NSW If you Must buy Apartments in Sydney

+1 for Maroubra. Lot going for it. And I'd choose Kensington over Kingsford personally (for an apartment).

 

Anything East of Sydney CBD is likely to have already done the growth it could have by now and many of those are older apartments which means maintenance. Randwick for example was perfect to buy and reno in 2009.

I personally would rather buy land in outter suburbs than an apartment in inner suburbs however my first pick for apartment would be in or around Parramatta or alternatively in between Parramatta and Hills Shire. Research and buy something near new, your maintenance costs will be low and Parramatta is the top spot, not just in Sydney but in the entire country for the next decade.

 

That doesn't make any sense. Why would an apartment in an outer area (with more supply compared to the demand) increase in price more than an apartment in an inner area (which has more demand)?

The whole point of apartments in that you sacrifice the land component for the benefits of the location. If you are already going further out, most people will go out a bit more to get land. That's generally not possible in inner areas as the price difference is far too high

 

Agree 100%. Plenty of company title properties too - lower levies (usually including Water rates, maybe hot water, maybe heating) - you just have to make sure that the company rules allow renting out apartment - some do/some strictly don't. Banks will only lend 80% - but that is becoming the norm even for strata......

 

If you are referring to Parramatta, then it is not by any stretch of the word considered as "out".

Parramatta is the place to be in the next 10 years, it is currently referred to as Sydney's second CBD and I would not be surprised if it surpasses the CBD of Sydney and become the first CBD in the following decade.

If you consider Parramatta as an "outer area" then with all due respect, you don't know Sydney period

Just for the record, I dont think that apartments located within eastern suburbs of Sydney are bad, it's just that they have done most if not all of the price growth. They dont have much of a reason to continue growing too much further.

 

Imo Sydney CBD will always outclass Parramatta

 

I meant "outer" as a relative term - i.e. not in the city or an inner city suburb - I didn't intend to imply that it is the outermost part of Sydney.

Parramatta will grow further in the long term I'm sure but I doubt it would ever come close to the economic might of the CBD and surrounding areas. I answered the question as a purely hypothetical. I wouldn't buy anywhere in Sydney at present. Just my 2c

 

What about Liverpool?

 

Hi everyone! I am in my early 30s and I don't own any house in Australia yet, I am also working in South Eastern part of Sydney, Kogarah to be exact. Can anyone give me an advice with my current situation? My first plan was to buy an IP in Brisbane through a buyer's agent since I don't know anything about Brissie and my budget would be around 400-450k neutrally or positively geared property, wait for the value to increase then pull the equity out for the deposit of my PPoR or another investment property. But with the new grants that NSW is offering for First Home Owner Buyers I can buy a 2-1-1 apartment unit near work around 580-620k as well.

Now if I decided to buy the IP in Brissie first my question is, will I still be eligible to access the first home owner's grant like the waived fee of stamp duty for propertiens 650k and below and salary sacrifice part of my earnings to add funds for the deposit?

Another question, with my budget of 580-620k I can also buy a PPoR in Penrith/Kingswood or Mt. Druitt live there for 6mos probably stay there during my days off work and rent a room in the city then move out after 6mos and have it rented so I can live closer to work again.

My target really is to get started in the property ladder but I'm just really confused which path to take at the moment.

I appreaciate all your responses. Thank you!

 

Firstly, you need to work out what you are gonna do, either buy a PPOR or you rentvest. Don't try to do both because you will end up with an inconvenient PPOR that is also a bad investment. To me it sounds like you should rentvest. You live close to where you work, you seemingly don't have a wife and kids so just stay where you are and look at places that are great for investment. Brisbane seems to be a very popular choice for a lot of investors at the moment.
By the way, if you buy an IP in any state you will not be eligible for FHOG, it needs to be a PPOR.

 

What are your long term goals? If it's financial freedom I'd look to rentvest and invest where there's good capital growth potential. Don't let government incentives drive your decisions. View them as a bonus, should you be able to take advantage of them AND it fits in with your long term objectives.

 

@Inov8ive thanks for the feedack. Yes you are correct no wife and kids and I live very close to work. This brings back the fire in me to rentvest and focust to grow my portfolio first. And thanks for answering the FHOG now I understand how it works. Brisbane is really popular at the moment that's why I'm also keeping my eye on that area particularly in the northern part of Brisbane.

 

@Jack Chen I appreciate your response too, my long term goal is to be able to be financially free in 10-15 years time, maybe 3M asset portfolio to replace my income and do something else in the near future. I already made up my mind to buy an IP first until the premier announced the changes specially now that the media is heavily targeting property investors blaming them to cause the prices to go up, another thing that distracts me to but IP first is the regulation regarding I/O loans which can limit me to accumulate more IP because of a limited cash flow when my loan is not eligible for I/O anymore. You think in a few years time they will change this back again to what it was before?

 

Try to tune out the noise if you can. Tax system is still heavily skewed towards favoring property investors. Use it to your advantage.

I am still recommending Investor I/O loans for the clients I work with. Cashflow wise it still makes sense for those in accumulation phase.

No one can predict the future but this is the reality we are faced with now. Set your destination and make minor adjustments along the way.

 

I dont think CBD outclasses Parramatta by any stretch. In fact Sydney CBD apartments does have many pockets of back packers or low income workers / students that get together as few people living in one small apartment. I personally would not want to live anywhere near Sydney CBD area or East of it for that matter be it apartment or a house.

As I said earlier, eastern suburbs or around the CBD or places such as Randwick were great to buy back in 2009 from investment point of view. You made money just through buy and hold because those areas just went up as the entire Sydney property market grew.

Right now however, even if you manage to get an apartment in those suburbs it will likely be very old and outdated with very high maintenance and/or strata costs as almost all of gold nuggets are gone in the past few years and whats left is the stuff that for one reason or another is not good.

Furthermore there is nothing new happening in that area, where is it going to go?

Parramatta on the other hand is getting a massive revamp and billions of dollars of both private and public money is being invested in or around Parramatta. Apartments are going to be newer and due to competition will be better priced and perhaps lower long-term maintenance and strata.

 

No one is going to buy an apartment just because it's new - have a look at the likes of Green Square and Zetland with so many new towers that no one wants to live in.

The old apartments that you are criticising in the eastern suburbs are actually very favoured by owner occupiers for their charm and character. They will only get rarer and more favoured in the future IMO. We live in one that is about 100 years old and has nice ornate ceilings, picture rails and cute windows. The interior fixtures like kitchen and bathroom have been renovated. There are some especially amazing old buildings around the likes of Elizabeth Bay etc - we went to one auction a few months back just to see the buiding with a massive crowd and people spilling into the street.

Many new apartments are just concrete dog boxes and probably have more maintenance issues than old ones with all the mass-produced developments these days and developers cutting as much corners as possible to maximise profit. Older buildings were smaller and had more attention to detail.

 

Older apartments are better for owner occupiers. I have a few older ones in Parramatta I got for real cheap - they have more than doubled in value.

The best thing about these apartments is that they are favoured for people who want to live there because older ones are built better and uses better materials. Both my units are full double brick and the quality of the outside and general construction is of higher quality. Asians especially love double brick units - I could flip mine in less than a week

It may be older but all new apartments are just gyprock and hebel. Not a single newly built unit block is built solid like the older ones.

 

Went to 2 auctions today:

5/70 The Boulevarde Strathfield NSW 2135 - Apartment for Sale #125519790 - realestate.com.au
If you know Strathfield, this one is quite well located. Very close to everything but is amongst the older units which are mostly rented out.
Due to proximity to amenities I suspect there is a high concentration of subletting going based on the amount of traffic I see going in and out of the blocks each day.

This one is basically on the ground floor albiet elevated. Was newly renovated by Chinese owner. Nicely done, finished well (I suspect there were even structural changes but cannot confirm).

Decent turnout (40+ ppl fit in the lounge/kitchen area) Mostly asian audience. Saw 5 bidding cards taken but really only 3 bidders participating.
Passed in @ $1,025,000. Highest bidder went into negotiation with vendor (I did overhear the reserve was 1.1mil).

Then went to this one.
8/2 Cobden Street Enfield NSW 2136 - Unit for Sale #125490722 - realestate.com.au
This one had an inferior location (and most would say suburb) but had an x-factor - 200m2. It's literally as big as a house! Had a side by side lockup garage underneath too which can be used to park cars and/or gigantic storage.
Also on an elevated ground floor but in mostly original condition. Double brick, a little tired but had a funky smell which I think has soaked into the walls and carpet.
Major cracking on multiple interior walls and also on the outside brickwork. Only 12 units in this block but strata was $1200+/qtr which may suggest the sinking fund is depleted?

About 20-30 in attendance for this one with a mixed crowd; asians, anglo, mediterranean euro's.
Again, saw about 5 registered bidders.
Bidding commenced @ $825k and was on the market @ $900k with 3 still in the race.
At $950k it was a 2 horse race between Asian (vietnamese) buyer vs Italian family.
Hammer dropped @ $1,020,000 to Asian buyer.

Personally felt both were overpriced but guess that is the current state of the market we are in.

 

What about apartment in Wolli Creek ?

My friend owns two apartment unit in this area and he is confident that the price is already accummulating $200+ more for each apartment unit (2/2/1) from when he purchase the OTP price.

 

I'd prefer Croydon park and surrounds to Wolli Creek. Its about 4.5km closer to the CBD with more competitive pricing.