NSW First Home - Eastern Suburbs Unit?

Hi,

How does the community here feel about units in the Eastern Suburbs of Sydney?

TLDR: Want to buy first home in nice location without sacrificing lifestyle, 1M budget, feel like east is blue chip investment/PPOR. Otherwise rentvest, but not very confident in property.

I am considering buying my first home and I have a budget of ~1M, ideally looking for an older style art deco 2-2-1 apartment (unit), but I am tossing up between rentvesting and buying a place in Sydney.

I have intentions of either buying a property so I don't have to pay rent anymore with these low interest rates, or otherwise find a property thats cash flow positive from the get go/within a few years. I have moderate risk tolerance, but I am not a confident investor in property just yet (hoping my first purchase will fix this!)

Some factors I am considering:

• To me it seems these suburbs are almost a blue chip investment as there will always be demand for good schools, being close to the beach and an active lifestyle, while at the same time being close to the city.
  
• Units are cheaper than houses and also more affordable, so as the general property market continues to rise, I believe that units will be seen as a more affordable investment, hence potentially more demand. Especially in more premium suburbs such as the east here where houses to many are not even a consideration.
• As it's my first purchase so I am not sure I'd be comfortable buying a property somewhere I wouldn't know and would have to go interstate to see (other than Melbourne as that is my home city, but I am in Sydney for the next 5-7 years minimum). I know Brisbane is very hot right now, but I know absolutely nothing about it and I'd like to visit the city to view any properties before I buy.

Just as an example, I have looked up the stats for Rose Bay, which show the following (houses and units respectively):

• Median Quarterly 7.49% 1.38%
• Median 12 month 6.93% 1.38%
• Median 3 years 10.51% 4.26%
• Median 5 years 25.85% 42.72%
• 10 years average annual 7.31% 8.57%
• Weekly media advert. rent $1250 $625
• Time on Market 66.1 days 64.5 days

It seems like the market is slowing down a bit on units with quite poor growth in contrast to the rest of the state, but my gut kind of tells me it is a good time to buy, especially with supply not really increasing in the area, other than some minor developments in Randwick and Bondi Junction, neither of which I am interested in (also not considering far down to Maroubra and the likes).

Here are just some properties for sale that I've found that are of interest:

• 8/10-12 Liverpool Street, Rose Bay, NSW 2029
• 5/667 New South Head Road, Rose Bay, NSW 2029
• 11/35 Birriga Road, Bellevue Hill, NSW 2023 (Guide 1.05M)

Would love to hear your thoughts on this situation. Thank you!

I found a previous thread here, but I can't seem to reply to it so my apologies if this is a duplicate.

 

You and me both.
Rentvesting in Darling Point at the moment and have been for the last three years.

Have been looking but ended up buying a house in Blacktown in 2020. Now ready to go ahead and thinking about an apartment in the Eastern Suburbs.

Budget would be similar to yours and areas also roughy the same - Rose Bay, Rose Bay North and Bellevue Hill areas. Only problem is a lot of the apartments in the 1-1.1mn budget won’t have a car space or they will have very little sunlight (south-facing or ground-floor or even underground!!!)

 

Hmm its CGT free, primo area, access to sub 2% blended cost of funds, and supply locked. To beat those set of conditions reinvesting, you'll have to do very very well. I personally think its a decent move and one I'd take if I were in a similar position too when assessing alternatives.