About to spend a lot of money

A PPOR is a place where you want to live, be with your family, be close to friends/community, feel the security of your own house. In Sydney's market today, $1.1m for a 4bedder townhouse is quite the norm, it looks like it will suit you and you're family and you will have a nice new home, without having to worry about renovations and the like.

You've made your money on Wolli Creek, sell up, take the money, put it into your new place and have a more modest mortgage you can afford. With the equity in your new place, you can always access that to buy future investment properties.

Enjoy your life, you have time on your side, including the new place.

A lot of people often get stuck pondering many scenarios but the number one thing is to be happy where you are at in your life, and for most having a nice home, having that security, with your family (and having plenty of equity in there) is a very good feeling, and also a foundation for future investment. So just do it.

 

500k gets you a house on 800sqm about 10kms from the city in Canberra. Low unemployment, high wages and excellent public schools

I don't understand how people see value in properties like the one the OP mentioned (especially for the price). Can't you get an actual house in Lakemba for less than that?

If you really wanted to spend a million (random examples)
213 Addison Road, Marrickville, NSW 2204 - Property Details
6 Prospect Street, Newtown, NSW 2042 - Property Details
30 Lilydale Street, Marrickville, NSW 2204 - Property Details
16 Pearl Street, Newtown, NSW 2042 - Property Details

 

Thank you this was where I was at before I over thought it all. As long as the market doesn't drastically change in the next 12 months it should work out well

 

Hope is not an investment strategy

 

The family home is not an investment strategy.

 

I understand that but if you're buying at the likely very top of the market, you'd want to make sure that there is some fundamentals in place to at least maintain the value of your purchase (even if you don't care about capital gains per se) which the OP themselves stated was a consideration. Given that older comparable properties in the same location have a 30% discount, I'd say it's a valid concern and not "overthinking" by any stretch of the imagination. That is pretty much half of the CG they've achieved so far. Very few people want to lose that kind of money even on their family home

 

It has to be - unless you have substantial other means.

 

No worries @fobo. One of my reasons for becoming active on this forum is to relay insight from experience. I'm having a rant from here.

I look at my own property experience compared to some others, over the years I've bought and sold, done some development and renovations, always have made a bit of money on the way. However, my friends who over the same period of time, who just bought their family houses, in Sydney and did no other property investment, have realised massive equity gains and paid off their houses during that same period of time from the 90s / early 00s until now. Some examples, a friend who bought a flat in Bondi for around $70K, 30 years ago and still got it, a friend who bought a $1m house in the last Sydney peak early naughties and still got it (now $2.6m), another who bought for $800K ten years ago, and more than double (still got it), others in the mid 90s for $240K, now $2m (still got it), they have made as much or more equity gains than all my "wheeling and dealing". If only I had kept my original 2 Sydney properties when purchased in the 90s!

So what I'm saying, if buying a PPOR, and you are going to be there for a long time, and you have a focus of paying down your mortgage, the market may go up/down/sideways, but it doesn't matter if you take the long term view because time "heals all wounds", and then when you have available equity, it can be used for other investments.

Looking back now, I would have been better off to have bought one property with the aim of paying down a portion of the loan, and then leveraging off that to develop a portfolio than "buying/selling/rent-vesting". If you see my other posts on rent-vesting, note that I'm not knocking it because it is a very valid strategy to get started in property investment, but the day you want to own your own PPOR then everything changes in terms of strategy. Hence, having a good PPOR as a foundation first and then building your investments from there is the way to go. Not only that, also provides a place to live and a degree of stability for your family - nothing wrong with that.

 

I'm not sure how those experiences are really applicable to the OP.

You're advising the OP to buy a property for a price that is already significantly higher than comparables (and that's including actual detached houses) and that's without going into all the other risks of OTP purchases such as contract terms, build quality, what you get compared to what was promised, etc etc.

As soon as the OP moves into the townhouse, their property also becomes "old" and valued accordingly (see first example below), especially once other developers continue to build more OTP developments in that area and buyers similar to the OP continue to pay a premium for "brand new". The only person making money in these scenarios is the developer.

Newly built 4 bedroom, 3 bath townhouse - $950k
8/112 Karne Street, Roselands, NSW 2196 - Property Details

Completely renovated 3 bedroom house on 500sqm block - $1.08 million
36 Belemba Avenue, Roselands, NSW 2196 - Property Details

TWO three bedroom properties on a 600sqm block - $1.1million
24 Sylvester Avenue, Roselands, NSW 2196 - Property Details

(I would choose the second one personally )

And there were some older properties cheaper than the above. I'm the kind of person who tends to get attached to homes I like and even I see no value proposition in what the OP is intending to do.

 

I've had a look at the first one in person. It's not as nice , no real outside area , no private garage , a lot more common wall

The problem with the houses are that I'm at my limit already . I have two friends building now , they're looking at 500,000+ building costs . Plus they have no where to live.

I can pay this down quite comfortably and buy and investment in a couple years. Im not a builder and have no interest in renovating on my own

 

Over time the stress and guesswork falls behind you in property investments just all bumps in the road if you live long enough when you see noble dreams turn to grim reality,and there are several other ways to turn 20cents into a dollar..

 

What's wrong with something like the second link I posted? It's pretty much completely renovated. You could get it repainted or something but it doesn't look like it needs too much else to me. Maybe have a chat to one of the buyer's agents on this forum if you think you could do with some help to find something specific.

 

Nothing obvious . Going through all the sold properties in the area though it's a bit of an outlier

The only thing I can see is that it's on the border of lakemba and it mentions a shared drive way in the ad and shows 0 for parking .

Just always seems to be a catch when something is cheaper than the rest

How would anyone help find something better ? I've spent hours online now

 

Buyer's agents can often help you find properties that aren't advertised or negotiate with the agent to get a good price etc. @Jacque on these forums for example is a buyer's agent but I'm not sure if she works in the area you're looking at. She may be able to refer you to someone who does

 

Speak for yourself. This old bugger has.

I am alive, I have a memory and I have been investing in property for nearly 40 years.

I have seen multiple corrections in the property market, I have been invested while interest rates have ranged from under 3% to over 17%, I have invested in shares when stock markets have crashed, ...

I remember it all.

 

with properties, there is a period of slowdown and stagnation but no large correction, maybe 10% and stagnation and it relative short live as
I remember

 

May I suggest visiting Darwin or Perth?

 

Or Mackay or Townsville currently or Cairns in 2011.

 

Top marks for the stereotyping and generalisation. By that reasoning much of Western Sydney isn't fit to raise a family in

 

Ever bought in Moranbah?