NSW When to buy in Sydney again

I am yet to buy my first investment property. I'm of the conservative side and would like to pay off a bit more of our PPOR before jumping in. I also somehow feel more comfortable buying where I live, in Sydney.
The market seems to be cooling down significantly at the moment. When do you think a good time to by will be again? In 3 years?

 

Personally I don't think it will be a good time to get into vanilla buy and hold IP's in Sydney for a GOOD 5 years, probably closer to 10 years.

Rates need to increase then fall a bit, lending needs to get a bit easier, yields need to increase substantially, vacancy needs to get tighter, prices need to cool off a little.

See you in mid 2020's.

 

'wannabuy' would have been a better avatar

 

Have you considered a purchase elsewhere?

 

You are asking a question that i dont think you will get a consensus.

further, you would want to buy at the right time in the cycle. Need to give sydney time to work through the cycle into upswing again.
How long till that happens? who knows, but id guess 5-6 years or maybe more.

 

When we see a good rise in rental prices.

 

You are wanting to reduce risk with a buy in Sydney but ironically by purchasing in Sydney where many markets are most likely at peak, you are actually increasing your overall risk, when compared to other markets in Australia.

 

1. When everyone is bagging Sydney (not out of envy)
2. When prospective tenants are out-bidding each other
3. When the rea's tell you that they'll put you on their list but can't promise anything
4. When landlords take good tenants to tribunal to kick them out so they can jack up the rent
5. When interest rates have gone up and everyone is in love with shares.

 

Would you still buy in Syd if it's your PPOR? Or rent and invest elsewhere. Renting for 5-10 years is a really long time..

 

When the yields are back. "Feeling Comfortable" should not be a criteria. That is being an emotional investor. You want to follow the cold hard numbers. No emotion. Then you can buy from a destroyed human being while asking, "What is this water coming from your eyes?"

 

Questions ...do you own in Greater Sydney?

 

theres no easy way to answer this as it's like predicting the future. however if the last boom is any indication then it would be 4-7 years. we brought our first ip in 2007, thats 3 years after the previous boom. only in 2012 there was upward movement in the price. The safest way is to buy when the market has bottomed and starting to make moderate gains. Combine that with improving economy fundamentals and a reasonable yield and you got a winning formula.

 

Between 5-7 years... in the meantime look elsewhere to maximise returns.

 

Sydney is massive - there'll be pockets that do very well even when the macro doesn't look so great.

In general though - may be a while if your expecting stellar returns.

 

very true, but low yield and high entry point make a very risky investment.

 

Agreed!

 

Here's a chart for the last 15 years CG for the Council of the City of Sydney.

Perhaps 2003-2008 was not a good time to be chasing CG or even 2010-2013 as these were both reasonably flat periods.............as for the future? We may be in for a period of easing. Hindsight is a beautiful thing!

 

in the mean time, the best way to predict the future is by using the past trends on a macro level e.g. market cycles, relationships of interstate migration with property price and job growth etc...

 

Shhhhhhhhhh, its much easier for the permanently bullish (with sometimes a vested interest in higher property prices) to deride negative forecasts as

a) impossible, as no one has a crystal ball
b) Indicate the author has 'missed out'
c) Written by Prof Keen
d) Imply an ulterior motive / agenda
e) Provide historical examples of all the times people thought mkt would decline, and it didn't.

Bear in mind, with the exception of Prof Keen reference... All the above behaviours are very familiar among different asset classes (not just property) and the signals they indicate will be telling for those with experience.

 

We're in a bit of an odd cycle - but I'd be wanting to sit on the sidelines to see affordability improve by sidewards movement + inflation. There may be some small price corrections but I don't see this happening in any reasonable amount compared to the stealth losses of inflation.

Plenty of other markets out there in Australia that I'd rather invest my money in which don't show the same 'top of the cycle' attributes, lower risk etc.