NSW (IP) Western Sydney vs Logan area for first IP

I'm looking for advice regarding a first IP purchase (already own a PPOR in Sydney). On one hand, I'm considering Western Sydney (Mt Druitt/St Marys and surrounds). On the other hand, I'm looking at Logan city council areas close to M1 motorway (Springwood, Rochedale South, maybe Meadowbrook even). I'm working with a ~ 800k budget, which I can stretch up to 900k at most. Investment timeframe 10+ years.

Logan city areas look like a good deal, given the high rental yield and the prospect of capital growth over the next few years. I guess my main worry is that I don't know the Brisbane metro area well and the the potential for the rental yields to stay high over a period of time. Will the high levels of migration into QLD continue, thus driving the market for rental and sales higher? What kind of jobs exist in Brisbane and where is growth projected in the coming years?

Having lived in Sydney for a while, I'm fairly confident with what I'm getting into with the purchase in Western Sydney. I guess I'm looking for advice mainly around the pros and cons of the two areas against each other.

I'm leaning towards Sydney, but my gut feeling says that Brisbane might be a better bet in the long term. Open to hearing your thoughts.

 

Since this is your first IP I'd be leaning towards staying local.

Western Sydney is on a massive trajectory of investment and growth. I posted in the St Marys thread of the $55 Million redevelopment/renovation that just completed in Mt Druitt and due to open next month. There are billions of dollars going into the area over the next 5 years.

Prices are not cheap anymore though and yields wont be enough to cover your loan these days. I think if your looking at a 10+ year investment term Western Sydney still has some decent growth in it. I'm expecting all houses out this way hit $1M+ before the airport, metro, aerotropolis and road upgrades are complete. Even the other areas in 2770 are getting damn expensive.

Logan has moved close to 50%+ in this boom and pretty much doubled since 2017 as its already been rising steadily since then. I'm expecting Logan to also rise another 15-20% this year along with most of Brisbane but if your budget can support Western Sydney that's where I would buy. The amount of money investment/infra going into Western Sydney due to the new airport is night and day compared to Logan.

P.S I'm a Logan lover and I have a lot of confidence in Logan at the moment as well. That place is red hot at the moment. Even rents are skyrocketing as well.

 

Perth.

 

So glad I found this thread. I'm also in the look out for my first IP- Im considering south west and western Sydney, logan/ipswich councils in Brisbane. Perth is also under consideration after having read a lot of posts here on this forum, but I know nothing about Perth otherwise- considering a Buyers Agent too.

 

A blue chip in Perth would be my choice in that budget.

 

If you can afford it go Sydney’s west. Got the new airport coming and heaps of money will be poured into mt Druitt.

 

Thanks for your comment. If I may ask, why do you think Logan will continue rising in 2022? What is driving the price growth in Brisbane? Is it all the folks headed that way because of remote working options in the aftermath of the pandemic? Also, what is driving the demand for rentals in Logan? Any insights would be appreciated.

 

Which ones are the blue chip suburbs in Perth? I don't know my way around Perth.

 

Why Perth? What sort of growth are you expecting?

 

For me , there's already been growth in Logan ( more to come ) but Perth has only just started with stronger growth recently and the price range you're quoting will get you a nice house .

No guarantees , but it's looking good at the moment . Brisbane may out perform Perth in the next year as it's going really strongly , but in the next 5 , i'm putting my money ( literally ) on Perth . having said that , we own several in Brisbane , but we're already sitting on at least 50 % gain on what we've bought.

There are several threads on Perth at the moment . Start with the dummies guide which does talk about different areas.

Cliff

 

I love Western Sydney BUT, my money is on Perth as well. Perth hasn't moved for quite a while. It doesn't matter if you don't know much about the market in Perth. Start researching and looking. Do it now!

 

Do you engage BA in Perth?

 

Why stay local?

Especially when in this case it means yields are likely going to be sub 4%! That is a major hit on serviceability moving forward.

Remember 80% of investors get stuck at one investment property...

My motto - Live where you like, and invest where is best...even for first time investors. This cannot be compromised.

 

Easy to say, harder to do especially for first time investors.

Many already have analysis paralysis, many are already scared or have some level of hesitation as its their first investment.

I know when I started I would never have bought interstate. Yeah I was young and quite dumb back when I was 21 but it would have been even a bigger hurdle to cross especially mentally for me anyway. When I started buying interstate I already had 10+ properties in Sydney which made it so simple for me and my confidence level of buying houses was already stable.

I'm not sure I could say the same if I was buying my very first interstate though.

 

Nice one - sounds like me lol

My first couple of properties where 5min from where I grew up...

But...

Things are alot different now.

The only property data I had when starting out was in the back of magazines. And good luck getting an agent or property manager to video a property.

More difficult - maybe...

But this is serious - if your local area is not investment grade, then it can severely impact your ability to grow a portfolio past one investment.

 

My first was an hour from home, second & third were in Tasmania, and this was over 20 years ago when information was harder to source.

Fixed it for you.

 

I am a newbie and looking for my first IP like you. Is your strategy negative gearing for Western Sydney purchase as it's rental yield is only 2.8-3%. I am considering Western Sydney or Logan for long term investment without morgage stress.