NSW Macquarie Park - apartment - capital gain likely?

Discussion in 'Where to Buy' started by ohmyback, 6th Aug, 2020.

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  1. ohmyback

    ohmyback Member

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    Hi all,

    Just hoping to get some thoughts and 2c on purchasing a 1br/1bath/1parking spot apartment in Macquarie Park. This particular apartment is just off Herring Rd so it would be just up the road from Macquarie Centre (think Westfields). It would also be a 5 minute walk from Macquarie University and the train station/metro. There is also a well established business park anchored by the likes of Optus, Cisco etc.

    Judging by comparable apartments I can get $500-$550 a week. My thoughts are that renting out would be easy due to having the Uni + Business park nearby - think students and young professionals.

    The apartment in question is off the plan around 690-750k (depending on a few things). It appears the property would not yield positive cashflow (maybe breakeven at best). Which brings me to the crux of the question. Do you guys think property in Macquarie Park has strong capital growth prospects? I'm happy to be out of pocket a couple hundred a year in cash flow if we're looking at 200-400k growth down the road.
     
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  2. Gockie

    Gockie Life is good ☺️ Premium Member

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    For capital growth you want land and scarcity. There is no scarcity and little land content for those apartments.
    I reckon a house in the Mount Druitt area may have better capital growth. Just my 2 cents.
     
    Last edited: 6th Aug, 2020
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  3. David Shih

    David Shih Mortgage Broker Business Member

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    Macquarie Park has lots of new units to be completed in the pipeline, so as Gockie said there is no scarcity factor at all. For capital growth you want little supply and lots of demand, so you just need to ask yourself whether Macquarie Park apartment fits into that criteria.

    I would also be cautious whether you CAN actually get $500-$550/week rental. There are so many available apartments for rent and more being completed...so chances are rent may continue to go down which will erode into your yield/cashflow.

    Cheers,
    David
     
  4. jprops

    jprops Well-Known Member

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    Think about your target market when you go to sell. Who wants to buy a 1 bedroom apartment? Not very many people.
     
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  5. Shogun

    Shogun Well-Known Member

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    Students paying $550 a week rent? That is a lot of hours at Maccas just to pay rent
     
  6. Ryoka

    Ryoka Well-Known Member

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    Ive been living in the area for 20 yrs now, and i wouldnt buy a unit in the area now....esp a 1/1/1.

    Rent is getting cut so hard. There's oversupply now.
     
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  7. Tony Xia

    Tony Xia Structured Loan Advisor Business Member

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    Like all the above, supply is plentiful in Mac Park, doubt you would find any properties in sydney thats positive geared, unless you manufacture the rental yield yourself.
     
  8. Scott No Mates

    Scott No Mates Well-Known Member

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    The section of dated social housing stretching from Macquarie Uni/Centre/station to Epping Red is being redeveloped with a mix of social, targeted & mainstream units.

    Plenty to choose from in the area so no need to rush.
     
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  9. Lindsay_W

    Lindsay_W Well-Known Member

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    Have a quick search of OTP apartments on here, most will tell you not to buy them, for good reason, there are some horror stories out there.
     
  10. Trainee

    Trainee Well-Known Member

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    Those red brick 3 storey ones might be good value long term tho.
     
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  11. Lindsay_W

    Lindsay_W Well-Known Member

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    Some of those can be great investments for sure, just not the off the plan stuff
     
  12. ohmyback

    ohmyback Member

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    What makes the red brick apartments good investments?
     
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  13. Trainee

    Trainee Well-Known Member

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    Scarcity, low maintenance, land content now. Future redevelopment potential. Eventually a builder is going to pay a motza for it because they can put together a site for a highrise.
     
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  14. Lindsay_W

    Lindsay_W Well-Known Member

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    Everything below
    And lower holding costs, as in less body corp fees, usually a larger land content, can still get good rental returns and not overpaying like you do with Off the plan stuff. Better capital growth potential vs new stuff. No lifts to maintain/replace
    What do you like about Off the plan apartments over other properties @ohmyback ?
     
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  15. Trainee

    Trainee Well-Known Member

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    At a guess, easy to rent, low maintenance, lots of depreciation, shiny photos to show friends and feel proud about?

    Too bad some of those arent true and none of them helps with creating wealth.
     
    Last edited: 7th Aug, 2020
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  16. ohmyback

    ohmyback Member

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    I have no inclination towards either, I'm just trying to get opinions and educate myself. Thanks for everyone's comments so far I have gained a lot of real estate 'wisdom' just from a few hours of asking questions :)

    @Trainee You're right though - the sexy marketing and "check this out" appeal is definitely real with these OTP properties. I am mature enough to resist it but i thought it'd still be worth assessing the property on its own merit.
     
  17. Trainee

    Trainee Well-Known Member

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    Lets wait until you buy a fibro shack that you wouldnt live in and your friends think youve gone mad.
     
  18. virgo

    virgo Well-Known Member

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    Do check if banks are still lending to Macquarie Park off the plan apartments first :(...or at the same % of LVR...that will tell you?
     
  19. virgo

    virgo Well-Known Member

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    Who cares what my friends think??!!:p
     
  20. Paul@PAS

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

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    Macquarie Uni is effectively closed with no plans for that to change
    Macquarie is foreign student affected.....And will remain so for a LONG time
    Rental oversupply of student accomodation is a worry
    All the prime employers in maquarie park excepting pharmas like Astra are covid impacted workplaces. eg Foxtel is work from home.
    How many business will downsize staff ?

    Loads of new builds are for sale and others sprouting and many are yet to start = over supply

    I would be considering a huge write down before touching any purchase in that area. Sellers may be dreaming.. who knows. I cant think of a single factor that supports prices being flat let alone rise.
     
    SydneySuburbReviews likes this.