Sydney Waterloo apartments offer “attractive” sub-$500,000 investment opportunities: HTW

Investors looking for a solid return on a $500,000 property play close to the Sydney CBD should consider a one-bedroom or studio apartment in Waterloo, about 4 kilometres south of the city centre.

Valuers Herron Todd White notes that Waterloo has “undergone dramatic redevelopment in the past 10 years and offers a good buyer option”.

“The area now comprises predominantly high density residential unit complexes.

“For $500,000 you could buy a semi-modern one-bedroom unit with single car space.

“A unit of this nature would rent for approximately $550 per week making it attractive for investment purposes,” says the valuation firm in its July market report, which examines where to spend a “lazy half a million” in the new financial year.

Using these figures, investors could get a gross rental yield of around 5.7% well above the average for Sydney of 4.9% for units, according to June figures from RP Data-Rismark.

A search on realestate.com.au reveals nine apartments in Waterloo priced at or below $500,000.

They are all one-bedroom and studio apartments, the cheapest being a second floor apartment with car space on Wellington Street listed for $425,000 with a “motivated vendor” through Alex Lang of Ray White Pyrmont.

According to RP Data, median unit prices in Waterloo have risen 11.6% over the past 12 months with an average discount of 4.5% and an average time on market of 89 days.

“Proximity to the CBD and eastern suburbs, established infrastructure and the modern standard of accommodation contribute to its appeal for both owners and tenants alike,” says Herron Todd White

“In addition to the high rental returns, these units have also seen good capital growth as surrounding areas are also redeveloped.

“Developers in Waterloo and Zetland (adjoining suburb) communicate with our valuers that demand is still very high for new stock so we predict capital growth will continue into the future.

“At the $500,000 price point we see a mix of both investors and owner-occupiers in areas such as Waterloo.”

HTW says investor interest levels in Waterloo are high while it also represents an “entry level price point for first time home buyers”.

“Because of the limited opportunities at this price in metropolitan Sydney first time home buyers play a major role in increasing demand levels.

“This entry price point adds to the demand from owner occupiers and investors alike, helping drive capital growth.”