Is Port Stephens A Good Place To Invest In Property?
Buying an investment property can be an overwhelming feat. From saving the deposit to securing finance approval, the time and effort required to become purchase-ready is a mammoth task. And you haven’t even begun to search for properties yet! This article outlines all the details of what our local experts consider when advising our clients on investing in the Port Stephens market.
Coastal Holiday Lifestyle With Robust Local Economy
Port Stephens offers a unique blend of coastal and holiday lifestyles with a diverse local economy. Located just a short drive from Newcastle and less than three hours from Sydney, this region boasts stunning beaches, a beautiful coastline, and a vibrant tourism industry, especially along the peninsula. The natural beauty and thriving community attract a steady stream of investors, owner-occupiers from Sydney and other parts of the country, and locals who see the demand first-hand. Many of our clients purchasing in Port Stephens are downsizers looking for a slower way of life or investors capitalising on the natural supply restrictions of the peninsula itself.
Affordable Price Points
Port Stephens offers a wide variety of investment brackets depending on your budget.
$500,000 - $700,000
This price point typically allows our clients to purchase three-bedroom family homes in select suburbs such as Raymond Terrace, Medowie, and Tanilba Bay. Capital growth in these locations has ranged from 6.5% to 6.7% per annum compounded over the last decade, with rental returns around 4.1% to 4.3% per annum in the current market.
$700,000 - $900,000
In this bracket, our recommendations shift to areas like Nelson Bay, Salamander Bay, and Anna Bay. Here, you can find three-bedroom homes with one or two bathrooms on quiet streets for less than $900,000, offering rental returns of around 3.9% to 4.1%. Growth rates have been appealing, with some suburbs compounded by 6.7% and 6.9% per annum.
$900,000 +
Investing over $900,000 in Port Stephens suggests a focus on high-growth assets. Freestanding houses in areas like Shoal Bay, Fingal Bay, Boat Harbour and Corlette will likely deliver the highest returns for the lowest risk. These suburbs have grown from 7.0% to 7.2% per annum compounded over the last decade, with rental yields around 3.6% to 3.9%.
Know The Local Risks
Buying property anywhere has its risks, and Port Stephens is no exception. Here are some specific risks to consider:
Flood Zoning
Some areas of Port Stephens are prone to flooding. Before purchasing a property, it’s crucial to check flood maps and understand its flood history. Properties in flood-prone areas may have higher insurance premiums and could face challenges with tenanting.
Bushfire Zoning
Port Stephens is known for its beautiful bushland, which can also pose a risk for bushfires, especially towards the southeast of Nelson Bay and west of Fingal Bay. Ensure you understand any property's bushfire zoning and take necessary precautions. Properties in high bushfire risk areas may have additional building regulations and higher insurance costs, so consider this when analysing the numbers.
Salt Erosion
Proximity to the coast brings the risk of salt erosion, which can affect a property's longevity and maintenance costs. Be aware of the impact of salt on building materials and consider properties that are built to withstand these conditions. Regular maintenance and appropriate building materials can mitigate some of these risks but can also add unexpected costs that may strain your cashflows.
Conclusion
Port Stephens presents a compelling opportunity for property investors with its blend of coastal charm, affordable price points, and potential for strong capital growth. However, understanding the local risks is crucial to making an informed investment decision. If you're considering investing in Port Stephens, our team of local experts is here to guide you through every step of the process, ensuring you make a wise and profitable investment.
Ready to explore investment opportunities in Port Stephens?
