16 Greenwich Road has sold for
  • 16-room Sydney boarding house has sold at auction for $5.365 million
  • The investment proves particularly lucrative given Sydney's tight rental market
  • The sale price reflects an initial yield of 5.5%

A 16-room Sydney boarding house has changed hands with the property reaching a $5.365 million price tag at auction. The sale is the latest of three boarding houses to be transacted in Sydney by CBRE this year.

The property was fully leased at the point of sale, offering the new owners a secure income, particularly given Sydney’s tight rental market, as shown in the below SQM chart.


CBRE agent Toby Silk who brokered the sale with Angus Beevers and Nicholas Heaton believes the recent housing boom has played a role in the tightness of the market.

“Spurred by the housing boom, many investors have cashed out of their property assets and sold them to owner-occupiers, taking rental stock off the market,” Mr Silk said.

“There is now a huge shortage of rental stock, which is driving up rents and creating demand for boarding house assets.“

“This will only be exacerbated by rising migration in 2023 as the government increases the migration cap to help combat the current labour shortages. “

The boarding house is located in Greenwich on Sydney’s lower north shore. The property was built in 2014 and finished to a high standard, providing significant depreciation benefits and a low maintenance freehold investment for the new owner.

The sale price reflects an initial yield of 5.5%.

Interest in the sale was driven by the property’s location. It has close proximity to public transport and is in the health and education precinct of the lower north shore. Some tenants also enjoy views of the Sydney CBD and Harbour Bridge.

“These locations always attract strong rental demand for boarding rooms from doctors, nurses, teachers, students and patient families. Good walkability is also important with transport, shops, cafes and parks all within walking distance with most of the incumbent tenants not having a car,” Mr Silk said.

The two previous boarding house sales managed by CBRE sales both changed hands for close to $10 million.

Mr Silk noted that rising interest rates had impacted sale yields, with the first boarding house transaction negotiated in March – before the first rate rise – on a yield of 4.5%, followed by the second transaction in May on a yield of 4.8% ahead of the latest Greenwich deal, which was struck on a yield of 5.5%.

“This shows in real time the effect of rising interest rates on the property market and investors’ requirements for a higher yield to compensate for higher borrowing costs,” Mr Silk said.

“That being said, boarding houses continue to attract significant interest in the current market as they provide a hedge against inflation given the ability to adjust rents in real time.”

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