Tennyson SA Property Investment

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## 2. Market Overview - Median house price: $1,787,500 - Median unit price: $768,143 - 1‑year price growth: 24.5 % (very strong upside) - 5‑year CAGR: 4.7 % per annum (steady long‑term growth) - 3‑year forecast growth: 13.5 % (expected continuation) - Days on market: *Data not provided*

Signal: The 24.5 % jump in the past year, combined with a 13.5 % forecast over the next three years, points to a seller‑favoured market at present. Buyers will face price pressure, while sellers can command premium offers.

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## 3. Rental Market - Median weekly rent: $850 / wk - Gross rental yield: 2.5 % - Vacancy rate: *Data not provided* - Demand rating: *Data not provided*

Implication: A 2.5 % gross yield is modest, indicating that rental cash‑flow alone is unlikely to cover financing costs in a high‑price environment. Investors must rely on capital growth to achieve attractive total returns. The absence of vacancy and demand data adds uncertainty to the rental side of the equation.

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## 4. Short‑Term Rental Opportunity - STR nightly rate: *Data not provided* - STR occupancy: *Data not provided* - Estimated annual STR revenue: *Data not provided*

Conclusion: With no STR metrics available, we cannot quantify the short‑term rental upside. Given the high median house price, a long‑term rental (LTR) strategy remains the more data‑backed approach for now.

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## 5. Infrastructure & Growth Drivers - Known projects, transport upgrades, employment hubs: *Data not provided*

Observation: Without specific infrastructure or employment information, we cannot identify concrete demand catalysts or constraints for Tennyson at this stage.

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## 6. Bull Case Assume the 3‑year forecast of 13.5 % growth materialises:

• Projected median house price in 3 years:

• Potential capital gain: ≈ $241,100 (≈13.5 % increase)

If the gross rental yield holds at 2.5 % and rent rises in line with inflation (≈2–3 % p.a.), total return could approach 5–6 % p.a. over the same horizon.

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## 7. Risks | Risk | Quantified Element | Impact | |------|--------------------|--------| | Interest‑rate sensitivity | Median house price $1,787,500 | High loan size means any rate rise sharply raises servicing costs, potentially outpacing the 2.5 % rental yield. | | Low rental yield | Gross yield 2.5 % | May not cover mortgage interest, especially if rates exceed 5 % p.a. | | Data gaps (vacancy, demand, infrastructure) | No vacancy or demand figures | Uncertainty around rental stability and future demand drivers. | | Potential oversupply | No supply pipeline data | If new units enter the market, yields could be pressured further. |

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## 8. The Play - Entry range: Around the median house price – $1,787,500 (or slightly below if a discount can be negotiated). - Minimum yield target: 2.5 % gross (the current market figure). - Watch signals: 1. RBA interest‑rate moves – any increase above current levels erodes cash‑flow. 2. Release of local infrastructure or employment projects – could lift demand and justify higher rents. 3. Vacancy data – a rise would signal weakening rental fundamentals. - Recommended strategy: Acquire a quality house (or high‑end unit) at or under the median price, hold for 3–5 years to capture the projected 13.5 % capital appreciation, and rely on modest rental income while monitoring interest‑rate and any emerging infrastructure announcements. If STR data later becomes available and shows strong nightly rates/occupancy, reassess the LTR vs. STR mix.