As an investor would you buy in sydney at current valuations?

Yep, I am wanted everywhere, mainly by young to middle women .

 

Yes, as I thought. I leave you guys alone for a few hours and you derail the thread.

 

It is all @Sackie’s fault .

 

Back to the Sydney market, I thought I'd have a bit of a look at whats around this weekend, but surprised by the lack of decent stock and can't find anything worthwhile to throw my money at..

 

Is it just me or do others also find a lot of banter amongst a few, a bit over the top and derailing good discussions? I don't mind a bit of light-hearted comment or two to add a bit of fun but reading dozens of annoying one liners with no relation to the topic on the thread appear as annoying distraction.

Appreciate the valuable feedback from these very regular posters on all things property and I am sure others find that too but it might be a lot more valuable for everyone if some of the useless banter could be reduced or goes in non-property discussion part of the forum.

Thank you

 

Now you’re derailing this thread, straight after @Mel Morgan got it back on track .

 

Yep I’m finding this too. Looking around Ermington/Rydalmere/Dundas, feel like I’d be settling if I bought anything. Looking for a PPOR and don’t have a huge budget but it’s only a little lower than the average sale price and there’s just not much to look at. Hoping there will be more on the market when spring rolls around.

 

It’s like a Mexican stand off at the moment!

Volumes down 30% from average. Only 124 properties sold via auction across Sydney last weekend...

Sellers are waiting for prices to recover and buyers are waiting for sellers to drop prices....

The extra borrowing capacity and interest rate cuts should have freed up market, but it hasn’t ... FONGO will be even stronger as global recession picks up.

 

I would have thought there'd be more stock with small/med development potential..where's the firesales?

 

Developers small and large (Meriton etc) have confirmed they are holding back stock so as to not depress values in the hope that prices stop falling....

Give it another 6–12 months of price stagnation and a global hiccup and these guys won’t be able to hold on and you’ll get more fire sales

 

Meriton is considered large...show us some firesales of small/medium development sites...or finished projects that are firesale...

Waiting.

 

Hmm speedometer, in your haste to reply you did not notice that Meriton was the large example although I could have used Lendlease etc any of the big boys... try and keep up champ

Have you managed to offload the properties you bought at peak in 2016 yet? Waiting...

 

Why would anyone buy property in 2016 and sell after 3 years even if they bought at the peak? Unless they can't afford to service their loan, they have absolutely no need to sell. Property is not a stock, it's a long term game.

 

Hmm what about mining town properties, are they also a ‘long term game”...

It’s always been a joke to tell clients who are losing money, ‘don’t worry, just focus on the long term!’

 

Overall I think Sydney & Melbourne is an opportunity playground for smart investors now.

One of the most developed & desirable cities in the world is going through rapid change. It has one of the world's strongest developed economy population growth rates, a transformational infrastructure investment program underway and requires mass infill development in inner regions over the next 30-40 years to support this growth (as context, every single resident in Brisbane and Adelaide will need to fit into Sydney during my working life). It's also benefits from Australia's institutional structures that provide a lot of stability overall relative to the world. With rates so low, a lot of Sydney can be neutrally geared again now.

Combine all of the above - if you can't find value opportunities in Sydney, IMO, you simply don't know where to look. This includes me, I'm no expert on hotspot investing! Nonetheless i recognise that if I cant find something, its not because it doesn't exist, its because I cant see it.

Also in general, if investors are asking this particular question, I think they're probably going about investing the wrong way for Sydney. If you're an investor just looking for value in a city, your probably best looking at other cities like Brisbane or Adelaide or Perth. There's probably more 'value' there (lower risk & higher upside).

 

I've got a close friend whom is a REA. He told me to hold off looking/buying at the moment because there just isn't enough stock available and prices are inflated. He is very surprised of all the action in the last 2 months. He is selling about 2-3 a week at the moment even though stock is low, about half what he would consider normal.

 

The definition of a Strawman right there

 

Why- because it kills your argument?

You don’t think people who invested in mining towns weren’t told it was a long term investment when it dropped 10, 20, 40% etc?

 

Out of tens and tens of markets in OZ, you picked mining towns, hence your strawman argument. An no it doesn't kill my argument. Property is a long term investment vehicle , at least for the average investor.

Do you think that those properties bought say in Sydney/Brisbane/Geelong/Hobart... at the peak around 2016-2017 will be 20% 30% 40% down in the next say 5 years? Good luck to you if that's the case.

 

I think I basically agree with your long-term thesis around Sydney (whether that leads to strong, real capital growth isn't clear with current high valuations). But the risk over the next 5 years looks excessive to me.

How worried are you by the vacancy rate increasing (3.3% now compared to 2.4% a year ago and 1.7% two years ago) and rents dropping? Or the IO to PI cliff coming up (lots of people who bought 2016-2017 will roll over with negative equity so no good options if they can't afford the increased repayments)?