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Rent-vesting could be key to the market for first home buyers

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First home buyers in Sydney can look to ‘rent-vesting’ as a way to enter the market, while buying conditions are better than ever.

‘Rent-vesting’ refers to the concept of buying a property as an investment, in an area which is affordable and experiencing significant boom conditions, while choosing to rent in a preferred, more expensive area.

Peter Kerras, Sales Director at Colliers International suggests while many Sydney first home buyers choose to buy in expensive, popular areas such as the Eastern suburbs and Lower North Shore, inner west areas such as St George, Canterbury, Bankstown and Gladesville, have seen a significant price drop and are experiencing booming conditions.

“The St George Canterbury and Bankstown areas currently offer some of the highest rental returns in Sydney and at the moment there is a lot of choice in these areas,” said Peter Kerras.

“First home buyers seeking capital growth should be looking in these areas to bag a bargain not compete with other buyers to pay a premium with the prospect of modest growth.”

“With rent returns now higher than interest rates in some areas, it has never been a better time to buy an investment property and the strategy of ‘rent-vesting’ – buying in a more affordable area with great returns and stay renting where you know - can be a great way for young people to enter the market.”

Currently, the price difference between a new property and an older property has never been less.

“Traditionally you would be paying 20% more for a new property as opposed to second hand property, however the unsure lending environment has brought down the price of new property in certain areas, which is great news for investors,” Mr Kerras said.

“There is a lot of misconception and fear around buying off the plan; however, many of these are unfounded. New properties have much better noise insulation, sound proofing, fire safety, plumbing and wiring and the latest modcons.”


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Peter Kerras

Sales Director | Project Marketing

Residential

Sydney CBD

With over 35 years' experience in Real Estate, I have become an expert in prestige project marketing and auctions, bringing a wealth of experience, knowledge and integrity to the Colliers International residential team.

I work alongside my fellow Directors to manage and lead the NSW Residential team, overseeing the marketing and sales teams to ensure a high level of service is provided to our vendors and purchasers alike, and that they achieve success through their parnership with Colliers International.

Prior to my current tenure at Colliers, I owned and operated a successful franchise in Neutral Bay for 8 years focusing on auctions and high-end Residential before joining Colliers International for the first time in 1998. In 2007 I joined CBRE Residential Projects and was earmarked to grow the resale business and focus on high-end residential projects before then returning to Colliers International.

During my years in Residential Real Estate, I have been instrumental in some record breaking sales at Milsons Point, Neutral Bay, Potts Point, Abbotsford and most notably set a record in Sydney with the sale of the Hyde Penthouse for $12.5m. I take great pride in providing solid and honest advice to all my clients and building strong relationships with vendors and purchasers, ensuring that I become their main point of contact for all their residential needs.

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