Kenthurst NSW Property Investment

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## 2. Market Overview - Median house price: $3,158,009 - Median unit price: $1,104,637 - 1‑year price growth: 1.7 % - 5‑year CAGR: 5.6 % / yr - 3‑year growth forecast: 5.7 % / yr - Days on market: *data not supplied*

Signal: Price growth is modest in the short term (1.7 % over the past year) but the 5‑year CAGR and 3‑year forecast show a clear upward trajectory. With limited days‑on‑market data, the modest 1‑year growth suggests a relatively balanced market – buyers can still negotiate, while sellers benefit from the longer‑term appreciation trend.

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## 3. Rental Market - Median weekly rent: $1,025 - Gross rental yield: 1.7 % - Vacancy rate: *data not supplied* - Demand rating: *data not supplied*

Interpretation: A 1.7 % gross yield is low for a capital‑growth suburb, indicating that rental income alone will not drive returns. Investors should rely primarily on capital appreciation, using the strong 5‑year CAGR as the main upside driver.

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

Conclusion: With no STR metrics available, we cannot quantify the short‑term rental upside. Given the low long‑term yield, investors should treat STR as a secondary consideration only if they can source reliable local STR data that demonstrates a clear premium over the 1.7 % LTR yield.

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

Implication: The absence of explicit infrastructure data means we must infer demand from the price performance itself. The sustained 5‑year CAGR suggests underlying factors (e.g., lifestyle appeal, limited supply, or proximity to employment hubs) are already supporting growth.

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## 6. Bull Case Assume the 3‑year growth forecast of 5.7 % holds:

• Projected median house price in 3 years:

• Potential capital gain: roughly $570,000 over three years, or about 18 % total appreciation.

If rental demand improves and the gross yield rises to 2.2 % (a modest uplift), the annual rental income would increase to about $1,150 × 52 ≈ $59,800, adding a small cash‑flow boost to the capital gains.

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## 7. Risks | Risk | Detail (numbers) | |------|------------------| | Low rental yield | Current gross yield is only 1.7 %; any rise in interest rates will compress net cash flow. | | Interest‑rate sensitivity | With a 1.7 % yield, a 1 % increase in borrowing cost could turn cash flow negative. | | Vacancy uncertainty | Vacancy rate not provided – a rise above 3 % would further erode the thin yield. | | Supply pipeline unknown | No data on upcoming developments; a sudden increase in housing supply could dampen price growth. | | Data gaps | Absence of days‑on‑market, STR, and infrastructure information limits precise risk quantification. |

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## 8. The Play - Entry price range: Target houses near the median ($3.1 – $3.3 million) or units around the median ($1.0 – $1.2 million). - Minimum yield to target: Aim for at least 2.0 % gross (above the current 1.7 %) to provide a buffer against rate hikes. This may require negotiating a purchase price below the median or securing a higher‑rent tenant. - Watch signals: 1. Quarterly updates to the 1‑year price growth figure – a shift above 2 % would confirm accelerating demand. 2. Any published vacancy data; a rise above 3 % would be a red flag. 3. Announcements of new infrastructure or large‑scale developments within the suburb. - Recommended strategy: Buy‑and‑hold with a focus on capital growth. Secure a purchase price that delivers at least a 2 % gross yield, then let the 5‑year CAGR drive the primary return. Consider a secondary STR analysis only if reliable nightly‑rate and occupancy data become available.

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*All figures are taken directly from the supplied data; no assumptions beyond basic compound‑growth calculations have been introduced.*