In both city’s most tightly held and prized locations – on the waterfront, it becomes even more obvious why Sydney investors are buying in the Gold Coast. And whilst a lot of Sydneysiders would expect Gold Coast property to be more affordable, they often don’t realise how stronger yields can impact their yearly cashflow.
Waterfront property is sought-after by many investors, knowing that with proximity to water often comes accelerated long-term capital growth.
Sydney’s prestigious water suburbs typically attract higher rents, especially when they’re within easy access to the city and busy cafes and restaurants – but their yields (i.e. the rental price in comparison to the purchase price) can be incredibly low, making these assets hard to hold over the long term.
For a water-view apartment in Sydney, like the example below in the prestigious suburb of Elizabeth Bay, an investor would expect to pay a purchase price of $1,840,000. It rents out for approximately $1,100 per week, translating to a rental return of 3.1%. Based on an interest rate of 3.74% p.a., an 80% loan-to-value ratio, and mortgage repayments of $6,809 a month, this investor would need to chip in an additional $24,508 per year to hold this apartment.

It’s surprisingly high when you compare it to the cost of buying and holding a brand new apartment in the Gold Coast. Here’s how our Sydney example compares to an upcoming apartment building we’re recommending to our customers in the Gold Coast.
In a prized waterfront location in a prestigious area of Surfers Paradise, a 2 bedroom + media room apartment in this boutique, luxury building would set an investor back roughly $700,000 – a surprisingly affordable price considering Sydney’s waterside prices. It rents out for around $690 per week, translating to a rental return of 5.1%. Based on an interest rate of 3.74% p.a., an 80% loan-to-value ratio, and mortgage repayments of $2,235 a month, this apartment would generate $9,060 a year in positive cashflow for its investor.
Of course, other factors need to be considered like strata and council rates, but as a simple example it highlights the appeal of the Gold Coast to Sydney investors.
|
GOLD COAST
Water front apartment
|
SYDNEY
Water view apartment
|
|
Surfers Paradise |
Elizabeth Bay |
Location
|
On the Nerang River
Stroll to tram stop
Stroll to beaches |
Across the road from Elizabeth Bay Marina
Stroll to bus stop
Stroll to Rushcutters Bay Park |
Bed, Bath, Car
|
2 + MPR,2,1 |
2,2,1 |
Sale Price
|
$699,900 |
$1,840,000 in 2019 |
Age
|
Completion early 2022 |
Circa 1971, renovated in 2000s |
Estimated Rental Return
|
$690 / week (approx.)
$35,880 / year |
$1,100 / week (approx.)
$57,200 / year |
Approx
Gross Rental Yield
|
5.1% |
3.1% |
Approx mortgage repayments
(based on 80% LVR & 3.74% p.a. loan)
|
$2,235 / month
$26,820 / year |
$6,809 / month
$81,708 / year |
Approximate cashflow
|
$35,880 – $26,820
= $9,060 / year |
$57,200 – $81,708
= – $24,508 / year |