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NSW Buying property in Cherrybrook, Sydney

Discussion in 'Where to Buy' started by ms420, 3rd Nov, 2015.

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  1. ms420

    ms420 Active Member

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    Friends,

    Having come to Australia and Cherrybrook 2 yrs ago, I have seen the prices skyrocket in this period while there seems a bit slow down in the last 3 months. While a newly built independent house was sold for $1Mn in Dec 2013 raised brows, a townhouse selling for $1.1Mn today doesn't even make get a reaction from people in a conversation.

    How much correction should one expect in the next 1year? While the optimists say, it will just slow down a bit and keep going higher, the pessimistic part of me fails to believe the theory of the bigger fool and that price for a $1.3 Mn independent battle axe property will appreciate to 2Mn in 5 years doesn't seem to make sense.

    Appreciate thoughts from investors and property owners in the area (particularly around 1km from the Cherrybrook Technology High School). While there is little scope for re-zoning and hence there could still be a supply-demand gap and the new train station which will drive prices, do you expect the prices to appreciate 50% in a 5 years from the current rates?

    Thanks
     
  2. spludgey

    spludgey Well-Known Member

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    I think prices will definitely decrease less than 10% and it will hover around the same mark for the next five years or so.
     
  3. euro73

    euro73 Well-Known Member Business Member

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    I believe Sydney is in for an extended period of ...well, not much. Particularly true now that borrowing capacity has been dampened by APRA.

    The exceptions may be inner west , where access to 15 minute CBD commutes will always be attractive, and some beach side areas, which like the inner west will always be attractive to Sydneysiders.

    But for the most part, without ever incresing access to money, Sydney's speculative frothy prices have already demonstrably ceased, and the market has had several months of declining auction clearance rates and prices are clearly stalled. Not correcting downwards...just not climbing.

    Cherrybrook, Castle Hill, West Pennant Hills etc, have enjoyed an unbelievable 2 - 3 years, but I think the NW Rail Link has been pretty much fully priced in already. Might see a little boost when the link opens, but while APRA continues to regulate the amount of credit available, and with more rate rises to come across 2016 and 17 through the additional capital raising that all the banks will have to undertake for BASEL IV regulatory adjustments, I think it's going to be a good few years at least before Sydney gets up a head of steam again.

    For the first time in almost 30 years , since deregulation in fact - rates are ultra low, LVR's have nowhere to go , income growth is flat, and borrowing capacity has nowhere to go. Australia, and Sydney in particular - needs to go through a prolonged period of deleveraging in order for the ducks to line up for another boom. And that will take some time.
     
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  4. Gockie

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

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  5. spludgey

    spludgey Well-Known Member

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  6. ms420

    ms420 Active Member

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    Are you suggesting that there will be buying opportunity in 2016-17 after the prices come down about 10% as @spludgey has guessed?

    I too am hoping that even with the increase in interest rates the monthly repayment will only be marginally affected compared to borrowing additional 10% loan at current prices.
     
  7. euro73

    euro73 Well-Known Member Business Member

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    Im suggesting there wont be much growth for many years, as rates have bottomed and funding costs will rise... That, combined with credit regulation, equates to limited growth for a number of years in Sydney. ( except for the inner west and beaches as I posted previously - they may do OK) Im not suggesting a correction... at least not a big one.
     
  8. Jacque

    Jacque Buyers Agent and Bookworm, Sydney Business Member

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    I live and work in the Hills- the Syd Metro has definitely had an impact, however, along with the rest of Sydney, other factors have certainly contributed to the boom in the last 3 years. Agree with Euro73 in that I believe we're in for a period of plateauing prices across many suburbs of Sydney though again this will very much depend on demand vs supply and a range of other factors that traditionally drive our property market: IRs, affordability, foreign interest, monetary policy and govt intervention, consumer confidence. Prior to the metro opening I do believe there will be a boost in growth, though only time will tell as we are still just under 4 years away....

    In regards to Cherrybrook specifically, if you observe the median prices of similar suburbs on existing train lines (Wahroonga is a good NS equivalent though I'm sure some may disagree on this forum :p) I believe this is a good indication of where the future Hills station suburbs are headed. Current house median in Cherrybrook is $1.38m (with entry level buying $1.2m+) whilst Wahroonga is $1.55m (with entry $1.3m+) Cherrybrook housing has seen 64% cg since 2013 with Wahroonga reaching 48% during the same period. Don't forget, however, that the higher rates for the Hills suburbs can be attributed to higher priced developer blocks at the pointy end of price transactions. There have been several multi-million dollar deals done in these areas, which skew the statistics upwards obviously.

    50% cg in 5 years is pretty ambitious and unlikely, given we are coming off a mother of a boom. If you observe post-boom growth patterns (though again every boom is driven by a range of differing factors and generally not solely replicated by demand/supply) between 2006-10 for example, many suburbs in Sydney achieved anywhere between 20-30% cg during this period. Affordability also plays a huge factor, hence why mortgage stress is going to impact those suburbs where the demographics dictate who can least afford to keep their properties when IRs increase and times get tougher. Don't forget that not all properties are owned by investors :rolleyes:
     
  9. spludgey

    spludgey Well-Known Member

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    I'll be one of the people to disagree. Cherrybrook doesn't quite have the same pull as Wahroonga. It's nice enough, but it doesn't have the estates or countless Porsche Cayennes that Wahroonga does.

    Since the prices are medians not means, it doesn't really make that much difference. I would assume that the numbers of developer blocks is still low when compared to the number of total sales, right?
     
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  10. Travelbug

    Travelbug Well-Known Member

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    Yay! And it's their first year. We are very proud of them (and their amazing teacher).
    The thing that may make a difference is the fact that people pay extra in order to get into Cherrybrook Tech. Things are tightening up there due to an increase in numbers in the feeder primary schools also, which will impact on the numbers the high school can take. I can't see more increases anytime in the near future. I think drops won't be huge though.
     
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  11. Gockie

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

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    The girls are in the paper again today!
    12238427_10153597079920673_8066529107943446449_o.jpg
     
  12. Gockie

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

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    Niece just won the National Cheerleading championships with her classmates again. Talented kiddos. :)
    This is her last year of primary school so I don't know what will happen next year...
    14753867_10154500308377936_6631945588903036647_o.jpg
     
  13. sash

    sash Well-Known Member

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    Parts of Cherrybrook have increased a lot...for example my cousin bought for $850k 4 years ago...now it is well over 1.3m.

    This cannot be sustained....for a couple of reasons....the banks are tightening lending...and the cycle in that particular suburb has priced in the new infrastructure. However, that is not to say in the next 10-12 years...it can't go to $2m.
     
  14. LaoBan

    LaoBan Active Member

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    Looking at the median price from when this thread started (Nov 2015) to today, Cherrybrook median house prices increased 70-100k in a year.. hardly any correction.. :=(

    I am planning to buy a townhouse in Cherrybrook in a year or two (1M budget), which initially be an IP for 5-7 years (to help with interest repayments of such a large loan via tax deductibility), then move to the property when my kid goes to high school (yes, so that my kid can enter Cherrybrook Tech HS..).

    What's the general consensus buying in Cherrybrook in short term (1-2 years)?

    People said the prices now already factored in the Metro Rail, but would the price be even higher once it's actually opened?
    I noticed that was what happened in e.g. Dulwich Hill in 2014 when the Light Rail Extension opened. But of course, that could also be because it was in the middle of the boom - nothing to do with the opening of the extension (?).
    I heard that the Metro is actually ahead of schedule and may be opening in 2018, not sure if true or not..

    I just want to ensure I can secure a property in a good location with good school for my kid, which still (barely) affordable for me..
    I said 1-2 years because that's when it's likely I'd have the 20% deposit for 1M property.. but not sure if I should pull the trigger once the money is ready or wait.

    Thoughts, advice, suggestions are welcome.

    Cheers.
     
  15. wombat777

    wombat777 Well-Known Member Premium Member

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    The above-ground section of the link out at Kellyville and Rouse Hill is running behind schedule by 6 months. They have had some significant engineering issues with part of the concrete deck near the intersection of Windsor and Old Windsor Roads. Those problems may not delay the completion though.

    http://www.dailytelegraph.com.au/ne...n/news-story/31da8cbac1ead05bc3ed8fda366157bf
     
  16. Simon L

    Simon L Investment Property Buyers Agent Business Member

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    I grew up in Cherrybrook and have known the area intimately for 18 years (also went to both CTHS and John Purchase as well growing up)

    From that perspective I find it hard to fathom why the values are at where they are now
    apart from pure speculation and an irrational desire from cashed up asian buyers wanting their kids to join the elusive high school. But I guess from a price perspective, this is typical for many parts of Sydney at the current stage of the cycle.

    Geographically, it takes at least 40 mins to get anywhere (unless you're going to Castle Towers), and although the new train line will help, I still think the most efficient and preferred way to travel will be by car (especially for the demographics in the area)

    The train station is also not in walking distance to most of, or the "main part" of Cherrybrook which I find odd, and means commuters will mostly have to drive/cycle/get dropped off at the station to get anywhere - something I can only see most people doing for their daily commute which is still a bit of a faff (can you imagine the congestion down County Drive and Franklin Rd during peak hours!)

    Having also lived in neighboring Pennant Hills for 9 years, I think its a much better suburb (especially on the High School side) with an already established train station and is a lot more accessible geographically to travel around Sydney without the need to deal with New Line/Boundary Rd which is horrendous during peak hours.
     
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  17. Gockie

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

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    Cherrybrook public school has a champion Cheerleading team... National champs and undefeated!! In the Hills Shire news again!

    But if they don't win next year it's because my superstar niece is going into year 7 next year. Apparently she's the single and duo champion in her division. She's an amazing performer. (Sorry but I don't know how to rotate the sideways image on my phone).
    20161116_091223.jpg 2016-11-16 22.52.15.png
     
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  18. kamchatsky

    kamchatsky Well-Known Member

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    Well the locals know that John Purchase PS is more academically focussed, Cherrybrook PS is great all around school. I am happy to send my kids to either of the two schools. However where I live though my kids will be going to John Purchase soon.
     
  19. kamchatsky

    kamchatsky Well-Known Member

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    I agree with most of what @Simon L said here.

    @LaoBan, All I can say though the house prices at Cherrybrook is consistent with most of what Sydney has experienced. If there are no value in Cherrybrook, then I would say it applies to Sydney house prices in general.

    In fact, I think the house price will jump another 10-15% once the North West Metro opens for business in 2019. To me, it will be very assessable from Cherrybrook to a lot of white collar jobs in Sydney:

    From Cherrybrook to:
    - Macquarie University/Macquarie Centre: 2 stops
    - Macquarie Park/North Ryde: 3-4 stops
    - Chatswood: 5 stops
    - St Leonards: 7 stops (change at Chatswood)
    - North Sydney: 8 stops (change at Chatswood to north shore express train)
    - Norwest Business Park: 3 stops
    - Central: 4 stops (change at Epping (1 stop) to Newcastle express train)

    To me, that is the one of the biggest strength of Cherrybrook. I think people don't realise how easy is it to go to work until the line opens.

    If you look at apartments at Macquarie Uni and Epping, and see how expensive it is right now (2 bedroom old apartments from 700K +?!), I think the 3 bedroom townhouses/villas and duplexes around Cherrybrook is an absolute bargain. The value will all come out when the train line opens.

    Another factor is the development of Castle Hill, especially around Castle Towers. There are massive re-development there. Castle Towers will be expanded to being the second largest shopping centre in Australia behind Chadstone at Melbourne. Castle Mall is now getting more and more popular with Asians with more Asian shops open there. I used to go to Eastwood for shopping. Now I just go to Castle Mall. Cherrybrook is only 1 suburb away from Castle Hill.

    Another factor for Cherrybrook is obviously education. There are a large number of Asian buyers buying in Cherrybrook, especially with CTHS zoning, for their kids. Sometimes I attended opens and most of them are Asians, and a lot of them just sell a tiny apartment in say Beijing and Shanghai and then buy a house here. They believe in investing in quality education for their kids, and they have no issues with paying more for a house to send their kid to the best schools.

    Finally, you need to consider the following before buying one at Cherrybrook:
    - Stamp duty for 1M home is about 40K; so you need around 250K for deposit for 80% LVR;
    - If you already have an IP in Sydney, then you may end up paying a lot of land tax per year because of high land price around Cherrybrook right now. It is easily past the threshold. Please take this into consideration in calculating cash flow;
    - If you definitely going to buy at Cherrybrook, either buy:
    . walking distance (say within 1km?) to future Cherrybrook station, or
    . walking distance to CTHS;

    Good luck with your search.
     
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  20. virgo

    virgo Well-Known Member

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    I find it very intriguing that Asians are so fanatical about high academic focused schools...

    For eg. i know a few really wealthy Asian friends ....

    Would they pay private school fees in Sydney? Hell No! although they can well afford it...

    They would rather pay through the nose for extra tuition classes which i am sure in some case can be very, very expensive and then send them to selective schools....

    I wonder if there is a lesson here on where to buy? Cherrybrook vs Wahrongna? Hmm....