Liverpool perfect for residential investors: Savills

Liverpool perfect for residential investors: Savills
Liverpool perfect for residential investors: Savills

The changing landscape of Liverpool is perfect for residential investors, according to Savills’ latest report.

“Despite strong price growth over the past decade, Liverpool remains a relatively affordable location to buy residential property in comparison to the rest of Sydney.

“The average price in the suburb of Liverpool in December 2016 was $777,000 for a house and $412,000 for a unit.

“This is in line with the average across the wider Liverpool/ Fairfield area but offers a substantial discount of 27 percent and 42 percent respectively when compared to the Sydney average.

“Over the past ten years, house and unit prices in Liverpool have increased significantly with values rising by 137 percent and 122 percent respectively, outperforming the Sydney average.

“Over the past year, the rate of annual growth has slowed to 4 percent for units and 7 percent for houses, reflecting a more subdued housing market seen across Sydney,” the report stated.

Investors in Liverpool focus more on income return rather than price growth Savills comments.

“Since the slowdown in capital value growth across Sydney, an increasing number of investors are placing more emphasis on income return rather than relying only on price growth.

“In Liverpool, the median weekly rent is $480 for houses and $390 for units, resulting in average yields of 3.2 percent and 4.9 percent respectively.

“These are higher than the Sydney average, particularly for units where the median yield across the city is 4.1 percent, and as such, Liverpool is attracting an increasing number of investors.

“The supply of units in Liverpool nearly doubled in 2013 compared to the previous four years as a number of large-scale developments came to the market.

“These units have been absorbed and the number of unit sales has fallen to back in line with the long-term average.

“This has had a positive impact on the vacancy rate across the city of Liverpool, which has been falling over the past six months from 2.2 percent in January 2016 to 1.5 percent in January 2017,” the report advised.

The number of new residents coming to Liverpool has outperformed the Sydney average Savills head of research Sophie Chick reports.

“Over the past 10 years, population growth across the City of Liverpool has outperformed the Sydney average, increasing by 26.0 percent compared to 16.6 percent.

“This has significantly added to the demand for real estate in the area, equating to nearly 4,500 new residents per year.

“Families with children make up a higher proportion of the population in Liverpool than across Sydney, accounting for 60.9 percent of residents compared to an average of 47.0 percent.

“This drives strong demand for housing suitable for children with outside space.

“International buyers are an important source of demand for the housing market across Sydney as both owner- occupiers and investors.

“Liverpool is a culturally diverse city and already has a large international community. Just one-third of residents describe their ancestry as Australian or English compared to over half across Greater Sydney.

“There is a range of employment opportunities in Liverpool, meaning one-third of the residents work locally.

“Beyond Liverpool, Sydney CBD is the largest employment location, accounting for 10 percent of Liverpool’s working population, followed by neighbouring Fairfield and Bankstown. Sydney CBD is the next largest employment location followed by neighbouring Fairfield and Bankstown.

“Health care and social assistance is one of Liverpool’s largest employment sectors, reflecting the fact that the city is home to the largest hospital in NSW,” she commented.

Savills say that Liverpool’s population growth is set to continue.

“The city of Liverpool has already experienced higher population growth than many other areas in Sydney and this is set to continue.

“Over the next 20 years, the City’s population is forecast to increase by 55 percent to 331,000 people compared to a 37 percent increase across Greater Sydney.

“This is likely to further contribute to the already high demand for residential property in the area.

“The construction of Badgerys Creek Airport and surrounding infrastructure to support the new airport is expected to have a significant impact on Liverpool.

“The upgraded and newly formed road networks will increase Liverpool’s connectivity between the surrounding suburbs and greater Sydney.

“With a number of major projects and regeneration schemes underway, the desirability of the area for existing and new residents is forecast to continue to grow,” the report stated.

For more information go to Savills' home page.

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