Kearsley NSW Property Investment

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## 1. Investment Verdict Hold – the 21.6% 1‑year price growth is the key figure. It shows strong upside potential, but the modest 3.2% gross yield tempers enthusiasm, leaving the suburb best suited to a hold position until the yield improves or growth stabilises.

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## 2. Market Overview - Median house price: $772,847 - Median unit price: $561,977 - 1‑year price growth: +21.6% - 5‑year CAGR: +11.3% per year - 3‑year growth forecast: +13.5% (projected) - Days on market: *Data not supplied*

Signal: The double‑digit price growth over the past year and a solid 5‑year CAGR indicate a seller‑friendly market. With no days‑on‑market figure, we cannot quantify how quickly listings are moving, but the price momentum suggests buyers face competition while sellers can command premium prices.

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## 3. Rental Market - Median weekly rent: $483 - Gross rental yield: 3.2% - Vacancy rate: *Data not supplied* - Demand rating: *Data not supplied*

Implication: A 3.2% gross yield is modest for an investor; it covers basic costs but leaves limited buffer against interest‑rate rises or unexpected expenses. Without vacancy data we cannot gauge rental security, but the yield alone points to a cautious, income‑focused approach rather than a high‑return play.

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

Conclusion: Because no STR metrics are available, we cannot compare long‑term rental (LTR) versus short‑term rental profitability. In the absence of evidence that STR would outperform the 3.2% LTR yield, we default to LTR as the safer option.

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

Assessment: Without specific information on new developments, transport upgrades, or major employers, we cannot identify concrete catalysts or constraints. The strong price growth suggests underlying demand, but the lack of disclosed drivers adds uncertainty to future performance.

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## 6. Bull Case If the 3‑year forecast of +13.5% materialises and price growth continues at a similar pace:

• House price after 3 years: $772,847 × (1 + 0.135) ≈ $877,511
• Capital gain: ≈ $104,664 per median house

Assuming rent stays at $483 wk and the yield improves to 4% (through rent growth or price moderation), the investor could achieve a more attractive cash‑flow profile while benefitting from solid capital appreciation.

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## 7. Risks | Risk | Metric / Evidence | Potential Impact | |------|-------------------|------------------| | Yield pressure | Gross yield 3.2% | Small margin to cover financing costs if interest rates rise. | | Vacancy uncertainty | Vacancy rate not provided | Unknown rental security; a rise could erode cash flow. | | Limited data on employment | Employment base not supplied | Possible reliance on a few local employers; a downturn could depress demand. | | Supply pipeline unknown | New projects not supplied | Unseen increase in housing stock could soften price growth and rents. | | Interest‑rate sensitivity | Yield 3.2% vs typical loan rates | Higher rates could turn positive cash flow negative. |

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## 8. The Play - Entry price range: - Houses around $772,847 (median) - Units around $561,977 (median)

• Minimum yield target: ≥ 3.5% to provide a cushion above the current 3.2% yield and absorb modest rate hikes.

• Watch signals:

• Recommended strategy:
• - Hold existing positions and monitor the above signals.
• - For new entrants, consider acquiring a unit at the lower median price to improve yield potential, provided financing costs stay favourable.
• - Re‑evaluate after 12 months; if yields improve or new growth drivers emerge, upgrade to a Buy stance.

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*All analysis is strictly based on the supplied data; where data were missing, we have noted the gap rather than infer or fabricate figures.*