Hazelbrook NSW Property Investment

## 1. Investment Verdict Hold – the 1‑year price growth of 8.6% signals solid upside while the gross rental yield of 3.8% keeps cash‑flow modest. Together they justify a “wait‑and‑see” stance rather than a rush to buy or sell.

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## 2. Market Overview - Median house price: $884,302 - Median unit price: $770,301 - 1‑yr price growth: 8.6% - 5‑yr CAGR: 7.0% per annum - 3‑yr growth forecast: 13.5%

*Signal:* Strong recent growth (8.6% in the last 12 months) and a healthy 5‑year compound rate (7.0%) indicate that buyers are still competing for limited stock, which favours sellers in the short term. The 13.5% forecast over the next three years suggests that the market is expected to keep appreciating, giving buyers a reason to enter now if they can secure a price near the median.

*Days on market:* Data not provided – without this metric we cannot quantify the speed of transactions or the balance of power between buyers and sellers.

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## 3. Rental Market - Median weekly rent: $650 / wk - Gross rental yield: 3.8%

*Vacancy rate & demand rating:* Data not provided – we cannot comment on vacancy pressure or tenant demand quality.

*Interpretation:* A 3.8% gross yield is modest for a capital‑growth suburb. Investors should expect limited cash‑flow upside and rely more on price appreciation to drive total returns.

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## 4. Short‑Term Rental Opportunity - STR nightly rate, occupancy & annual revenue: Data not provided

*Conclusion:* With no STR metrics available, we cannot quantify the revenue potential of a short‑term rental. Given the modest long‑term yield (3.8%), investors should treat LTR as the default strategy until STR data becomes available.

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## 5. Infrastructure & Growth Drivers - Known projects, transport links, employment base: Data not provided

*Implication:* Without specific information on new infrastructure, transport upgrades, or major employers, we cannot identify concrete demand catalysts or constraints. Prospective buyers should research council plans, rail/road projects, and local job markets before committing.

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## 6. Bull Case Assume the 3‑year growth forecast of 13.5% materialises:

• Projected median house price after 3 years = $884,302 × 1.135 ≈ $1,003,000.
• Capital gain = $1,003,000 – $884,302 ≈ $118,700 (≈13.5% upside).

If rental yields hold at 3.8% and rents stay at $650 / wk, the investor would also enjoy steady cash flow while the asset value climbs toward the $1 million mark.

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## 7. Risks | Risk | Quantified Concern | |------|--------------------| | Vacancy risk | Vacancy rate not supplied; a rise could push the effective yield below the current 3.8%. | | Interest‑rate sensitivity | With a gross yield of only 3.8%, any increase in borrowing costs directly erodes net cash flow. | | Supply pipeline | No data on upcoming housing supply; a surge in new dwellings could dampen price growth and increase vacancy. | | Economic/ employment concentration | No information on major local employers; reliance on a single large employer would heighten downside if that business contracts. |

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## 8. The Play - Entry price range: Target purchases around the median house price of $884,302 (e.g., $850k–$920k) to stay in line with current market levels. - Minimum yield to target: Aim for a gross yield ≥ 3.8% to match the suburb’s average. - Watch signals: 1. Release of days‑on‑market data – a drop would signal stronger seller power. 2. Vacancy rate trends – rising vacancies would pressure yields. 3. Interest‑rate movements – higher rates could compress net returns. 4. Any announced infrastructure or transport projects – these could accelerate price growth. - Recommended strategy: Hold existing positions and consider new entry only if the purchase price aligns with the median and the yield meets or exceeds 3.8%. Prioritise long‑term capital growth; revisit the case for short‑term rentals only when reliable STR data becomes available.