PRD Kingsgrove Market Update 1st Half of 2020
In Q1 2020, Kingsgrove recorded a median house price of $1,270,000, and a median unit price of $547,500. This represents annual (Q1 2019 – Q1 2020) median price growth of 27.0% for houses and 4.3% growth for units. During Q1 2019 – Q1 2020 house sales slowed by -14.3% to 66 sales, while unit sales increased by 26.9% to 33 sales. Despite lower volumes, house capital growth has gone from strength to strength; and there is real capital growth in the unit market. Now is a good time to own property in Kingsgrove.
Average vendor discounts between Q1 2019 and Q1 2020 have tightened for both property types, to a premium of 5.4% for houses and to just -0.2% for units. Market conditions in Kingsgrove have strongly shifted to more favour sellers, where buyers are willing to offer above the initial listing price. Now is a great time to sell.
Over the past 12 months, house rental yields in Kingsgrove increased slightly to 3.0% in December 2019. Kingsgrove house rental yield is slightly above that Sydney Metro average (2.7%), thus despite a slight softening in demand for rental properties in the area (down by -17.2% in the 12 months to Q1 2020), there are still healthy returns for investors.
2 and 4+ bedroom houses provided investors with stable rental returns annually, which builds further confidence.
Kingsgrove recorded a vacancy rate of 4.0% in December 2019, which is slightly above Sydney Metro’s 3.6% average. This is not a surprise, considering the increase in both house and unit sales over the past 12 months. Thus, investors may wish to consider signing tenants for longer leases to ensure cashflow security.