Home' API Magazine : October 2014 Contents 84 n APIMAGAZINE.COM.AU n OCTOBER 2014
average home would probably set you back
“We had a property go on the market there
with offers over $649,000. We had 30 groups
in two weeks and it sold in the third week for
$650,000,” Ebzery recalls.
“It was a big block but original condition.
Open home numbers are solid.”
However, Ebzery warns sellers who expect
too much money for their property will
find it will sit on the market and go ‘stale’, as
investors and homebuyers are savvy enough
to know what prices should be.
“Buyers have so much access to information
these days, so when it’s priced in the range
of anything from $300,000 to $400,000, it’s
selling like hotcakes,” he says.
“ That’s a really competitive price range.”
So how do you know where you should
buy? Veitch says both the north and south
sides of Katoomba have benefits. Close to
the train line is always good, as this attracts
“ The south side is cooler but it gives you the
views. The north side is flatter (and warmer)
but it doesn’t have those stunning views.”
Narrow Neck Road in particular has good
views to the west, but the trouble is, there’s
just not enough stock, according to Veitch.
Main roads including Cliff Drive and
Katoomba Street have beautiful homes and
larger blocks. But the Great Western Highway
has too much traffic for most buyers and
would be considered a cheaper alternative.
Veitch adds Mount Victoria, further north,
is starting to get more attention too.
“People haven’t considered it because it
hasn’t got the shopping and the tourist shops
but it’s an area people are looking at now.”
Investors who search for a mountain
retreat might discover much more than
capital growth. Rental returns in the Blue
Mountains are also strong at the moment. In
fact, they’re something of which explorers
Blaxland, Lawson and Wentworth would be
proud (these mountaineers crossed the Blue
Mountains in 1813 and now have suburbs
named after them.)
Property owners can expect a rental return
of about 5.5 per cent for their humble house.
Rental return for units would be even more
and the entry-level price for a unit is only
Ebzery says he recently sold a property for
$320,000 and it’s now on his company’s rental
books for $380 per week.
That’s not too shabby in the buoyant Sydney
market where negatively gearing seems like
the only option for many.
“As far as return goes you’re getting pretty
good return on your money up here,” Ebzery
says. “ That’s becoming harder to find because
there’s a lot of Sydney influence at the
moment. That return’s going to start to slowly
get a bit tighter but if you’re savvy and smart
about what you’re looking for, there are still
great investment opportunities.”
Veitch says winter always attracts a lot of
tourists and the holiday rentals are fully
booked during this time. Fully-furnished
holiday rentals can also be great for positive
cash flow, but you have to make sure you
have a good website and also a good cleaner
you can rely on, if you choose this type
“ They usually operate from Sydney and
it works but it’s all about your website and
getting bookings,” Veitch says.
“ There’s definitely more return (for fully-
furnished, short-term accommodation) but
you have to work it as a job.” Long-term
rentals might be easier and have less hassles.
“Rents are definitely on the increase. It’s
catch-up time,” Veitch says.
Ebzery believes long-term renters don’t
like to move in winter, so spring is usually
the best time to list a property for rent. And
the main factor tenants look for is heating
as well as proximity to a train station. It’s
usually better to get natural gas heating or a
small potbelly fire, instead of a property with
an open fire. The main reason is because it’s
safer and also easier for tenants.
“It’s not a good thing to have a tenant with
an open fire, you don’t want that risk,” Ebzery
warns. “Tenants aren’t too fussy as long as
heating and the location are both good.”
To m * is just 27 years old but already owns
five properties. Four of those have been
purchased in the past 12 months, thanks
to years of saving for deposits to buy
properties in the western Sydney suburb of
Blacktown and also three suburbs in the Blue
Mountains – Katoomba, Wentworth Falls
Many investors are now looking further
afield, priced out of the western Sydney
suburbs, Tom says.
“Blacktown has actually gone up a lot and
it’s quite expensive now,” he says.
“This time last year I bought an average
three-bedroom home there for $380,000.
Now it would be worth $430,000.
Affordability in Sydney has gone through the
roof and you can’t buy a house for less than
$300,000 in Sydney now.”
That’s why Tom decided to take a drive up
to the mountains in search of capital growth
and strong rental returns.
He first came across the hub of Katoomba
and paid $290,000 for a two-bedroom
property there. It needed work, but a quick
renovation later and Tom was soon renting it
out for $350 per week.
Tom then purchased a three-bedroom
home late last year, forking out $283,000.
Once the house settled in January, he rented
it out for $380 per week.
More recently, he went shopping in
Hazelbrook and paid $288,000 for a
two-bedroom property with a home office
downstairs. He’s currently giving this
property some minor renovations and
suspects it will rent for about $360 per
week once the renovations are completed.
“They’ve upgraded the Great Western
Highway so the area is a lot more accessible
now,” Tom explains.
“People in the Blue
Mountains don’t want
to live anywhere else.”
In fact, Tom has
friends who happily
commute up to two
hours each way
to work in Sydney
and live in the mountains. They prefer
the country atmosphere, friendliness of
the people and the beauty the mountains
provide. He’s also noticed more shops
opening and more tourists visiting over the
past 12 months.
“The local economy is now picking up,
there are new shops being put in at Lawson
and a new Woolworths and Big W was
recently completed at Katoomba,” Tom says.
“There’s also land being released in
Blackheath and Hazelbrook. They’re looking
at increasing the population and as they do,
and property becomes more expensive in
Sydney, over time more people will live in the
Tom also believes there’s a big price gap
between expensive blue-chip Leura and
the cheaper residential area of Katoomba.
He says that gap will close as more buyers
compete to enter the market.
“Council doesn’t allow subdivisions unless
you have at least half an acre, so the block
sizes here are often 800 square metres and
there aren’t many units either.”
On the other hand, he believes some
sections of the Blue Mountains, including
further north in Lithgow, are just that little
bit too remote and might not experience the
same capital growth.
Tom’s real name has been withheld for
privacy reasons by request.
Chilly temperatures, hot market
Name:To m *
THE STATES n New South Wales
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