Elizabeth Bay NSW Property Investment

THE MARKET

Elizabeth Bay recorded 7.7% annual price growth over the past 5 years — a $2,598,377 house bought in 2019 would be worth approximately $1,793,179 today. Properties are sitting on the market for 65 days (buyers have some room to negotiate).

- **Median house:** $2,598,377 | **Units:** $1,357,475 - **Gross yield:** 1.3% | **Net yield:** -0.2% - **Vacancy:** 1.4% (improving) | **Rental demand:** Very High - **5yr price growth:** 7.7%/yr | **3yr forecast:** 8.6%/yr - **Days on market:** 65 (worsening)

STR potential: $195/night at 68% occupancy = ~$48,399/yr gross. That's a **39% premium** over long-term rent — but factor in higher management costs and council rules.

BULL CASE

If Elizabeth Bay maintains 3%+ annual growth and vacancy stays below 1.0%, median prices could reach $2,988,134 within 3 years with yields compressing slightly as capital values rise.

BEAR CASE

A market correction or interest rate shock could see prices in Elizabeth Bay pull back 10-15% from $2,598,377, with vacancy rising to 2.5% and rental yields softening as tenants gain leverage.

WHAT TO DO

Elizabeth Bay presents a compelling investment opportunity. The combination of solid fundamentals and very high rental demand supports entry at current price levels. Proceed with due diligence on specific properties. Target gross yields above 1.3% and prioritise properties with value-add potential. Consider timing entry around the current growth phase of the market cycle.

- Entry range: $2,338,539 – $2,858,215 - Minimum yield to target: 4.5% - Watch signal: vacancy staying below 2% and days on market falling below 35

This analysis is for informational purposes only and does not constitute financial, legal, or investment advice. Seek professional advice before making investment decisions.