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$250,000 on it and it’s positively geared,” he
says. “Rents for that studio stuff is sought
after. It’s positively geared and you have a
pretty secure asset in your super fund.”
He estimates studios have increased in price
by about 15 per cent over the past 12 months
on the Lower North Shore.
“It’s not huge, but at the same time it’s
not too bad either, compared to other
investments like shares,” he says.
“Some studios sold in Lane Cove off-the-
plan for about $420,000. They would be
worth $450,000 now and the owners haven’t
even been given the keys.”
Even though studios might only be five
or 10 square metres smaller than a one-
bedroom apartment, you would pay around
$150,000 less, Dorron adds.
Australian Property Monitors reports the
Sydney median studio price as $336,000.
This number compares with $483,000 for
a one-bedroom apartment.
While capital growth and rental rises have
lagged behind one-bedroom units, rental
yields are higher. Nevertheless, the lower
entry-prices are a relief for some buyers.
Ray White Elizabeth Bay agent Penny
Timothy says the booming market is creating
She sold a one-bedroom apartment recently
for $961,000 in Potts Point.
“It had lovely views but no lift access. It was
a five-storey walk-up, Art Deco and with a
garage,” she says. “It sold well above reserve.”
Another 55-square-metre one-bedroom
property in Elizabeth Bay in need of a total
renovation just sold for $530,500.
“Investors are definitely strong in this
market. We just can’t get enough stock,” she
says. “ The attraction with studios is that they
have a strong yield, they’re easy to lease,
they’re low maintenance and they usually
have low levies.”
The main problem with a studio is that while
it might be easy to let out, it’s often harder to
sell. That comes down to bank restrictions.
“I don’t think they’re as liquid as a one or
two-bedder,” Harvey says.
“Banks often require 30 per cent (deposit).”
He also believes there hasn’t been an
increase in demand for studios. If people can
get a loan, they’ll opt for a one-bedroom unit
first, he says.
“One-bedroom and bigger tend to be the
most popular sort of investment,” he says.
Timothy agrees. She adds her colleague is
currently selling a studio that’s just 19 square
metres. That’s about as small as it gets, and
harder to find a buyer for.
“ There are more buyers interested in the
one-bedroom apartment market,” she says.
“But we do get a lot of regional and
interstate people who choose to have a
property retained as vacant for when they
visit, as opposed to staying in a hotel.”
She adds couples will often settle for a one-
bedroom apartment, but rule out studios as
“For studios, you’re limited really to a single
person. You don’t get couples,” she says.
“Whereas for one-bedroom apartments,
you have a couple and then you have a
combined income of two people.”
Smith warns some agents and marketers are
trying to fool cashed-up investors.
“ They’re marketing them as one-bedroom
apartments when they’re actually studios,”
he says. “I saw one at North Sydney recently
that said ‘two-bedroom apartment’ (in the
ad) and I said ‘no it’s not, this is a one-
By law, a bedroom has to have a window.
Some agents try to pass off a study area or
Everyone knows the Sydney property market
is booming. Listed properties are snapped
up within days, and most apartments and
houses are selling for well above the reserve
That’s why 33-year-old Natalie Bogg is so
pleased she bought a studio three years ago.
At the time she paid just $270,000 and it’s
now renting for $330 per week. She also
had it revalued a few months ago and it’s
now worth a conservative $340,000.
“A few of my friends are now trying to get
into property,” Natalie says.
“They’re looking at studios themselves,
because they know if they find the right
location, they’ll get a reasonable rent for it.”
Natalie’s property journey started about
four years ago. She went to a property
seminar and heard a speaker tell the crowd
that the earlier you can get into property,
the better. Her parents also love bricks and
mortar and in fact, Natalie’s mother bought
a similar pad in the very same block after
seeing how easy it was to ‘set and forget’
a studio apartment.
Despite the common thinking that there’s
a high turnover with studio tenants, Natalie
has only ever had two. The first tenant was a
professional lady in her 30s, and the current
tenant is also a professional.
They’re usually looking for something
convenient, with easy access to the CBD,
and also affordable and comfortable.
“Definitely one of the main points is its
location,” Natalie says.
“In terms of an investment property, I
wanted to make sure it was central and
close to the city, but slightly different
and not just a square. My studio has a
little alcove to put a bed there, so it’s a bit
different.” However, the studio is tiny, at just
34 square metres.
Natalie says the fact that it has
Woolworths, cafés and restaurants right
outside the door means tenants can
compromise with the small space, knowing
they have convenience and a fantastic
lifestyle just metres away. She also keeps
the rent low to reward
good tenants who look
after her property.
And even though
studios don’t usually
achieve the same
capital growth as
Natalie is “absolutely,
100 per cent” pleased
that she purchased a
studio when she did.
“It’s just sitting there
appreciating in value
every year and I don’t
have to do anything, particularly with
the market skyrocketing.”
Her aim is to purchase a few properties
over the next five years.
Just a few weeks ago, Natalie and her
33-year-old boyfriend Anton Kerr were able
to utilise some of the equity in the studio
and purchase another property on the
Lower North Shore.
This time, Natalie and Anton purchased
a two-bedroom penthouse on Spit Road,
Mosman. They paid $855,000, which
Natalia admits “is a stretch”, but the former
owners of the apartment are still living there
while they find a new place to live.
“It has worked out really well,” Natalie says.
The beauty with a studio is that Natalie
and her boyfriend can purchase a property
“at a stretch”, as they’ve just done, knowing
that the studio more or less pays for itself.
So they only have to worry about paying off
their two-bedroom apartment.
The studio is currently on an interest only
loan and costs Natalie just $40 a month in
out of pocket expenses. So it’s easy to hold
and ‘set and forget’.
“This allows us to concentrate on paying
the Mosman property off,” she says.
“I know there are restrictions with the
banks but if you can somehow drum up
the cash to get the deposit together, then
definitely I would get another studio.”
An affordable entry
Bogg and Anton
THE STATES n New South Wales
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