|Last Updated: Oct. 01, 2012|
|SYDNEY - Apartments||COST (US$)||YIELD (p.a.)||PRICE/SQ.M. (US$)|
|TO BUY||MONTHLY RENT||TO BUY||MONTHLY RENT|
|60 sq. m.||486,720||2,537||6.26%||8,112||42.29|
|100 sq. m.||871,700||3,592||4.94%||8,717||35.92|
|150 sq. m.||1,894,500||6,203||3.93%||12,630||41.35|
Sydney: CBD, Paddington, Darling Point, Double Bay, Kirribilli, Rose Bay, Tamarama, Bellevue Hill, Point Piper, Potts Point, and Vaucluse
Source: Global Property Guide Definitions: Data FAQ See also: Update Schedule
Apartments in the prime areas of Sydney, the largest city in Australia, cost around USD 8,000 to USD 12,600 per square metre (sq. m.). Bigger apartments tend to cost more, for example, a 150 sq. m. apartment costs on average USD 12,600 per sq. m., whereas a 100 sq. m. apartment costs USD 8,700 per sq. m.
Rents range from USD 36 to USD 42 per sq. m. per month. A 150 sq. m. apartment can be rented for around USD 6,200 per month, while a 100 sq. m. apartment costs around USD 3,600 per month. The gross rental yield for apartments, i.e., the gross return on investment in an apartment if fully rented out, ranges widely, from 3.93% to 6.26%.
Small apartments earn significantly higher rental returns than big apartments. For example, a 60 sq. m. apartment earns rental returns of 6.26%, while 100 sq. m. and 150 sq. m. apartments earn poor rental returns at 4.94% and 3.93%, respectively.
#1 ALEX ARMADA | November 30, 2013
These figures are unrealistic because:
- Inner city apartment average price is about $500,000 . Add 10% buying-selling fees and taxes for your actual cost.
- Such property rents for $1,800-2,200 per month. Assume 50 week rent annually. Most units are rented by singles and students 2-3 people sharing one bedroom and moving around almost every year or two. Allocate some funds for renovation every 3-4 years unless you're lucky to have a single professional long term tenant.
- Annual strata management, insurance, council and water rates will be about $7,000-9,000.
- 6-7% real estate agency fees deducted from your rent
- Plus maintenance... Simplest repair, handyman will charge you $150 for changing the light bulb in Sydney
So, you are looking at a poor 2.5-3% return. Your only chances is capital gain. With average house prices about 9-10 times the average income, all time low only 5% first home buyer rate, interest rates at 30 year low (slowing economy?), AUD at 30 year high, the market is stretched like a balloon full of water. The government is also removing first home buyer incentives in 2014. Your chances are not so great in this saturated market. Take the risk, and cross your fingers.
Login or Register to submit a comment!
In order to promote open and spam-free conversations, Global Property Guide moderates commetns on all articles. You can expect that your comment will be published within 24 hours.
Fortnightly updates from the global property arena directly to your inbox.
Connect to professional advice in Australia
Which parts of the world are most attractive for property investment today?