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Investors continue to generate strong returns

By Louise Morrin

There are many good reasons why people choose to invest in real estate in Carlton, not least because the area's proximity to central Sydney gives it real potential. The latest Pain and Gain report from CoreLogic RP Data shows that the city's popularity is unlikely to wane anytime soon, especially with investment returns outstripping the rest of the country.

In fact, during the first three months of the year, only 2.4 per cent of homes in Sydney sold at a loss. This marks a 3.1 per cent reduction from 12 months earlier, revealing that there is plenty of room for optimism at the moment.

Further data shows that 11.3 per cent of properties were sold on with a profit of between 10 and 25 per cent. However, investors could find themselves able to enter the market with even higher expectations, as 32.3 per cent of properties in Sydney have been sold with a profit of 100 per cent or more.

The report also offered some insight into the type of properties that investors might want to take a closer look at. In the first three months of the year, just 7.7 per cent of houses across the country sold for less than their initial purchase price. This compared to 12.5 per cent of units.

In the nation's capitals, 5.2 per cent of houses were resold at a loss, whereas 8.1 per cent of unit sales failed to generate a profit.

With potential returns so strong in Sydney at the moment, it's perhaps hardly surprising that the city has witnessed a decline in stock levels over recent months. The latest figures from SQM Research show that in May, the number of listings were down 14.5 per cent from a year earlier.

However, compared to April levels there had been an increase of 11.8 per cent, suggesting that there could be some month-on-month fluctuations in the market.

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