Wollongong Property Market Update August 2020
Herron Todd White, Property and Finance Reporter
First published 14 August 2020, 09:53 PM
The residential market continues to flow through the last month. Buyers appear to be well prepared to make an initial offer if they like the property, as selling periods are currently short they’re not prepared to risk waiting.
Recent sale highlights include a modern fourbedroom house on the Grove in Austinmer for $2.925 million, a two-story dwelling in Bellambi for $1.2 million and the reported sale of The California Manor on Reddall Parade, Lake Illawarra (price undisclosed).
Turning to the property investor’s playbook. Property investors appear to be active in the residential market at the moment, with record low interest rates being the main driver. The majority of investors are local ‘Mum and Dad’ type operators, looking to pick up a first or second investment property. This may be a house in a suburb that they’re familiar with, or a new unit or townhouse in a modern development.
Larger scale investors are also active and will target multi-occupancy properties to secure cash flow. Competition for unit blocks is often between local and Sydney buyers. A block of five x twobedroom units on McKenzie Avenue sold recently for $1.45 million which analysed to a gross return of 4.98 per cent.
Earlier in 2020 a block of four x two-bedroom strata titled units sold in one line for $1.1 million on O’Connell Street Barrack Heights which analysed to a gross return of 5.44 per cent. While rental increases have been moderate in recent years, the low interest rates mean that yields have remained stable.
West Dapto appears to be a strong rental area at the moment with a modern four-bedroom house renting for around the $580 to $600 per week mark. This same house would be worth approximately $675,000 which shows a potential gross yield of approximately 4.6 per cent. In comparison, a $675,000 two-bedroom unit in Wollongong could potentially rent for $525 to $550 per week. The benefits of purchasing a new investment property includes being able to tax deduct the depreciation with Herron Todd White being able to prepare a comprehensive tax depreciation schedule on your property.
Speak with a Wollongong Mortgage Broker today.
