Sydney Property Investment

Home » Sydney Property Investment

Sydney Property Investment 2017

Sydney property investment may be starting to create a bubble which could lead to price falls when interest rates start to rise again. “Sydney has certainly become a bit bubbly,” says Shane Oliver, chief economist with AMP. “While it’s not a full blown bubble yet, it certainly made some people worry that the strong gains are now fizzing out. The fact that rents and income levels haven’t grown to match these strong price gains is making the Sydney market even bubblier.”

Oliver expects property values to grow by another 8% this year after a further interest rate cut, but believes yield will remain low despite a tight rental market.

“The problem for property investors is that the rental yields have been pretty low as a result of rising prices. I think there will be some upwards pressure on rents but I doubt it will keep up with the strong property values. At the moment, net yield for houses is just 1%, and 3% for units.

“The big risk for investors is the degree of vulnerability. When interest rates start coming up again, you could see prices falling by around 10%.”

The other dangers investors are facing include getting caught up with the buying frenzy and allowing their emotions to rule their heads, according to George Raptis, director with Metropole Buyers Agency.

“Investors may forgo their usual due diligence and get caught up in the emotions of the buying process as they lose sight of the big picture. They are willing to pay whatever it takes to make their dream purchase a reality,” says Raptis.

This could result in buying the wrong type of property in the wrong location and worst, buying one that isn’t considered an investment grade property, according to Raptis.

You could also end up being overcommitted financially and will be exposed when interest rates start rising again.

Bright spots

While there are worries about Sydney property investment prices punching higher records that it cannot sustain, the good news is the economy appears to be growing from strength to strength.

“NSW is now the strongest economy in Australia,” says Oliver.

“I don’t see this reversing any time soon. The lower interest rates, the falling Aussie dollar and the slowing resources sector have been the source of strength for the state.”

Deloitte Access Economics agrees in its report that the lower interest rates are boosting NSW’s fortune.

“Interest rates have always been a good indicator of the economic prospects in NSW,” the report says.

“The state is home to the largest consumer market and mortgage market in the country. Low interest rates act to make existing mortgages cheaper, boost consumer spending power and have contributed to the growing wealth of Sydney-siders in a way that is unmatched in the rest of the country.”

Also, because NSW didn’t have the boom in resource-related construction that was evident in some states, it is not as much risk on the downside according to the report. This means that, while business investment is a shrinking share of Australia’s economy, it is currently a rising share of the state.

Sydney property investment overview

Purchasing property for an investment portfolio is different to purchasing a property for a principal place of residence as you are looking at factors of return on investment (ROI) rather than focusing on lifestyle options. Working with an investment planning firm like National Investment can guide you through the range of options available, and secure a property that will help you towards your goals from day one.

Reports show that Sydney is currently facing a shortage in housing and in two years the situation is expected to change considerably. “With much of the pent up demand pressures having largely dissipated by this time, prices in Sydney are forecast to decline by up to four per cent over 2018/19 analysts predict.

Being prepared for changes in the market is an important part of creating an investment property strategy.

For more information on the future of the Sydney property investment market request a FREE information pack  

How do I get started?

Contact us on 1300 545 899 for a free information pack, or to arrange an obligation free consultation.


Please read this disclaimer carefully.
Information on this Internet site should not be regarded as a substitute for professional legal, financial or real estate advice. Because every investors needs and financial situations are different, the ideas on this web site are intended as a guide only. National Investment Planning and its related entities responsible for maintaining this Internet site and its directors, officers and agents believe that all information contained within this Internet web site is correct. However, no warranty is made as to the accuracy or reliability of the information contained herein and National Investment Planning disclaims all liability and responsibility for any direct or indirect loss or damage which may be suffered by any recipient through relying on anything contained in or omitted from the Internet site at


Without limiting the generality of the aforegoing, no person, persons or organisations should invest monies or take other action on reliance of the material contained in this material but instead should satisfy themselves independently (by seeking expert advice or otherwise) of the appropriateness of any such action. National Investment Planning are not licensed financial advisors. The general information we provide is for educational purposes only. Whenever specific financial advice or financial product advice is required National Investment Planning refer you to licensed individuals who hold the appropriate licensing required by ASIC.


© National Investment Planning.
The subject matter on and accessible from the web site is copyright. Apart from fair dealing permitted by the Copyright Act 1968, National Investment Planning grant visitors to the site permission to download and display its copyright material only for private purposes. For reproduction or use of copyright material beyond such uses, permission must be sought directly from National Investment Planning. If given, permission will be subject to the requirement that the copyright owner's name and interest in the material be acknowledged when the material is reproduced or quoted, in whole or in part.


Website links
This site may contain links to other websites operated by entities which do not belong to the National Investment Planning. These links have been provided solely for you to obtain further information about other relevant products and entities in the market. National Investment Planning has no control over the information on these sites or the products or services on them, and therefore makes no representations regarding the accuracy or suitability of the information, services, or products described on them. You are advised to make your own enquiries in relation to third parties described or linked on this site. Inclusion of a link to a third party site should not be construed as that party's endorsement of this site.

By linking to sites operated by third parties, National Investment Planning is not authorising the reproduction of any material on such sites, as such material may be the subject of intellectual property rights.