Lock SA Property Investment

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## 2. Market Overview - Median house price: $256,137 - 1‑year price growth: +23.7 % - 5‑year CAGR: +14.3 % per year - 3‑year growth forecast: +13.5 % per year - Days on market: *Data not supplied*

Signal: Prices are rising sharply, indicating strong seller momentum. With no days‑on‑market data we cannot gauge buyer‑seller balance, but the high recent growth suggests buyers are paying a premium, while sellers can command strong prices.

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## 3. Rental Market | Metric | Value | Interpretation | |--------|-------|----------------| | Median weekly rent | $123 | Low absolute rent reflects the suburb’s affordability. | | Gross rental yield | 2.5 % | Below the minimum yield most investors target; cash‑flow pressure is likely. | | Vacancy rate | *Data not supplied* | Absence of a vacancy figure prevents a precise demand rating, but the low yield hints at weak rental demand. | | Demand rating | *Data not supplied* | Not enough information to assign a rating. |

What it means: With a 2.5 % yield, an investor would need a very low loan‑to‑value ratio or a substantial rent increase to achieve a positive cash flow. The rental market currently offers limited upside.

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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: Because no short‑term rental metrics are available, we cannot quantify STR performance. Given the low long‑term yield, STR could be attractive *if* a strong tourism or event market exists, but we lack evidence to support that claim. At present, LTR remains the only quantifiable option, albeit with a weak yield.

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

Assessment: The absence of concrete infrastructure or employment data means we cannot identify any specific catalyst driving demand. The strong price growth is therefore likely price‑momentum driven rather than underpinned by new jobs or transport upgrades.

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## 6. Bull Case If the 3‑year growth forecast of 13.5 % per annum materialises, the median house price could climb to:

\[ \$256,137 \times (1 + 0.135)^3 \approx \$374,000 \]

A price of ≈ $374k would represent a +46 % increase over today’s median. Should rental demand improve enough to lift weekly rent to $150, the gross yield would rise to:

\[ \frac{150 \times 52}{374,000} \times 100 \approx 2.9\% \]

Even in this optimistic scenario the yield remains under 3 %, so cash‑flow would still be tight.

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• Entry price range: Around the current median, $250k – $260k.
• Minimum yield target: ≥ 3 % gross (to provide a buffer against financing costs and vacancy).
• Watch signals:

• Recommended strategy:
• - Avoid acquiring a property in Lock at this time.
• - Re‑evaluate if and when the suburb publishes vacancy figures, infrastructure projects, or if rental yields climb above 3 %.
• - If you already own a property here, consider holding only if you can refinance at a low rate and have sufficient cash‑flow reserves; otherwise, look to exit to redeploy capital into higher‑yielding markets.