Good time to upgrade

Discussion in 'Investment Strategy' started by einentiva, 27th Feb, 2019.

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  1. einentiva

    einentiva Well-Known Member

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    Is it a good time to upgrade PPOR in Sydney at the moment?

    Even if it involves selling then buying?

    Please discuss
     
    einentiva, 27th Feb, 2019
    #1
  2. albanga

    albanga Well-Known Member

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    Well the quick answer is if the area your selling in hasn’t declined much and the area you want to be in has and you calculate exit and entry costs and you would be in front then sure why not.
     
    albanga, 27th Feb, 2019
    #2
  3. Trainee

    Trainee Well-Known Member

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    In a down market, you get more choice. Nicer places are available and ‘need work’ places can be bargained down.
     
    Trainee, 27th Feb, 2019
    #3
  4. einentiva

    einentiva Well-Known Member

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    thanks for the replies guys. Am seriously thinking about it now
     
    einentiva, 27th Feb, 2019
    #4
  5. Trainee

    Trainee Well-Known Member

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    Also seriously consider selling first and be prepared to rent.
     
    Trainee, 27th Feb, 2019
    #5
  6. Propertunity

    Propertunity Well-Known Member

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    If you are buying and selling in the same market (whether up, flat, or down), then it makes no difference. Just make sure that if your strategy is to sell first, then don't get caught if the market suddenly takes off (unlikely at a guess). AND make sure before doing anything, that you can get finance for the new purchase as some people would not qualify TODAY for the mortgage they already have.

    Most upgrading involves this :)
     
    Propertunity, 27th Feb, 2019
    #6
  7. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Being a cashed up buyer has to have opportunity. The issue is one of timing and its hard to know just where the bottom is. The upside potential is also a unknown. Dont assume the highs of 2 years ago are assured.

    Back 15 years so so ago we sold at the top and waited 9 months to buy back in. Its was exercise in patience but I think we bought well in a tight market where buyers were not common. We bought better than expected.

    If you are cashed up and ready to buy you can make offers and be quite strategic in your offers. If you sell just understand what you seem to drop on one you should more than make on the other.
     
    Paul@PAS, 27th Feb, 2019
    #7
  8. albanga

    albanga Well-Known Member

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    This is not entirely correct.
    Say I own a property valued at 500k.
    My dream PPOR in same market is 1mil.
    The difference in price is 500k

    Now say the overall market drops 10% (mind you the higher market tends to drop more).

    My PPOR is now valued at 450k.
    Dream property is now valued at 900k.
    Difference is now 450k.
    And you have saved yourself 50k worth of exit and entry costs.

    So actually upgrading in the same market when it has declined can be beneficial.
     
    albanga, 27th Feb, 2019
    #8
    Eric Wu, chylld, Beyond Wealth and 1 other person like this.
  9. Beano

    Beano Well-Known Member

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    Yes very true
    if your PPOR drops to $1 and your dream property is double then your upgrade is only $1 :)
     
    Beano, 27th Feb, 2019
    #9
    albanga likes this.
  10. Propertunity

    Propertunity Well-Known Member

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    Yes agreed. I was waiting to hear something like this :)
     
    Propertunity, 27th Feb, 2019
    #10
  11. Jacque

    Jacque Jacque Parker Premium Member

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    I was recently interviewed on this very topic and, along with other REBAA members, most of us in the BA world are definitely of the opinion this softening market is a boon for upsizers, particularly those who have cash and time on their side this year. The cashed up buyers ruling home sales
     
    Jacque, 27th Feb, 2019
    #11
  12. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Throw in $100K of changeover costs too...Agents, legals, moving and duty.

    In tight markets the higher the value the larger the discount.
     
    Paul@PAS, 27th Feb, 2019
    #12
  13. albanga

    albanga Well-Known Member

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    Yeah you were waiting for a smart#€$ like me haha
     
    albanga, 27th Feb, 2019
    #13
  14. beachgurl

    beachgurl Well-Known Member

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    In my suburb single garaged homes on narrow blocks are down around 100-150k. Double garaged homes on wider blocks are down around 200-250k so it's definitely worth upgrading here
     
    beachgurl, 28th Feb, 2019
    #14
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