Flexibility and greater affordability on offer for wise Sydney property buyers
The smart money is on this part of the nation’s most expensive capital as prices hold steady and yields continue to perform consistently
3 min
Western Sydney is increasingly the smart choice for canny property investors, a new report suggests.
The Month in Review report for March 2023 by property valuation and advisory group Herron Todd White singled out the region as representing more varied and affordable options with consistently strong yields for both units and houses over the next few months as investors and owner-occupiers navigate a volatile property market.
“Western Sydney has always been a smart choice for investors and owner-occupiers alike and despite the weaker market, we consider this should continue throughout 2023,” the report said. “The high level of infrastructure investment in the region coupled with relatively lower median house prices and the shift to more people working from home has highlighted that more affordable and larger homes with backyards are still hot property and good long-term propositions.
“The ever-popular house and granny flat is a staple for Western Sydney investors given the larger block sizes and versatile living arrangements for extended families or as a pure investment.”
While values have softened over the past 12 months, the falls have not been nearly as substantial as they have been in other parts of Sydney. The report points to areas such as Blacktown where median values dropped by just 1.2 percent over the past year to $870,000 while yields have increased by 7.5 percent to $457 a week over the same period. The results are even more significant in Penrith, where median rent for a two-bedroom unit now sits at $420 per week, an increase in yield of 4.1 percent. At the same time, the median price of a two-bedroom unit has risen by 11.4 percent to $532,500 over the past year. The report points to the area’s relative affordability and planned infrastructure to account for the rise.
Greater demand for more rental units around universities as students return to the Australian higher education market has been responsible for increased yields around Macquarie Park, the report said, as staff and students at Macquarie University seek accommodation.
“There are only 110 units currently available for rent with an estimated 1500 renters actively looking for accommodation,” the report said. “Macquarie University is home to more than 44,000 students and 2000 staff members. The Australian Government predicts a further 40,000 international students are expected to arrive in Australia for first semester classes in 2023 commencing in March.”
At the moment, the rental yield for Macquarie Park is 3.6 percent, while the average yield for the rest of Sydney sits at 2.7 percent.
National director of residential at Herron Todd White, Ben Esau, said that there is likely to be further volatility in the residential market in the coming months as more borrowers come off fixed interest rates. Estimates suggest that up to a third of mortgage holders are fixed on lower rates, with most expected to end this year. While it may provide opportunity for those looking to add to their portfolio or enter the market, as the RBA continues to lift rates, caution is advised to those chasing higher yields.
“Although the prospect of increasing rental values may seem attractive as an investor, it may not be so straightforward as landlords need to grapple with the process of potentially passing on increasing interest rates to struggling tenants,” Mr Esau said.
“Of course, there are also investors who will be significantly impacted by the increasing costs to service an investment property, but where banks are generally well structured to deal with clients in financial distress, individual landlords may not have that capability and may need to navigate chasing increasing returns and the human impact of a fast-paced rental market.”
Automobili Lamborghini and Babolat have expanded their collaboration with five new colourways for the ultra-exclusive BL.001 racket, limited to just 50 pieces worldwide.
As housing drives wealth and policy debate, the real risk is an economy hooked on growth without productivity to sustain it.
Strong consumer spending and tight supply have driven retail to the top of commercial property, but signs of pressure are starting to emerge.
2 min
Australia’s retail property sector entered 2026 as the strongest performing commercial asset class, but rising geopolitical risks and cost pressures are beginning to test its resilience, according to new research from Knight Frank.
The latest Australian Retail Review shows the sector rode a wave of consumer spending and constrained supply through 2025, delivering total returns of 9.2 per cent and driving transaction volumes up 43 per cent year-on-year to $14.4 billion.
That momentum carried into early 2026, with around $3.6 billion in deals recorded in the first quarter alone.
“Retail clearly emerged as the standout commercial property performer in 2025,” said Knight Frank Senior Economist, Research & Consulting Alistair Read.
“Improving household spending, limited new supply and stronger leasing fundamentals combined to drive better income growth and renewed investor confidence in the sector.”
Spending rebound drives retail strength
A lift in household spending has been central to the sector’s performance. Consumer spending rose 4.6 per cent year-on-year to February 2026, supported by easing inflation and improving real incomes.
That shift flowed directly into retailer performance, with average EBIT margins across major retailers rising to 8.9 per cent in the first half of 2026, their strongest level in several years.
“Stronger consumer spending was critical in restoring momentum to the retail sector,” Mr Read said.
“Retailers have generally been better able to absorb costs, rebuild margins and support sustainable rental outcomes, particularly in higher-quality centres.”
Improved trading conditions also pushed leasing spreads up 4.2 per cent in 2025, reinforcing income growth and supporting capital values.
Geopolitical tensions begin to bite
But the outlook has become more complicated. The report warns that escalating conflict in the Middle East and its impact on fuel prices, supply chains and interest rates could weigh heavily on consumer spending.
“Higher fuel prices, flow-on cost pressures across supply chains, and recent interest rate increases are collectively squeezing household budgets, and early consumer sentiment data suggests confidence is already softening,” Mr Read said.
“While household balance sheets remain generally resilient, heightened uncertainty over future costs is likely to weigh on spending — particularly in discretionary categories — in the months ahead.”
The impact is already being felt in investment activity. While the year began strongly, transaction volumes slowed in March as investors paused amid the uncertainty.
“Early indicators suggest elevated uncertainty has already begun to affect the market. While retail investment enjoyed its strongest start to a year in a decade, with nearly $3 billion transacted by the end of February, activity stalled in March, as investors took a pause amid elevated uncertainty,” Mr Read said.
Solid foundations support medium-term outlook
Despite the near-term headwinds, Knight Frank maintains that the sector’s underlying fundamentals remain strong. Limited new supply, high construction costs and population growth are expected to continue supporting rental growth over the medium term.
“Retail has entered this period of uncertainty from a position of strength,” Mr Read said.
“Supply-side constraints, population growth and improving income fundamentals remain powerful structural supports for the sector.”
The report highlights several trends shaping the year ahead, including steady yields as interest rates rise, mounting pressure on tenant margins, continued outperformance of prime centres, the growing need for logistics integration, and risks linked to underinvestment in capital expenditure.
For now, retail remains a sector with momentum, but one increasingly at the mercy of forces far beyond the shopping centre.
From Tokyo backstreets to quiet coastal towns and off-grid cabins, top executives reveal where they holiday and why stepping away makes the grind worthwhile.
A haven for hedge-fund titans and Hollywood grandees, Greenwich is one of the world’s most expensive residential enclaves, where eye-watering prices meet unapologetic grandeur.
