Raleigh NSW Property Investment

## 1. Investment Verdict Hold – the 1‑year price change of ‑30.8 % is the key figure. It shows a sharp recent decline, but the 3‑year forecast of +13.5 % leaves upside potential, supporting a hold rather than a buy or avoid stance.

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## 2. Market Overview - Median house price: $1,065,523 - Median unit price: $834,556 - 1‑year price growth: ‑30.8 % (price fell sharply) - 5‑year CAGR: 8.5 % per year (long‑term growth trend) - 3‑year forecast: +13.5 % (expected rebound) - Days on market: *data not supplied*

Signal: Buyers enjoy strong negotiating power after the recent 30 % price drop. Sellers must price aggressively to attract offers, as the market is still correcting.

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## 3. Rental Market - Median weekly rent: $330 / wk - Gross rental yield: 1.6 % - Vacancy rate: *data not supplied* - Demand rating: *data not supplied*

Implication: The 1.6 % yield is well below the 4‑5 % benchmark many investors target, indicating limited cash‑flow upside. Without vacancy data we cannot confirm rental stability, so investors should treat the rental market as modestly attractive at best.

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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: With no STR metrics available, we cannot quantify the short‑term rental upside. Given the low long‑term yield, investors should default to a long‑term rental (LTR) strategy until reliable STR data emerges.

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## 5. Infrastructure & Growth Drivers - Known projects, transport upgrades, major employers: *data not supplied*

Assessment: Without specific infrastructure or employment information, we cannot identify concrete demand drivers or constraints for Raleigh.

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## 6. Bull Case Assume the 3‑year forecast materialises and the market recovers on schedule:

• Median house price: $1,065,523 × (1 + 13.5 %) ≈ $1,209,191
• Median unit price: $834,556 × (1 + 13.5 %) ≈ $947,301

If rental yields improve to 2.5 % (from 1.6 %) while rents stay at $330 / wk, the annual rent would be $17,160, giving:

• House annual rent: $17,160 ÷ $1,209,191 ≈ 1.4 % (still low)
• Unit annual rent: $17,160 ÷ $947,301 ≈ 1.8 %

The bull case hinges on price appreciation rather than cash‑flow improvement.

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## 7. Risks | Risk | Metric / Reason | |------|-----------------| | Price‑decline risk | 1‑year drop of ‑30.8 % could continue if market sentiment stays negative. | | Yield pressure | Current gross yield of 1.6 % is far below typical investor thresholds, limiting cash‑flow resilience. | | Vacancy uncertainty | Vacancy rate not provided; a high vacancy would further erode returns. | | Supply pipeline | No data on upcoming dwellings; a surge in new supply could suppress prices and yields. | | Interest‑rate sensitivity | Low yield means any rise in borrowing costs quickly outweighs rental income. | | Demand data gap | Absence of demand rating and vacancy figures makes it hard to gauge rental market strength. |

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## 8. The Play - Entry price range: $834,556 (median unit) – $1,065,523 (median house). - Minimum yield target: ≥ 2.0 % gross (to improve cash‑flow over the current 1.6 %). - Watch signals: 1. Publication of vacancy data for Raleigh. 2. Confirmation of any infrastructure or employment projects. 3. Movement in the 3‑year growth forecast (e.g., revised upward/downward revisions). 4. Changes in the Reserve Bank’s cash‑rate that affect borrowing costs. - Recommended strategy: Maintain a hold position. Acquire only if you can negotiate a price that lifts the gross yield to at least 2 % (e.g., buying below the median). Prioritise properties with strong unit‑level demand or potential for future STR conversion once market data becomes available. Monitor the above signals and be ready to exit if yields stay below target or if price declines persist.