Hi gents/madam , Looking for some advice for my situation. I'm looking to buy my first property mainly for investment purposes. I can borrow up to $990k for an investment property or $890k for a home. Am in my late 20s, living in Sydney with parents and don't need to move out in the very near future. My dilemma is, whether I should buy a house in Melbourne/Brisbane because of lower cost and potential better growth or shall I start in Sydney as it can be a potential future home. Here's my analysis so far: Buying in Sydney: - In Sydney it'd better that I buy my first property as a newly built or good condition Townhouse as it will be much cheaper and affordable. I can choose a good location that can have good growth potential eg. thinking of Liverpool, BlackTown, Mount Druitt areas and a spot that'd be close to station so if I do decide to call it home one day, I can easily catch the train to my work in the City. -Buying a house would be too expensive, even if I can technically buy one, but it will either be and old ****** one or a house and land packages in Austral, Leppington areas etc. Buying interstate: - There could be good growth here, plus I can afford to buy a house interstate. -It will be easier to add the next property to my portfolio. -However if I start interstate, it will be difficult and far in the future to then buy a property to call home in Sydney as Sydney might keep rising. Especially if I plan to buy a house/Townhouse in Sydney to call home. If I go down this rout, I'd probably have to sell my interstate property(s) to then buy a home in Sydney, but there will be the extra costs of selling/buying. I've talked to a few of those house and land packages that keep telling me that it'd be better for you to start interstate, keep accumulating IPs then sell and buy a paid off house in Sydney. Though my current instinct says to buy a good compact Townhouse home here in Sydney first then buy IPs wherever in a couple of years time because my borrowing capacity will be reduced. I'd really appreciate your thoughts and advice. Plus, any proper method/channels to seek these kind of advices? Financial advisors don't seem to know much about realestate and realestate experts are either trying to sell me something for charge $10k+ for buyers agents. Thanks guys
Apart from a few heady years when Perth overtook Sydney, Sydney always has been the highest priced market in Australia. Hard to see you going wrong in the long term by buying there. You have probably missed the big increase in value in Brisbane as prices have skyrocketed here over the last 6-12 months. Obviously no one knows how long the prices will keep increasing.
That will take lots of paid off interstate IPs to buy a paid off house in Sydney. Buy a PPOR in Sydney and you should be okay if you are able to compromise on the location. Keep upgrading your PPOR as your income grows and use increases in equity to start an investment portfolio interstate. Trying to play catch up with Sydney market with intestate IPs has never worked for anyone and also forget about house and land packages.
In Sydney terms , I would NOT consider Liverpool , Mt Druitt , Blacktown as good locations for a town house . Affordable maybe , but good given the growth in the last ten years . for town house under a mill I'd look at somewhere like Marsfield . Something like this https://www.realestate.com.au/property-townhouse-nsw-marsfield-137885022. My kids are in their late 20's to early 30's and have all bought an IP in Brisbane and two are looking for a second. Though the window to buy in Brisbane for good growth is closing . Most members are sitting back watching their portfolio's grow . Cliff
I agree with @standtall, stay away from House and Land packages. Most people dont do well with them. Very few do and even then, its questionable whether they would have been better than established in terms of CG. Re Sydney, If you're wanting to buy there i would wait another 6-9 months as the probability of a softening market is more likely than not. You may pick up a decent priced place. I can't say bargain because prices have already moved so much.. but perhaps a 'bargain' if compared to 18 months earlier. Brisbane also had mammoth growth. Middle ring still has some value with a long term outlook imo. If you're wanting to buy a PPOR in Sydney, I'd wait 6 months then reassess the market. Definitely buy established imo.
Never say never . High profile member bought a few cheapies in WA last cycle . Sold them and paid cash for a house on the northern beaches ... Does work for some . She might have even done that before she hit 30 . Cliff
Yes but since I'm looking for investment purposes, I'm being considerate of all the opportunities and which would be the best one for my circumstances. Whether to start in eg. Melbourne or here in Sydney. If I do buy a property which I could potentially live in, it will have to be in Western Sydney, where my parents, siblings and community lives in. Which suburbs/areas or property types would you recommend in Western Sydney for high growth? Btw, Liverpool is set to be the 3rd CBD of Sydney. That's why I think it has a good potential. Yeah maybe not never, but in general how likely is that? I guess I'm being pulled by my two interests, one is investment to build a strong portfolio and the other is having a home. It'd be great if both could intersect, i.e. in Sydney, but not at too much of an opportunity cost for better investment opportunities.
When I was in my early 20s I was in the same position (except for the 990k budget) and its still the advise I provide my younger relatives Id buy the crappest house in the best location in relation to PPOR. You can always knock it down and build the dream house later. But once priced out preferred location becomes harder Hopefully your income goes up by then or my guess is your single (or not living/purchasing with your partner)? If this changes you might have additional income in the future. Other thing is if the market crashes and you bought interstate your not just going to pack up and move in, while in your own location you will end up using it one day in the future For 990k id look for full size blocks (duplex even better - your not going develop tomorrow or maybe never but the option is great) around Parramatta (have seen stock around Merrylands/Guildford/Toongabbie that might be possible within budget but dont expect pretty houses). Nothing wrong with Western Sydney (Blacktown/Penrith) but prices seem to be coming closer to Parramatta and I think value is better but if thats yours personal choice then yea. Id avoid anything new. Your not moving in so your not going to really see the benefits of it and those H+L packages aren't the best locations. In relation to advice id go instinct over advice as nobody will ever know your circumstances and whats right for someone might not be right for you
Sydney has over doubled in the last ten years , so it's very likely to underperform in the next ten years . Many other places haven't doubled so they're likely to out perform . That's how the property cycle has worked and will continue to work . re Liverpool , just because it' might become the 3rd CBD in Sydney , doesn't make it a good place to invest . If you do want to buy somewhere in Western Sydney for family reasons ( good reason to do that ) I think gach2 made some good suggestions . Other option ( though maybe too far would be lower blue mountains . Also somewhere like Yagoona ? My kids all want to have PPOR's in Sydney . They'll be saving in their offset accounts . Personally I have no problems with selling and paying CGT . It's worked well for us . If we'd never sold , we'd have a seriously scary amount of debt and wouldn't have been able to buy some of our best buys . Nowdays , with it being tighter to borrow , for me it makes even more sense to buy in areas which are about to move, let them move , sell, take your profit and move too the next place. Cliff
