NSW Buy old prop in established suburb or new prop in new suburb?

Discussion in 'Where to Buy' started by ms420, 25th May, 2019.

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  1. ms420

    ms420 Well-Known Member

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    To be precise I am comparing buying 35 year old property in Cherrybrook (2126) against buying a new H&L property in The Ponds (2769) or Kellyville (2155).

    The advantage of Cherrybrook is proximity to the CTHS high school but has the downside of additional costs to bring up a property to scratch which I estimate about 10% on a 1.3Mn property. Also given the established area there won’t be significant increase in new stock. A new H&L on a smaller block in The Ponds or Kellyville will not need upkeep but the property price may go down for some time and not appreciate much given a lot of stock in those areas.

    What are your thoughts on this dilemma. I completely understand moving away adds at least 2 hours of conmute time for the whole family coming to school or going to cbd for work. Thanks.
     
  2. Cate Bell

    Cate Bell Well-Known Member

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    I really like Cherrybrook- great schools, the train, nice neighbourhood, desirable. I would rather an old house in a great suburb than a new house in a less desirable suburb, especially if it adds that much time in travelling. Those new homes will still require updating in the future. Good luck
     
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  3. Gockie

    Gockie Life is good ☺️ Premium Member

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    I’d generally go for whichever is closer into the city and more conveniently located, people generally have to commute somewhere to go to work and if it’s not convenient, then you may hate your decision in the long run. And, as you mentioned, the land size in Cherrybrook could be larger than the new H&L properties. Big tick for established. For the majority of homes you can upgrade the house (knock down and rebuild) but you can never change the location.

    Established suburbs will tend to be more stable in case of recession because a fair proportion of the home owners will have little or no debt on their homes, so there will be little need for forced sales due to job losses. This is not true of new estates. If there’s a downturn, then a number of households in new estates may be forced into selling. Or if many home owners in new estates decide to rent out their properties, you’ll have a rental glut, with the tenants having the upper hand.

    Cherrybrook Tech is a popular school so if you decide to rent out a purchase you make there, you shouldn’t have any issues in securing good tenants.
     
    Last edited: 26th May, 2019
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  4. Trainee

    Trainee Well-Known Member

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    Probably harder to get high LVR loans for a renovation. On the other hand, H+L opens you to valuation risk at completion.

    The older house probably has a (much) bigger block. Like 300-400m outer v 600m+? Have you seen enough of these houses to understand the difference? Do you care?

    Are these properties similar in price? Outer house probably lower growth than inner house. But if the ponds place is less expensive, will you invest the difference?

    Most importantly, are you thinking with your head or your heart here? If your heart says you just want brand new, do it.
     
    Last edited: 25th May, 2019
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  5. Kushanda

    Kushanda Well-Known Member

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    I would go Cherrybrook if I could.
    Better area......closer to the city, good school nearby, U can renovate later if you need to......

    I would have never left Sydney if I could afford Cherrybrook back then :) :)
     
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  6. standtall

    standtall Well-Known Member

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    Is this a 3 bedroom property or powerlines affected given $1.3m price?

    There are many reason Cherrybrook is 40-50% more expensive than outer suburbs you mentioned but you will have to compromise a lot on the house in the $1.3m range while this budget would get you in the top end of market in fringe suburbs.
     
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  7. ms420

    ms420 Well-Known Member

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    Thanks all for your responses which has given some food for thought. I will add a little bit more and answer some points raised:

    Cherrybrook:
    Pros:
    • Proximity to school is key for another 5 years but after that there is no reason to stay here when kids go to Uni
    • Good white collar neighbours and peaceful. Lived here for 5 years and can’t complain
    • No big increase in property stock so property will be in demand
    • New station is positive. Yet to have feeder buses for connecting to station from different parts of the suburb

    Cons:
    • Older properties requiring maintenance
    • The price range of $1.3Mn that I mentioned is max I may be able to borrow and willing to pay even after market correction and rate changes
    • At this price may be able to buy a battle-axe property or one that is 1-2 Kms from school or a very good townhouse unless there are more price falls

    Kellyville/ The Ponds:
    Pros:
    • I and my family have never lived in a new house. This will emotionally be a good thing and will require little maintenance at least for 5-10 years. We may downsize in future but never live in a new house after that.
    • Builders like Allam are offering rebates of about $100K. If markets get worse, they may even pay stamp duty
    • If I can get 450sqm new property for about $1.1Mn financially less burden than owing $1.3-$1.5Mn
    • Train station

    Cons:
    • Property value may go down or sideways and not make financial sense given huge supply and expanding suburbs
    • kids and parents will have to commute to school/ work for a lower financial burden
    • Location is far from city but connected by train and motorway (a bit of drive to it)
    • Lots of investor properties or people pushed out from the city may have bought here. So if things go south there may be a big sell off in addition new H&L or plots
     
  8. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    With some lenders yes, with most lenders all things being equal, and having valuer support for the end product ( usually the killer) , reno or even KDR loans can be got to 95 % lvr with lmi inclusive

    ta
    rolf
     
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  9. The Y-man

    The Y-man Moderator Staff Member

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    Home is where the heart is - sounds like you want it, so do it.

    Just keep in mind new builds can also come with a litany of little issues so be ready for it.

    The Y-man
     
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  10. David Xu

    David Xu New Member

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    Hi ms240

    You are a very detailed person. From my understanding, your decision will also be based on your finance circumstance after the purchase.

    1. Based on what you set the budget at 1.3M ?
    2. How much cash left over after you made the purchase at 1.3M in cherrybrook VS 1.1m in kellyville or the pond?
    3. what's the monthly repayment between the two options? Will you still be in a sound cash flow position after the purchase? if it's tight, how tight? can you still manage it to live a good quality life?
    4. what if you saw a property you really like but it's 1.35-1.4M? Do you still have the room for it (Borrowing capacity)? if so, go back to question 3
    The reasons those questions are important is because:

    1. after election, buyer's confidence level is high, you probably saw more people this Sat then it was.
    2. 1.3M in Cherrybrook is ok, but there are better and more properties around 1.4-1.5M price range
    3. I've seen many of my clients live in kellyville or Rouse Hill, you will get used to the transport eventually, so that is not a problem
    4. i would look at this from finance perspective
    Finally, rate changed in the past few weeks, if your pre-approval is with CBA, NAB, ANZ, WBC, you will need to revise the offer, because they are not in a good position now.

    Good luck!
    David
     
    Last edited by a moderator: 27th May, 2019
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  11. Angel

    Angel Well-Known Member

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    Here's another perspective.
    Say you and the Mrs buy the cheaper property out at Kellyville and you spend thousands more $$$ and time commuting. After five years, that $1.3m at Cherrybrook doesn't seem to cost much more after all.
     
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  12. diksy

    diksy Well-Known Member

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    No brainer buying in Cherrybrook.

    On a daily basis, there is substantial time, energy and cost differential living in Cherrybrook vs say ponds/Kellyville. It all adds up when few of you have to do it daily !

    Plus new developments in my opinion are not that great investment given supply and developers have deeper pocket to discount if things do go downward.

    Plus $/sqm you are doing a much better buy in Cherrybrook vs other suburbs.

    Good luck !
     
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  13. Joynz

    Joynz Well-Known Member

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    I don’t live in Sydney - but 2 hours commute time! You’ll never get that time away from your loved ones back.

    No one ever said ‘I wish I’d spent more time commuting’. Isn’t family time together more important than a new house?
     
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  14. ms420

    ms420 Well-Known Member

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    Agreed. Most parents and kids do the commute so they can live where they can afford.
     
  15. sumterrence

    sumterrence Well-Known Member

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    Actually The Ponds and Rouse Hill is pretty desirable too with majority of the owners being young Aussie verses in Cheerybrook most owners are older aussies or cashed up Chinese.

    Commute times I think with the new metro station being up and running now you shouldn't be spending 2 hours.

    I was in the same dilemma as you before but I decided to live further out north west for better life style (less traffic and people) and to me a bit more bang for bucks given for the same money if I live closer to the city I can only live in a townhouse at best which also not within walking distance to station verses a house with a backyard further out.

    Travel time was also ironic as I travel mostly via highway to the city which doesn't take long at all. If you live close to the city the traffic is so congested you're just going to end up spending just as much time as you live further away.
     
  16. wombat777

    wombat777 Well-Known Member

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    On a Capital and Income Growth Safari
    ... and more and more Rouse Hill is become a unique and importantly walkable destination suburb. Think Chatswood but designed with an urban environment that is more pedestrian friendly. It's set to grow over 15 years and large-scale.



    See also:
    • Rouse Hill [NSW]
    • (the large-scale development in the above post will play out over 15 years)
    The best opportunities for investment at the moment are the detached housing sites at Tallawong or alternatively the area adjacent to the Rouse Hill Town Centre that was developed from 2008 ( most of the latter has been built out and there will be no more detached housing in this zone ... other than a small pocket at the corner of Caddies Boulevard and Commercial Road adjacent to the Duck Pond ). The opening of the metro has set a floor for pricing in these areas. There's limited opportunity to get housing within a 10-15 minute walk of the train stations.

    See: Northwest Metro Capital Growth Zones (1.5km radius) [NSW]
     
  17. diksy

    diksy Well-Known Member

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    No change to ponds as people were already accessing train through schofields station.

    Rouse hill is different and agree there is potential opportunity there but it’s not as open / green / spacious as Cherrybrook and unfortunately you won’t get as good bang for buck as in ponds area.

    My 2 very close mate live in pond so looked at it very closely. The other thing is temperature different between Cherrybrook and ponds is easy 4-5 degrees and when it is cold it is **** cold there and in summer you cannot really thinking of walking or getting out till late evening.

    One of my mate is thinking of selling his place to move to Cherrybrook