B Invested

How Much Equity Have I Made This Year

A couple of months back, b Invested founder Nathan Birch was having a conversation with someone who had been looking to buy in Sydney’s north west but was dismayed to find asking prices there had increased significantly in the last couple of years. For Nathan’s friend, there was nothing left in his price range.

After hanging up the phone, Nathan realised he owned a number of investment properties in that area and hadn’t checked up on them for a while. After looking at his portfolio spreadsheets, he realised he’d likely made millions in equity this year.

All this time, he’d been busy and hadn’t had time to get across all his equity movements in recent months.

His windfall in added value was a pleasant surprise. And while not many people are likely to have made as much equity as Nathan this year (unless you also have 220 properties), this story shows it is always worthwhile to check in and see what your portfolio has been able to do for you. A lot of people live busy lives and the year tends to fly by, but in Covid times, a year can mean 20% or more in added value for a property, so it’s possible that you’ve hit dirt somewhere.

So how much equity have I made?

If you own property in Sydney, CoreLogic data shows the greater Sydney area has had 22.8% growth in the calendar year to date so far.

Not many investors will get a lot out of the median for the greater Sydney area, so by using REA data to drill down a little bit, we can get some specific examples of growth for different regions.

Most b Invested readers would be aligned with Nathan’s strategy of buying in affordable areas with good cashflow and upside for growth, so let’s look at a couple of his bread and butter markets.

Head for the Hills

The Baulkham Hills and Hills District region is a good example. Over 12 months, suburbs in this region have enjoyed an average growth of 26%, to leave the median now sitting at $1.429 million.

This means that you have earned an average of around $300,000 in equity this year, for every property you own in that area.

Another of Nathan’s go-to zones from way back when is over in the nearby Blacktown region.

More affordable than Hills District markets, Blacktown has still seen 14% growth to end the 12 months with a median of $789,000. This would have been unheard of not that long ago.

So each of your properties in this area would have earned you close to $100,000 in just the last year. Many investors who bought in that area more than 10 years ago would have seen enough growth in the past year to cover what they still owe on those properties!

Town and country

A number of investors in recent times have put their city equity to use investing in regional areas.

If you owned properties on the central coast for example, you have made an average of 23% over the past year, or more than $200,000 per property.

If you invested in the Newcastle and Lake Macquarie region, you’ve made just over $100,000 per property. Meanwhile, the booming Mid North Coast has averaged 18% growth over the past year. Got an investment property in Port Macquarie? You’ve just earned $100,000.

Further North

What has happened in recent years in NSW is still underway in Queensland and especially in the southeast, where a lot of investors have got some assets.

Already, parts of the Gold Coast and Ipswich have seen growth of between 80 and 90%, which are on the way to a doubling of your money. So if you have a unit or house up there, better check in on the value. You may have just made enough equity for a deposit on your next investment. And if you need help getting started, reach out to b Invested.