IT’S A BIRD, IT’S A PLANE……….NO! IT’S……SYDNEY PROPERTY.

Faster than a speeding bullet, more powerful than a locomotive….yes! it’s Sydney property which is now surging at lightning speed.

With a stunning 71% clearance rate on the Northern Beaches alone last week-end, low to middle level property around town is certainly flying.

Add interest rate cuts to the mix & you don’t need to be a superhero to determine that it’s a great market to be buying & selling in.

Ahhhh yes, the RBA’s decision to cut the official cash rate to 2.75% p.a. not only represents a historical low but also a significant opportunity for anyone that might want to buy an investment property.

Seven of the eight Australian capital cities now have a median annual rental yield that is higher than most new variable mortgage interest rates.

Take Sydney as a conservative example. As you can see on the Residex table below, the annual rent on a $490,000 unit is 5.30%, or $25,740. The annual interest expense on an investment loan of $465,500 (with a 5% deposit) is $24,206 (@5.20% p.a.).

Rental yields are historically high and interest rates are historically low. This just means that if you invest (and borrow) wisely you should be able to own property with little impact on your cash flow.

One could also argue that buyer competition for a typical investment property has reduced significantly in recent times with many State Governments removing the first home buyer incentives. In NSW & QLD for example, first home buyer mortgage market share has dropped from approximately 18% to around 6%.

Additionally, with many people now opting to use their superannuation savings to by property rather than shares, the prospect of owning an investment property is far more achievable than many people believe.

UP, UP & AWAY FOLKS….IT’S A GREAT MARKET TO BE BUYING & SELLING IN…..