Wellington NSW Property Investment

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## 2. Market Overview - Median house price: $357,173 - 1‑yr price growth: +8.3 % - 5‑yr CAGR: +3.2 % per year - 3‑yr growth forecast: +13.5 %

*Interpretation* – Price growth has accelerated over the past 12 months (8.3 %) and the 3‑year forecast (13.5 %) suggests upside potential. Because days‑on‑market data are not supplied, we cannot gauge how quickly properties are selling, but the price momentum signals a modestly seller‑friendly market today. Buyers should focus on cash‑flow (yield) rather than rapid capital gains.

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## 3. Rental Market - Median weekly rent: $433 / wk - Gross rental yield: 6.3 %

*Vacancy rate* and *demand rating* are not provided, so we cannot quantify rental‑market tightness. Nonetheless, a 6.3 % yield is above the national average for houses and indicates a solid cash‑flow base for investors.

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## 4. Short‑Term Rental Opportunity No data on nightly STR rates, occupancy, or estimated annual STR revenue are supplied. With the information at hand we cannot compare long‑term rental (LTR) to short‑term rental (STR). At present, LTR remains the only quantifiable option.

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## 5. Infrastructure & Growth Drivers The data set does not list any specific infrastructure projects, transport upgrades, or major employment hubs. Consequently we cannot attribute demand to particular drivers or identify limiting factors beyond the general growth figures already noted.

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## 6. Bull Case If the 3‑year forecast of +13.5 % materialises and the 6.3 % yield is maintained:

• Capital growth: $357,173 × 1.135 ≈ $405,000 after three years (≈ +13.5 %).
• Rental income: $433 × 52 = $22,516 pa → gross yield on the forecasted $405,000 value ≈ 5.6 % (still respectable).

In this scenario, an investor who entered at the median price could see roughly $48,000 of combined capital gain and rental cash‑flow over three years.

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## 7. Risks | Risk | Numerical indicator | Why it matters | |------|--------------------|----------------| | Price‑growth slowdown | 5‑yr CAGR of only 3.2 %/yr | If growth reverts to the longer‑term average, capital gains could lag yield returns. | | Interest‑rate sensitivity | Yield of 6.3 % vs typical mortgage rates (currently ~5‑6 % for owner‑occupiers, higher for investors) | Rising rates could compress net cash flow, especially if borrowing costs exceed the gross yield. | | Vacancy uncertainty | Vacancy rate not supplied | Without a vacancy figure we cannot gauge the risk of rental gaps; a high vacancy would erode the 6.3 % yield. | | Supply pipeline unknown | No data on new dwellings | If a large number of new houses enter the market, rental competition could push yields lower. | | Employment concentration unknown | No employer data | Lack of a dominant employer makes it harder to assess resilience to job losses. |

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## 8. The Play - Entry range: Around the median house price of $357,173 (use a ±5 % band to allow for negotiation). - Minimum yield target: ≥ 6 % gross (the current 6.3 % meets this threshold). - Watch signals: 1. Publication of vacancy data for Wellington. 2. Confirmation of any new housing supply (development approvals). 3. Changes in the 3‑year growth forecast from the market data provider. 4. Movements in the cash‑rate that could affect investor borrowing costs. - Recommended strategy: Acquire a property at or below the median price, lock in a financing structure that yields a net cash flow above 5 % after interest, and hold for 3‑5 years to capture the forecasted 13.5 % capital uplift while collecting the 6.3 % rental yield. Re‑assess annually against vacancy and supply data; if vacancy rises or new supply spikes, consider repositioning or exiting.