South West Rocks NSW Property Investment

## 1. Investment Verdict Hold – the median house price of $772,561 anchors the analysis; at that price the current gross rental yield is only 3.4%, indicating modest cash‑flow upside and limited price‑growth momentum.

## 2. Market Overview - Median house price: $772,561 - Median unit price: $606,875 - 1‑year price change: –2.9% (price fell over the last 12 months) - 5‑year CAGR: 3.5% per year (steady long‑term growth) - 3‑year forecasted growth: 13.5% (projected upside)

*Signal:* The recent –2.9% dip gives buyers some negotiating power, while the 5‑year CAGR of 3.5% and 13.5% forecast keep sellers optimistic about future appreciation. Days on market data were not supplied, so we cannot comment on sale speed.

## 3. Rental Market - Median weekly rent: $508 - Gross rental yield: 3.4%

*Vacancy rate, demand rating and other rental metrics were not provided.* *Interpretation:* A 3.4% yield is modest for an investor; it covers financing costs in a low‑interest environment but leaves little buffer if vacancy rises or rent growth stalls.

## 4. Short‑Term Rental Opportunity No STR data (nightly rate, occupancy, or revenue) were supplied. With only long‑term rental figures available, LTR remains the clearer investment path for now.

## 5. Infrastructure & Growth Drivers The data set does not list any specific projects, transport upgrades, or major employers. The 13.5% three‑year growth forecast suggests underlying demand drivers—likely tourism and lifestyle appeal—but we cannot quantify them without further information.

## 6. Bull Case If the 13.5% growth forecast materialises over the next three years and rental demand improves:

• Property value: $772,561 × 1.135 ≈ $877,000 (median house price)
• Potential rent uplift: Assuming rent rises in line with price growth, weekly rent could climb to roughly $578 (508 × 1.135).
• Yield impact: With a higher rent and the same price, gross yield could edge toward 4.0% (578 × 52 ÷ 877,000).

## 7. Risks | Risk | Numerical Indicator | Impact | |------|---------------------|--------| | Price decline | –2.9% over the past year | Reduces equity and may pressure yields if rents stay flat | | Low yield | 3.4% gross | Small cash‑flow cushion; sensitive to vacancy or interest‑rate rises | | Vacancy uncertainty | Data not supplied | Unknown exposure; a rise above 5% could erode returns | | Supply pipeline | No data on new dwellings | If significant new stock enters the market, price and rent growth could stall | | Rate sensitivity | Not quantified | Higher borrowing costs would further compress the thin 3.4% yield |

## 8. The Play - Entry price range: $700,000 – $800,000 (around the median house price of $772,561) - Target minimum yield: ≈ 3.5% (slightly above the current 3.4% to provide a modest safety margin) - Watch signals: * Any published vacancy rate for the suburb * Updates on local infrastructure or tourism projects * Changes in the 1‑year price trend (e.g., a shift from –2.9% to positive) * Interest‑rate movements that affect financing costs

Recommended strategy: Acquire a well‑maintained house or unit within the $700k–$800k band, aim for a gross yield of at least 3.5%, and hold for 3–5 years to capture the forecast 13.5% price upside while monitoring rental market data for any signs of yield improvement or emerging vacancy pressure.