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Buying in Sydney

Discussion in 'General Property Chat' started by RSN83, 4th Dec, 2015.

  1. RSN83

    RSN83 Member

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    25th Nov, 2015
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    Location:
    NSW
    This may sound like a silly question for a newbie investor BUT if Sydney is such a consistent performer over the last 10-15 years (taking the consideration of the high amd lows of any property cycle), and your strategy is to buy and hold for CG why not buy into the market if you can?
    I only ask as I read these forums and most seem to have the opinion of don't touch it/wasting your time.
    This isn't to start an argument, just simply a query from a newbie investor :)
     
  2. Steven Ryan

    Steven Ryan Mortgage Broker Business Plus Member

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    Location:
    Sydney & Gold Coast
    Call me crazy, but I don't call highs and lows "consistent".

    :)

    If you average the numbers out, sure, the annualised rate of growth is reasonable but most of it happens in short bursts of a couple of years then there's nothing for the better part of a decade.

    So doesn't it make more sense to buy wherever in Australia you can catch a strong burst of growth, then take your newfound equity and move to the next place primed for a strong period of growth..and repeat?
     
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  3. larrylarry

    larrylarry Well-Known Member

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    The experienced investors here know when to enter and exit a market. They have a plan and not emotionally attached to a property. Numbers must stack up for them. At the moment, the entry prices are still very high in Sydney even though it's falling a bit in certain areas. Sydney's just started coming off the boil and by how much you have to keep an eye on the targeted markets. Some say you make money when you buy it.
     
  4. Gockie

    Gockie I'm an ISTP-A female, so I might be a bit quirky! Premium Member

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    Yep. Because you are better off putting your money in a market that will rise. I bought my first Sydney place in 2005 which was at the peak.... That property had next to no growth for the first 3 years, but I was still paying interest, rates, strata fees etc.

    If I had bought in 2008 it would have been about the same price, but 2009-10 was a boom, this property shot up roughly 30-40%, (I thank the end of the first home buyers grant for established property for some of that) and then again 2011-2012 got quiet. Sydney's been hugely booming 2013-mid 2015. The majority of us think there's little steam left in Sydney (you can't keep doing 15-20 odd percent YOY growth forever)...

    Since Sydney can't do that, we see the price differential to Brisbane is now huge and given that the growth in Brisbane as it has been quite suppressed for a long while since the floods its been creeping upwards slowly... we think its due for growth.

    So... my thought is that you might as well buy somewhere that will have easy capital growth... not stagnating... (or going backwards)... of course now there are some properties going for more reasonable prices, and some people say give it 6 months for prices to come down further.

    But definitely, Sydney's great in the long term if you buy a property that will be in demand (from buyers and renters) and won't eat you alive with fees (for example, some strata special levies... plumbing fixes, Lift replacements etc... can put a huge dent into your plans)..... and don't sell too soon... ride a boom... you'll do well.

    This is just my 2 cents...
     
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  5. JDP1

    JDP1 Well-Known Member

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    Likely you will either need to sell or pull out equity at some point. You will need it to rise for that.
     
    Gockie likes this.