Property management specialist David Easton had been looking for an affordable investment opportunity in Sydney’s south-east for 18 months when he spotted a deceased estate coming up for auction.
The two-bedder in the 1960s block at 31/56-62 Anzac Parade was no palace but it was full of light, was neat and tidy and had off-street parking.
But best of all, it was just a few steps from a light rail stop.
“My first thought was that the light rail is coming through and it’s going to increase in value,” said Mr Easton, who operates Eastcastle property which mainly focuses on north shore rentals.
He submitted a take-it-or-leave-it offer of $725,000 and was overjoyed to win the keys on November 29.
The purchase looks particularly savvy following a report highlighting that houses in the south-east have become the city’s least affordable properties.
New research shows house prices in the region surged 21 per cent over the past three years – a period when prices fell in most suburbs.
House prices are now more than 20 times the average annual income of local households.
Kensington, with its median house price of $2.6 million, has the biggest gap between house prices and incomes according to analysis of ABS and CoreLogic data.
Kensington apartments, though, are still relatively affordable with a median price of $785,000.
Mr Easton got a good deal on his two-bedder, though there are smaller Kensington apartments close to the light rail that are even cheaper.
McGrath agents Jessica Trantau and Chris Volpatti have a north-facing studio overlooking Centennial Park at 12/35 Alison Rd, Kensington up for auction on February 18 with a $380,000 guide.
“It’s literally across the street from the light rail stop,” says Ms Trantau.
“It’s definitely going to increase the value of it.”
She says it could be a good option for a first homebuyer. Although it’s only 33 sqm — often hard to finance without a huge deposit — Ms Trantau says she works with a mortgage broker who specialises in securing loans for apartments from 19 sqm.
“I don’t think it will be an issue,” she said.
It could also be attractive for an investor, who could expect it to rent quickly for between $350 and $400 a week.
Certainly Mr Easton had no difficulty finding a tenant quickly for his two bedder.
It’s been snapped up by two students from the nearby University of NSW, who will pay $615 a week.
“The plan is to rent it out to help clear the start of the mortgage and I’ll eventually move in there because it’ll be great to get to work in the city,” Mr Easton said.
“I love going down to Kingford for all the great restaurants and with the light rail it will be easy to get down there.”
The light rail from Circular Quay to Kensington and Kingsford Juniors is set to open in March.
Apartments in Kingsford are also relatively affordable: $812,000 compared with $1.97 million for houses.