Property investors can achieve an average 233% return on investment property in Sydney if they buy in 1993 and hold the property to 2010.
Sydney’s median house price rose 233 per cent between the June quarter of 1993 and the June quarter of 2010, from $188,050 to $626,444, according to the latest housing price figures from the Australian Property Monitors.
Houses in the inner western suburbs saw the biggest percentage price rise of the nine Sydney regions, up 318 per cent from $208,000 to $870,000. The smallest increase was in Canterbury-Bankstown, where the median house price still rose 201 per cent from $166,000 to $500,000.
The housing prices suggest that the regions that are closer to a certain lifestyle (the city or the beach) experienced higher return on investment and that’s where all the demand has been and still is. Ultimately the level of demand decides the house prices so you should know where to buy if you want to invest in properties.
There is one important factor that cannot be ignored – the interest rate. If you want to buy a home or investment property today, you should be budgeting to pay interest rates of about 9 per cent or higher.