Berrima NSW Property Investment

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## 2. Market Overview - Median house price: $2,275,000 - Median unit price: $708,151 - 1‑year price change: –2.1% (price fell over the last 12 months) - 5‑year CAGR: 13.2% per year (strong long‑term growth) - 3‑year forecast: 11.6% growth (projected upside) - Days on market: *data not supplied*

What it signals - The recent –2.1% dip gives buyers a modest entry discount, but the 5‑year CAGR of 13.2% and 3‑year forecast of 11.6% indicate that the market is still on an upward trajectory. - Sellers face a slightly softer short‑term environment, while long‑term investors can still expect capital appreciation if the forecast materialises.

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## 3. Rental Market - Median weekly rent: $837 / wk - Gross rental yield: 1.9% - Vacancy rate: *data not supplied* - Demand rating: *data not supplied*

Implication for investors - A 1.9% gross yield is low for a capital‑intensive suburb; cash‑flow‑focused investors will need to negotiate a purchase price well below the median or look for higher‑yielding units. - Without vacancy data we cannot quantify tenant risk, but the low yield suggests limited rental income relative to price.

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## 4. Short‑Term Rental Opportunity - STR nightly rate: *data not supplied* - STR occupancy: *data not supplied* - Estimated annual STR revenue: *data not supplied*

Conclusion - Because no short‑term rental metrics are provided, we cannot quantify STR profitability. - Given the low long‑term yield (1.9%), investors should only consider STR if they can secure a strong nightly rate and high occupancy; otherwise, a long‑term rental (LTR) remains the default approach.

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## 5. Infrastructure & Growth Drivers - Known projects / transport / employment base: *data not supplied*

Interpretation - In the absence of specific infrastructure or employment information, we cannot identify concrete demand catalysts or constraints. The suburb’s historic 5‑year CAGR suggests that underlying demand has been robust, but future drivers remain unclear.

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## 6. Bull Case Assume the 3‑year growth forecast of 11.6% materialises:

• Projected median house price in three years:

• Potential capital gain: ≈ $265,000 (≈11.6% upside)

If rental yields improve to at least 2.5% through price negotiation or rent growth, the total return could become more attractive for income‑oriented investors.

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## 7. Risks | Risk | Quantified aspect | Impact | |------|-------------------|--------| | Short‑term price dip | –2.1% over the past 12 months | May erode cash‑flow if purchase price is near the median. | | Low rental yield | 1.9% gross yield | Limits cash‑flow; investors need price discounts or higher rents to reach a 2.5%+ target. | | Vacancy uncertainty | Vacancy rate not provided | Unknown tenant risk; a high vacancy could further depress returns. | | Supply pipeline unknown | No data on new dwellings | Unexpected new supply could increase competition and push rents down. | | Interest‑rate sensitivity | Not quantified in data | Higher rates could reduce buyer capacity, pressuring prices further. |

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## 8. The Play - Entry price range: $2.1 M – $2.4 M (roughly 5–10% below the $2,275,000 median, giving room for negotiation). - Minimum yield target: ≥ 2.5% gross (requires either a lower purchase price or rent uplift). - Watch signals: 1. Release of local vacancy statistics. 2. Announcement of any infrastructure or employment projects. 3. Movements in the Reserve Bank’s cash‑rate that could affect borrowing costs. - Recommended strategy: - Adopt a long‑term hold while monitoring the above signals. - Prioritise properties priced at the lower end of the entry range to achieve the 2.5%+ yield threshold. - Re‑evaluate after 12 months; if the –2.1% price dip deepens or vacancy data shows high emptiness, consider exiting or reducing exposure.

*All analysis is based solely on the supplied data.*