NSW Investing in Mt Druitt

Hi all,

Long time reader in Somersoft forum but first time poster so apologies if this question has already been asked before.

Some background:
- I currently have 2 units under my name
- 1st IP in Granville, 2/2/1, bought 2011 as OTP
- 2nd PPOR in hornsby, 2/1/1, bought 2013 as IP now moved in as PPOR
- strategy is buy and hold, ideally neutrally geared or positive cashflow

Been looking for the third investment property and is considering Mt Druitt as I'm looking to invest about 300 to 400k.

Question: would people recommend investing in Mt Druitt? I can see some 2 bedders around the station and Westfield within that price range. However I'm also mindful there housing commissions. Could anyone point some direction in where the housing commissions are please? For example which street perhaps.

As an alternative, would Penrith be a better option than Mt Druitt? Apologies as I'm not really familiar with these areas so would like to know some thoughts from the locals.

Thank you all in advance and have a great Sunday arvo!

 

Hi @LeMU,

The area has gone crazy (like the rest of Sydney) and the rental yield is now around 4.5%-4.7%, which I reckon is just too low. I could be wrong but I believe there isn't a lot of CG left in the area.

What's your strategy? Why Mt Druitt?

Have you considered interstate?

Cheers,
MsAli

 

I agree 100% with MsAli.
Consider interstate. I don't think it's necessarily a good time to be thinking Mt Druitt, it's already had a lot of gain.
I have a colleague who bought House and Land out near Penrith and I can't believe that will cost over $800k all up. But it's for his PPOR. OMG...

 

I think kingswood would be a better option, around uni and hospital.

 

What street? Dear, dear me....you HAVE lead a sheltered life, haven't you?

I'll forgive you, since it's units you are looking for.

For reference, much of the suburbs around Mt Druitt are originally Housing Commission. There has been a lot sold off and now are private homes. You can't pinpoint what street(s) are HC because most of them are mix of HC, private rentals and people buying their own home.

 

Thanks MsAli.
My strategy is buy and hold - could hold it for as long as it can sustains itself.
I've thought about investing interstate such as QLD for example. But call me conservative - I would still prefer to invest somewhere in Sydney given I've been living here for over 15 years and are more comfortable investing here than any other state, at least for now.
I'm also aware Sydney market is currently over the roof, but given the budget I have that's why I'm turning to Mt Druitt as from what I can see I can still get a 2 bedder unit for 300 - 400K. And Mt Druitt has train line with express train to City as well as a Westfield available for convenience. That's why I think in long term run it shouldn't go TOO wrong...

Thanks Gockie. Apart from interstate and Mr Druitt, would you recommend anywhere else in Sydney at all?

Thanks Egga I will have a look at Kingswood

My apologies skater, as I said earlier in the post I'm not really familiar with the Mt Druitt area at all and recent research on HC around Mt Druitt are all fairly old topics (mostly dated about 2 to 3 years ago) so I thought I better check with someone who is familiar with the area. The post about 3 years ago suggested around Hythe St was where the HC are but again that may have changed now.

Thanks for providing an update to the area, certainly that would make sense as the price has now gone up due to demand in living in this area. I find it difficult to find units between $300K to $400K now in Sydney (with relative distance to public transport and shopping centre, university, hospital etc). Do you think this area will be gentrified anytime soon in the next couple of years?

 

Hi Egga,

Why Kingswood also . Conservatively, there has been a gross 40% capital growth in the last two years..........or was that a dart on the board?

 

Hi LeMU - what's your goal? No one has a crystal ball, but a return of 4.5% is scary. What's that net after costs? When rates go up, how will you sustain it?

Sure, it's a great location...............but would you like sitting on something that has a risk of not moving for a long time?

I guess if your research reveals something else, by all means go for it......I have vested interest in the area, so I don't mind if it keeps growing

 

Hang on...
Did u just say that mt druitt is a great location..?

 

Yes. Look at the amenities, development, rezoning, capital growth...yes it's been awesome for those who purchased in the area 2.5+ years ago.

Paging @skater

 

Hi LeMU,
if you can find an interstate or overseas seller and an incompetent agent who has no idea of what a property is worth and you manage to buy that property below market value cause you managed to get onto it really quickly, thats about the only property I could recommend buying in Sydney. If you buy and hold, it still needs to be not a dog either for location, ie. still have good access to transport etc.

Needless to say, it would be as rare as hens teeth...

 

Yep! He sure did!

Mt Druitt IS a great location......but it depends on what you want from it.

Does it have social issues? Yes! But so does many other places. When you overlook the stigma of the area, there are many things going for it, like MsAli says. BUT...you also need to factor in that as it's a very low cost area, it goes through boom/bust cycles. At the moment prices are high. Will they go higher? I don't have a crystal ball, so I can't give you the answer to that. When the price rises are finished expect it to pull back over the next few years. So....buying now could still be good if the prices are going to keep rising. OR prices could be at the highest, and due to pull back. It's anyone's guess.

FWIW I have noticed a few out of area agents having open homes lately. They don't seem to advertise in the local paper, so you only find out about them by logging onto RE.Com. They don't seem to have as much activity as the local agents, so if you ARE looking in the area, you might get a good price on one of these.......OR wait a few weeks....I've got one in Tregear going to market.

Personally, I don't like units. I would always go for a house over a unit in the area, unless the unit was an outright bargain. I did have a unit in Kingswood which we've recently sold, but we only had it due to buying it at the right price with the intention to offload as soon as the market turned. Which we did.

 

Hi Skater, when do you plan on going to market with your property? I've been looking around the LB/Tregear area and wouldn't mind some more details on your place?

Cheers

 

Agent will be getting the keys tomorrow. It's a brick 4 bedder. Freshly painted internally with a new bathroom.

 

ohk guess ill have to wait until its up on the net then

 

Probably by the end of the week. Starr Partners.

 

And under contract in the first hour

 

Hehe! Hopefully! Did you want it Dave?

 

I think you meant 'SHE'

 

Hehe! I guess so......