10.12.2022 Suburb Spotlight

The Four Best Eastern Suburbs For Property Investors

The Four Best Eastern Suburbs For Property Investors

Sydney’s Eastern Suburbs have traditionally rewarded property investors with solid returns and strong capital growth.

We reveal which four suburbs we think look best for property investors now and over 2023.

If you’re a property investor, a slower property market like the current one can be a great time to buy.

Right now, competition is fierce in the rental market, which means vacancy rates are low and rents are high. But there is a lot less competition in the sales market. That means less risk of overpaying, and a greater chance of finding the right property for your portfolio over the long term. No wonder Warren Buffet once implored us to be “fearful when others are greedy, and greedy when others are fearful”.

With that in mind, we reveal our top four picks for where to invest if you’re looking to buy an investment property in Sydney’s Eastern Suburbs.

Pick 1. Potts Point: Invest in value

Few suburbs in Sydney can match Potts Point for convenience. It has some of Sydney’s best public transport links, great cafes, bars and restaurants, and it’s just a 15-minute walk from the CBD Centre. It also happens to be incredibly popular with downsizers and young professionals, many of whom are tenants.

As much as 64.1% of all dwellings in the suburb are rented, according to the 2021 Census Data, with more than half living in single households.

The good news for investors considering Potts Point is that one-bedroom apartments are now relatively affordable, too, with the median value falling -14.7% over the past year, according to realestate.com.au

One-bedroom apartment in Potts Point
Median price: $682,500
Median rental yield: 3.4%
Why we like them: Great value, strong demand and likely to experience good capital growth when the market turns.

Pick 2. Maroubra: capitalise on two trends

The move to the beaches has been one of the biggest trends in Sydney real estate over the past decade. Meanwhile, the quest for more space is a trend that dominated the hot pandemic market in 2020 and 2021. What better way to capitalise on this trend than by investing in a house near the beach?

With suburbs such as Bronte (median house price $6.575 million) and Bondi (median house price $3.96 million) well out of the reach of many investors, it may pay to look a little further afield at suburbs with more potential.

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Maroubra’s median house price stands at $2.795 million (up from just over $1.8 million three years ago) but two-bedroom homes – or townhouses – sell for much less.

Two-bedroom house in Maroubra
Median price: $1.935 million
Median yield: 1.8%
Why we like them: Buying a home with development potential could lead to exceptional capital gains, especially as more people look to carve out their ideal beachside lifestyle.

3. Centennial Park: the undiscovered gem

When most people think of Centennial Park, they think of it’s old-world charm and grand federation homes on leafy streets. But the beautiful estates that surround the park itself are only a small part of Centennial Park’s story. More than 80% of the suburb’s residents live in apartments.

What’s more, Centennial Park enjoys all the convenience of its neighbouring suburbs but at a fraction of the price. The median apartment here sells for $855,000 compared to $1.63 million for Woollahra. Maybe that’s because it’s somewhat undiscovered. We don’t think it will stay that way for too much longer.

Two-bedroom apartment in Centennial Park
Median price: $1,107,500
Median yield: 3.1%
Why we like it: Strong demand from tenants and all the convenience of nearby suburbs without the same price tag (at least not yet).

4. Randwick: the safe bet

Conventional property-investing wisdom says to buy in a suburb close to employment and education. And, as home to three major hospitals, one of Sydney’s best (and biggest) universities, several popular schools, and a reasonably large commercial centre, few suburbs can match Randwick on this front. Little wonder then that just over half (50.5%) of homes in the suburb are rented.

In the past few years, new infrastructure – such as the light rail – has made Randwick even more attractive, pushing up property prices and rents. Many parts of Randwick are within walking distance of Centennial Park or Clovelly and Coogee beaches, meaning that they’ll also appeal to people who want to be near the park or ocean. And, with a range of properties available from terraced homes to studios, and from art deco gems to modern apartments, there’s a property type for every type of investor (and tenant).

Two-bedroom apartment in Randwick
Median price: $1,125,000
Median yield: 3.0%
Why we like it: A perennial favourite with tenants, Randwick will always be in demand.

Want more?

If you’d like to find out more about property in Sydney’s eastern suburbs, get in touch with our team today.