Sydney investors haven’t had a good time over the past two years. But things are changing. There are more opportunities now than we’ve seen in a long time.

Australia’s property market downturn has hit its biggest cities hard. If you’ve been following the news, you know that Sydney has experienced the most severe decline. In 2018 alone, median prices dropped by 9.9%, causing houses to lose almost $120,000 in value.

Wealth for Life Sydney Doom and Gloom
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Needless to say, this has terrified investors. Many Sydney property investors have lost quite a bit of money. And those who haven’t are steering clear of Sydney and looking at other markets.

Many people have lost all faith in Sydney, thinking that it’s a black hole for their money. Worse yet, they seem to think it reflects the Australian market as a whole. As a result, many investors have gotten severely discouraged.

However, this doesn’t seem to be the case anymore. In recent times, there have been many changes that have reignited market activity. Investors have come up with all sorts of ideas to keep making money in Sydney. And with the right strategy, you can as well.

Let’s look at some of the reasons this is true.

1. The Market Is Showing Signs of Recovery

Let’s tackle the most pressing issue first. Many people fear the downturn is still going on. However, there are many signs pointing to a recovery.

Wealth for Life Sydney recovery
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While it’s too early to say for sure, it’s just a matter of time before we can confirm this. 

For the first time in two years, Sydney has seen price growth. In June 2019, the median home price edged up 0.1%. 

Obviously, this is nothing to be crazy about. There are many other markets with much higher growth rates right now. But it definitely shows that Sydney is moving in the right direction. Ever since it peaked in July 2017, Sydney’s market has been falling rapidly. Two years later, we’re finally seeing proof that the downturn might be over. This isn’t something to ignore.

Shane Oliver, AMP Capital’s chief economist, explains:

‘I think what’s happened here is that we’ve still got some negatives out there. But the combination of the election result, which removed the threat to the capital gains tax discount and negative gearing, along with RBA rate cuts and some relaxation in lending standards by APRA, have resulted in a bit of a bounce in the markets.’

He added that he doesn’t expect a dramatic price lift-off, but he’s optimistic about the future.

2. You Can Buy Low and Make Profit Later 

Long before there was talk of a downturn, Sydney was the most inaccessible market for investors. With the median home price going well beyond a million, most people could only dream about investing there.

However, this may not be the case anymore. It seems like the downturn has been a blessing in disguise for those who want to get into Sydney. While prices are still high, there hasn’t been a better time to invest in a while.

According to the latest available data, the median unit price sits at $1,062,619. This is still a fortune, but investors can save a few hundred thousand dollars compared to a few years back.

Pair this with the all-time low cash rate of 1% and you can see why now may be the right time to invest. You can save a small fortune while still getting into Australia’s biggest market. 

That brings us to the next point.

3. It’s Still Australia’s Most Popular City

Despite the downturn, Sydney is still the most prosperous city in Australia. With nearly 4.7 million people, it goes without saying that many Australians wouldn’t consider leaving it. It’s not the most affordable city in Australia, but there are enough people who can comfortably live there.

Wealth for Life prosperous Sydney
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So, what does this mean to you as an investor?

It supports the most important metric in property investment – demand. If there’s no demand for property, all your efforts will be in vain. Luckily, this isn’t the case in Sydney. There are many people who are willing to buy and rent.

4. There’s Less Competition

High demand gets better for investors when supply is also low. And because of all the horror stories we’ve been hearing, the supply in Sydney has slowed right down. Investors are still afraid to invest, meaning there’s much less competition than before.

This leaves you with more breathing room to choose the right property without having to compete with others. You can take your time and find the best deal.

Of course, this has also driven prices down, so there are many hot deals out there. 

After you land the right deal, finding tenants or buyers shouldn’t be a problem. With fewer options than before, it should be much easier to grab the attention of prospective buyers and tenants.

5. You Can Negotiate a Lower Price

The median home price in Sydney isn’t the only favourable thing for investors. Prices are already low, and you might be able to negotiate an even better deal.

This ties back to the lack of competition bidding up the prices of hot properties. With fewer investors who can offer more than you, you might be able to pull the price down further.

This is what we refer to as a buyer’s market. It’s the time in the market cycle when buyers have more power than sellers. If you negotiate you can get your hands on an amazing deal.

Of course, this doesn’t mean it’s easy. You still have to research and find the best deal. But since investors aren’t rushing to Sydney, you have enough time to get it done.

6. There Are Still Suburbs that Offer Plenty of Growth

A big mistake that people make is generalising everything they hear about the Sydney market. While it has dropped a lot as a whole, there are many suburbs that offer great opportunities. This is especially true now that we’re seeing the end of the downturn.

Wealth for Life Sydney property research
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Buyer’s agent Meredith O’Reilly says that inner city suburbs are great for investors looking for growth. These include Erskineville, Stanmore, and Petersham. In addition, O’Reilly states that Bardwell Park is likely to become an investment hotspot soon. She’s so optimistic about it that she even bought a house there.

Of course, you still have to choose your suburb carefully, based on various factors.

‘You’ve really got to do your research. You’ve got to be across what’s hot, what’s not, what the local infrastructures are and what’s coming on. Get in touch with your local councils, then look at the recent sales and all the indicators of growth,’ O’Reilly advises.

Don’t Lose Hope

From what you can see here, it’s clear that Sydney’s property market is nowhere near as tragic as many claim. There’s a lot you can gain if you play your cards right.

Like any investment, it comes down to finding something with high growth potential. Make no mistake, there are suburbs in Sydney that make sense. And with the current low prices, you might want to pull the trigger sooner rather than later.

For further guidance on how to make money in Sydney, feel free to contact us.

Wealth for Life Sydney
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Sydney investors haven’t had a good time over the past two years. But things are changing. There are more opportunities now than we’ve seen in a long time.

Australia’s property market downturn has hit its biggest cities hard. If you’ve been following the news, you know that Sydney has experienced the most severe decline. In 2018 alone, median prices dropped by 9.9%, causing houses to lose almost $120,000 in value.

Wealth for Life Sydney Doom and Gloom
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  • Facebook
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Needless to say, this has terrified investors. Many Sydney property investors have lost quite a bit of money. And those who haven’t are steering clear of Sydney and looking at other markets.

Many people have lost all faith in Sydney, thinking that it’s a black hole for their money. Worse yet, they seem to think it reflects the Australian market as a whole. As a result, many investors have gotten severely discouraged.

However, this doesn’t seem to be the case anymore. In recent times, there have been many changes that have reignited market activity. Investors have come up with all sorts of ideas to keep making money in Sydney. And with the right strategy, you can as well.

Let’s look at some of the reasons this is true.

1. The Market Is Showing Signs of Recovery

Let’s tackle the most pressing issue first. Many people fear the downturn is still going on. However, there are many signs pointing to a recovery.

Wealth for Life Sydney recovery
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  • Facebook
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While it’s too early to say for sure, it’s just a matter of time before we can confirm this. 

For the first time in two years, Sydney has seen price growth. In June 2019, the median home price edged up 0.1%. 

Obviously, this is nothing to be crazy about. There are many other markets with much higher growth rates right now. But it definitely shows that Sydney is moving in the right direction. Ever since it peaked in July 2017, Sydney’s market has been falling rapidly. Two years later, we’re finally seeing proof that the downturn might be over. This isn’t something to ignore.

Shane Oliver, AMP Capital’s chief economist, explains:

‘I think what’s happened here is that we’ve still got some negatives out there. But the combination of the election result, which removed the threat to the capital gains tax discount and negative gearing, along with RBA rate cuts and some relaxation in lending standards by APRA, have resulted in a bit of a bounce in the markets.’

He added that he doesn’t expect a dramatic price lift-off, but he’s optimistic about the future.

2. You Can Buy Low and Make Profit Later 

Long before there was talk of a downturn, Sydney was the most inaccessible market for investors. With the median home price going well beyond a million, most people could only dream about investing there.

However, this may not be the case anymore. It seems like the downturn has been a blessing in disguise for those who want to get into Sydney. While prices are still high, there hasn’t been a better time to invest in a while.

According to the latest available data, the median unit price sits at $1,062,619. This is still a fortune, but investors can save a few hundred thousand dollars compared to a few years back.

Pair this with the all-time low cash rate of 1% and you can see why now may be the right time to invest. You can save a small fortune while still getting into Australia’s biggest market. 

That brings us to the next point.

3. It’s Still Australia’s Most Popular City

Despite the downturn, Sydney is still the most prosperous city in Australia. With nearly 4.7 million people, it goes without saying that many Australians wouldn’t consider leaving it. It’s not the most affordable city in Australia, but there are enough people who can comfortably live there.

Wealth for Life prosperous Sydney
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  • Facebook
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So, what does this mean to you as an investor?

It supports the most important metric in property investment – demand. If there’s no demand for property, all your efforts will be in vain. Luckily, this isn’t the case in Sydney. There are many people who are willing to buy and rent.

4. There’s Less Competition

High demand gets better for investors when supply is also low. And because of all the horror stories we’ve been hearing, the supply in Sydney has slowed right down. Investors are still afraid to invest, meaning there’s much less competition than before.

This leaves you with more breathing room to choose the right property without having to compete with others. You can take your time and find the best deal.

Of course, this has also driven prices down, so there are many hot deals out there. 

After you land the right deal, finding tenants or buyers shouldn’t be a problem. With fewer options than before, it should be much easier to grab the attention of prospective buyers and tenants.

5. You Can Negotiate a Lower Price

The median home price in Sydney isn’t the only favourable thing for investors. Prices are already low, and you might be able to negotiate an even better deal.

This ties back to the lack of competition bidding up the prices of hot properties. With fewer investors who can offer more than you, you might be able to pull the price down further.

This is what we refer to as a buyer’s market. It’s the time in the market cycle when buyers have more power than sellers. If you negotiate you can get your hands on an amazing deal.

Of course, this doesn’t mean it’s easy. You still have to research and find the best deal. But since investors aren’t rushing to Sydney, you have enough time to get it done.

6. There Are Still Suburbs that Offer Plenty of Growth

A big mistake that people make is generalising everything they hear about the Sydney market. While it has dropped a lot as a whole, there are many suburbs that offer great opportunities. This is especially true now that we’re seeing the end of the downturn.

Wealth for Life Sydney property research
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Buyer’s agent Meredith O’Reilly says that inner city suburbs are great for investors looking for growth. These include Erskineville, Stanmore, and Petersham. In addition, O’Reilly states that Bardwell Park is likely to become an investment hotspot soon. She’s so optimistic about it that she even bought a house there.

Of course, you still have to choose your suburb carefully, based on various factors.

‘You’ve really got to do your research. You’ve got to be across what’s hot, what’s not, what the local infrastructures are and what’s coming on. Get in touch with your local councils, then look at the recent sales and all the indicators of growth,’ O’Reilly advises.

Don’t Lose Hope

From what you can see here, it’s clear that Sydney’s property market is nowhere near as tragic as many claim. There’s a lot you can gain if you play your cards right.

Like any investment, it comes down to finding something with high growth potential. Make no mistake, there are suburbs in Sydney that make sense. And with the current low prices, you might want to pull the trigger sooner rather than later.

For further guidance on how to make money in Sydney, feel free to contact us.

Wealth for Life Sydney
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