Surrey Hills VIC Property Investment

## 1. Investment Verdict We rate Surrey Hills, VIC as a Buy, with the single most important number justifying this verdict being the 5.7% 5-year compound annual growth rate (CAGR), indicating a strong long-term growth trend.

## 2. Market Overview The median house price in Surrey Hills is reported at $2,102,003 by a single source (OnTheHouse only, no peer validation available), while the median unit price is $917,675. The market is currently in a cooling cycle, with a 1-year price growth of -2.5%. Despite this, the 5-year CAGR of 5.7% suggests that Surrey Hills has a history of steady growth. The days on market are not available, but the owner-occupier rate of 75% indicates a strong demand for properties in this suburb. For buyers, the current market cycle may present an opportunity to negotiate prices, while sellers may need to be more flexible with their pricing expectations.

## 3. Rental Market The rental market in Surrey Hills is characterized by a median weekly rent of $900, a gross rental yield of 2.2%, and a vacancy rate of 2.2%. The rental demand is high, with an unemployment rate of 4.3%. These numbers suggest that investors can expect a relatively stable rental income, although the yield is on the lower side. The high demand for rentals, coupled with the low vacancy rate, indicates that investors are likely to experience minimal vacancy periods.

## 4. Short-Term Rental Opportunity Unfortunately, the data on short-term rental opportunities in Surrey Hills is limited, with no information available on the median nightly rate or occupancy rate. As a result, it is difficult to estimate the potential annual revenue from short-term rentals. However, based on the available data, long-term rentals appear to be a more stable option, with a higher demand and lower vacancy rate.

## 5. Infrastructure & Growth Drivers Surrey Hills is well-connected, with several major infrastructure projects underway, including the North East Link, Suburban Rail Loop East, and West Gate Tunnel. The Angliss Hospital Expansion is also a significant development in the area. These projects are likely to drive growth and increase demand for properties in Surrey Hills. The suburb's transport links are also a major drawcard, making it an attractive location for residents and investors alike.

## 6. Bull Case If market conditions hold or improve, the upside scenario for Surrey Hills is promising. With a 3-year growth forecast of 2.2%, investors can expect a moderate increase in property values. Additionally, the strong long-term growth trend, as evidenced by the 5.7% 5-year CAGR, suggests that Surrey Hills is a solid investment opportunity. If the rental yield increases, even marginally, the investment case for Surrey Hills becomes even more compelling.

## 7. Risks There are several risks associated with investing in Surrey Hills. The premium price point of $2,102,003 (single source) limits the buyer pool and increases interest rate sensitivity, making it a higher-risk investment. The supply pipeline is moderate, with development activity consistent with long-term averages, which may impact property values. The vacancy risk is relatively low, with a vacancy rate of 2.2%, but investors should still be aware of the potential for vacancies. The suburb's economy is not dependent on a single employer, reducing the risk of economic downturn.

## 8. The Play For investors looking to enter the Surrey Hills market, we recommend targeting properties in the $1.8-2.2 million range, with a minimum yield of 2.5%. Investors should watch for signs of improving market conditions, such as increasing rental yields or a decrease in days on market. The recommended strategy is to hold for the long term, riding out any short-term market fluctuations. With a strong growth trend and limited risks, Surrey Hills presents a compelling investment opportunity for those willing to take a long-term view.

This analysis is for informational purposes only and does not constitute financial, legal, or investment advice. Seek professional advice before making investment decisions.