There are two strong trends beginning to emerge, they are;

1. The return of investors with a bias toward new or renovated property for depreciation/tax purposes

2. The rise of owner occupiers looking at apartments due to affordability

The price gap between houses and apartments is at an all time record of 54.2% according to CoreLogic who noted that Pre-Covid the difference was roughly half of what it is today. The impact this is having on affordability means that many buyers are looking at apartment alternatives which is seeing demand increase for larger apartments that match lifestyle requirements of purchasers. We believe this will cause a run on apartment values which until now had only seen moderate increases in value in comparison to detached dwellings. 

Rents remain steady and depending on the region there is higher demand than availability. The lockdowns this time around have caused lower stock levels in comparison to those of 2020 which caused an oversupply of studio, 1 and 2 bedroom apartments which deflated pricing. 

Overall we are seeing robust fundamentals in the market (despite lockdowns) that are expected to continue at least until the new year. 

SUBURB SNAPSHOTS

CBD & Eastern Suburbs

Sydney (2000)

•Vacancy rate 6.7%

•Implied gross yield for houses 2.9%

•Implied gross yield for units 3.4%

Bondi Junction (2022)

•Vacancy rate 4.4%

•Implied gross yield for houses 3.7%

•Implied gross yield for units 2.8%

Zetland (2017)

•Vacancy rate 2.9%

•Implied gross yield for houses 3.0%

•Implied gross yield for units 3.4%

Inner West & West

Glebe (2037)

•Vacancy rate 3.8%

•Implied gross yield for houses 2.1%

•Implied gross yield for units 4.0%

Homebush (2140)

•Vacancy rate 5.4%

•Implied gross yield for houses 4.3%

•Implied gross yield for units 3.7%

Parramatta (2150)

•Vacancy rate 4.7%

•Implied gross yield for houses 3.2%

•Implied gross yield for units 3.7%

North West

Kellyville (2155)

•Vacancy rate 3.9%

•Implied gross yield for houses 3.0%

•Implied gross yield for units 3.8%

Carlingford (2118)

•Vacancy rate 4.3%

•Implied gross yield for houses 3.6%

•Implied gross yield for units 3.3%

North Shore

Turramurra (2074)

•Vacancy rate 3.2%

•Implied gross yield for houses 2.1%

•Implied gross yield for units 4.6%

Lindfield (2070)

•Vacancy rate 3.8%

•Implied gross yield for houses 2.4%

•Implied gross yield for units 5.2%

Crows Nest (2065)

•Vacancy rate 3.8%

•Implied gross yield for houses 4.3%

•Implied gross yield for units 3.6%

Northern Beaches

Manly (2095)

•Vacancy rate 2.6%

•Implied gross yield for houses 3.3%

•Implied gross yield for units 2.7%

Dee Why (2099)

•Vacancy rate 0.9%

•Implied gross yield for houses 2.2%

•Implied gross yield for units 4.3%