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Discussion in 'General Property Chat' started by kerry kerry, 30th Nov, 2015.

  1. kerry kerry

    kerry kerry Member

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    Hi there

    After price drops in Sydney is it a good time to buy or just wait to buy my first property?

    A little background

    I want to put my door into the property market but since Sydney prices are too high and having lived in Newcastle for a long time I know the market there pretty well. My plan is too buy cheap IP in Newcastle ,may be a 2 bedder or a 3 bed house in the range of 300k- 350k and rent it and start building my equity to finally buy a desirable house in Sydney in few years time.

    So should i go ahead or wait a little bit longer. My budget it tight at the moment so I don't want to wait to get an affordable place in Sydney for which I have to compromise. We are a young couple with 2 small kids so we would have to sacrifice the current school as well and our accessibility to work.

    Thanks in advance
     
    Xenia likes this.
  2. Xenia

    Xenia Adelaide Property Manager Business Member

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  3. Property Twins

    Property Twins Well-Known Member Premium Member

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    Hi Kerry

    Welcome to the forum.

    You may have heard of the property clock - at what stage of the cycle do you think the Sydney cycle is at?

    How has the Newcastle market been over the last few years? Has it had much growth? What were the yields two to three years ago vs today?

    Cash flow is important to maintain lifestyle, and capital growth is what creates wealth.

    When @MsAli and I started, we looked at cash flow, which worked great as it helped us maintain our lifestyle, and the Sydney boom helped with the capital growth. This was our strategy in setting our foundations.

    You will need to determine your criteria for investing - whether it be buying in Sydney, or Newcastle, or elsewhere in Australia. In my view it would be good to determine what approach you want to take.

    Best of luck!
     
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  4. Property Twins

    Property Twins Well-Known Member Premium Member

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    In order to have a home in Sydney, it would help to work out which market rises after Sydney. Piggy back on that market, bring funds back to Sydney and then buy your home here, right when Sydney is at bottom / about to rise. My 2 cents :)
     
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  5. kerry kerry

    kerry kerry Member

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    Newcastle is not my main concern. The thing which is more important for me is to build my equity to get a PPOR. At this stage my focus would be first to have a positive or at least neutral or cash flow positive property and later obviously who would mind CG ;)

    I don't have an idea about the rental market in QLD or Melbourne but the properties which seems to be affordable to me they look good to me in Newcastle.. That is what i have personally seen in the areas i m looking into.

    The market in Newcastle doesn't look bad I would say, with steady price increases over the past few years. Not too much or all of a sudden surge but still nothing to stop you .
     
  6. Property Twins

    Property Twins Well-Known Member Premium Member

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    In your opinion, where do you think the Newcastle real estate market is in the property cycle? With 12 being the peak and 6 being the bottom?
     
    Last edited by a moderator: 30th Nov, 2015
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  7. kerry kerry

    kerry kerry Member

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    Don't know much about it but its definitely slowing down.
     
  8. Property Twins

    Property Twins Well-Known Member Premium Member

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    Hi @kerry kerry have you been on to Somersoft?

    Somersoft is this forum's predecessor, and has been archived. It has invaluable information, including interviews of PC members who have been there done that.

    It would be worthwhile reading through those so you can see what is possible.
     
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  9. kerry kerry

    kerry kerry Member

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    Yes I was a silent member over there too for a while. Yes sure I will look into it more
     
  10. Hodor

    Hodor Well-Known Member

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    Your potential plan is similar to my experience - My first property was in Newcastle, about 4 years ago now. I used equity gained to buy a PPoR in Sydney this year. Newcastle is slightly positively geared which is nice too.
    A lot of people buy a cheaper property or one that isn't their ideal PPoR with the idea of using it to leverage into the market they want to buy, it can be very difficult to out save the market so to speak.

    I dont believe there's a rush to get into Sydney as the market looks near the peak to me. I only bought as it was very important to me to love where I do and rentals were scarce in the area.

    Good luck and let us know what you decide to do.
     
  11. DiligentPM

    DiligentPM Well-Known Member Business Member

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