NSW Buy now in Sydney or in 3-6 months?

Hi all, just joined.

Not sure exactly where in this forum to post this, but here it goes.

I'm in my late 30s, married and have a 5 year old.

We're in the market for our long term, 3 bedroom home in the Upper North. Have been looking at 3-bedroom apartments in the Pymble/Gordon/Killara/Lindfield area.

Budget is 1.3M for a 3-bedroom apartment in a secure modern development with 2 bathrooms, and 2 car spaces, which go for around 1.3M-1.6M depending on size/location etc. So my budget is in the lower end of the range for what I'm looking for.

If we sell a 2-bedroom apartment we own in the Inner West, we can spend up to 1.7M and then would be looking at 3-bedroom freestanding house in St Ives area.

I've read that there's already something like a 5% drop in the asking price of Sydney properties with the COVID-19 pandemic causing some ripples.

Logic tells me that with the global economy stalling, key industries in Australia such as retail/ tourism/ service taking a huge hit, the prices should drop further.

So I'm strongly leaning towards waiting a while to buy, but question is for how long? There's talk of lack of listings putting a floor on the declines, but to me I think we could be at the start of a long recession.

Any thoughts? Much appreciated.

 

Why not keep looking, get your finances in order, and be in a strong position to make a low offer on a property you want, and would be okay with the offer not being accepted as prices might fall further?

 

Thanks I have recently obtained pre-approval, valid for 3 months and can be extended by another 3.

We have started inspecting, but so far the guide price has been at least 200K more than the offer we would make, so haven't actually made any offers.

 

what have the properties actually sold for? Around the price guide? Or what you would offer?

Neither the price guide nor what you would offer means anything. What is the seller going to accept?

 

Price guide from the selling agent?

You would be better to search sold listings on Domain for comparable properties to get a better idea of what the property is worth.

Be wary that body corporate fees can have an impact on prices also, alot of amenities (pool/gym/elevators) will all impact final prices.

On the same vein as BC fees, make sure you check the sinking fund and 10yr maintenance schedule, if these are low that could mean you are up for a rude shock after you've bought with special levies etc.

If you are looking at apartments be wary of the recent opal towers debacle and others like it as well.

 

The asking price/guide is on par with, or slightly above what other similar properties have sold for in the past 6 months.

At this moment in time I feel like the sellers are trying to squeeze in just before the price drops really bite hard. They'd probably laugh if I made an offer 200K below the guide, but who knows maybe in 6 months they'd wish they'd taken it. No way they'd take it now.

 

They can laugh all they want, make sure you put an expiry on any offer as well, maybe a week? Don't want them to think they cam keep stringing you along till they find a higher offer.

 

Yeah my first ever property was a 2 bedroom apartment in Westmead, with 2 tennis courts, an outdoor swimming pool, well equipped gym, and landscaped gardens, and a garbage chute. I paid $1200 per quarter on strata fees from memory, in 2014.

I inspected this apartment last year (wasn't ready to buy then, but we do like to inspect as a weekend hobby): https://www.realestate.com.au/property/unit-24-29-lorne-ave-killara-nsw-2071

As far as apartments go that property would be close to my dream home, but strata fee was close to 3K per quarter. Crazy if you ask me, with zero facilities. To pay 12K in strata fees annually, I have to make about 17K pre-tax. Ridiculous - some strata manager out there is driving a Porsche and laughing.

I wouldn't pay any more than $1200 per quarter on strata fees on an apartment with zero facilities, and lately that is becoming hard. Maybe I should be looking at free standing houses after all.

 

Not a bad strategy, but from my experience of having bought a few properties and sold one, a very low ball offer goes nowhere but gifts the property to the next buyer who offers a bit more.. but maybe in a few months it'll get me a bargain.

 

I donr know much about apartment buying apartments in Sydney to be able to advise which is best, but you will have to weigh up ongoing value, costs, etc to see how much each will cost over an extended period of time, 10 years? Might mean better to outlay the money for freestanding now, as the land component appreciates.

 

You can only offer what you are happy to pay, if they don't accept it and you walk away, it will be no skin off your nose.

 

That is my main concern with paying 1.3M+ for an apartment - whether it will still be desirable in 10-15 years, or even 20+ years. A lot of them are built cheaply by foreign developers who could go bankrupt any minute.

However apartment living usually offers more modern living, better security, anonymity (no nosy neighbours), and convenience (many within walking distance from a train station - I drive to work but do enjoy a day out in the city on weekends).

An old house with ageing fittings/kitchen/bathroom would depress me, and renovation is costly and a pain..

 

Even modern properties become aged at some point requiring a renovation. If this is a long term property you will most likely need to renovate again at some point anyway.

 

Similar position, looking more on lower north shore and haven't seen any bargains. Sellers/agents still think they can get peak prices...
Im in 2 minds, either there is a quick recovery and prices could bounce or covid drags on and prices drop

 

Yeah sellers are still in a state of denial. They are hoping the whole thing will be a storm in a teacup, and things will go back to normal in a few months.

Like what most people are predicting, I think it will take 3-6 months for the new reality to sink in.

 

I think there aren’t too many desperate sellers in Sydney.
Anybody who has owned their properties a few years has a lot of equity, and already had the opportunity to sell.
Nearly everybody who has lost a job can put their mortgage repayments on hold.
Maybe there’s a few deceased estates.

I think it will be a while till any really distressed sellers are seen.

 

Gockie - your signature. "3 cheers to the BUSHFIRES for scaring tourists from coming to OZ, thus minimising local COVID cases". Wow. That's really poor in my opinion.

Those fires devastated so many lives and so many communities across the entire country, and caused just as much health and economic pain to families and businesses in those areas as COVID is doing now. I suspect many communities would take great offence to it.

No. I will not be giving three cheers to bushfires. That's just so wrong on so many levels. You really should remove it.

 

Done.

 

I wonder what is driving that cost. It looks like a new building so there is a risk of elevated fees - unnecessary building managers, poor value contracts, lift etc. Probably unlikely to be a fully funded sinking fund.

 

I have been keeping an eye in the area and apartments have dropped in price slighly and freestanding not so much. The ones that have dropped slightly are either very old and/or far from station.

I did inspect the one at lorne ave and the strata is too high for an apartment with 2 lifts? and no facilities. To give context, that is nearly what y ou would pay for a 2-3 bedder in the CBD with full security and facilities. A 2 bedder sold a few weeks ago for $1.18. It is a 10 year old building but when I inspected, I heard something about cladding so not sure if it was to replace.