however cutting stamp duty incentives and the $7,000 first home owners grant will do little to encourage aspiring buyers into the NSW real estate market,” said Mr Raine.

-ENDS-

For further media information contact:

Angus Raine, CEO Raine & Horne on (02) 9258 5422 or 0409 920 697

Peter Diamantidis, Sales Consultant, Raine & Horne St Marys on 02 9623 5666

Andrew Harrington, National Marketing & Communications Co-ordinator on 02 9258 5400