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Discussion in 'Investment Strategy' started by Desperado, 28th Jan, 2019.

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  1. Desperado

    Desperado Member

    Joined:
    13th May, 2016
    Posts:
    11
    Location:
    Sydney
    Hi Everyone ,

    My situation
    Being price out of a PPOR in Sydney I bought 2 IP in Brisbane at the end of 2016

    Now eventually / sooner the better would like to buy PPOR in Sydney.
    How should I go about doing this. Initially thought was to keep saving and eventually trade in 1 IP + savings for PPOR

    So my questions are,
    When should I pull the trigger on Sydney ?
    With the “exchange rate” between Sydney and Brisbane improving so much, how do I go about timing my trade
    Will Sydney look ok from an investment perspective anytime in the next 10 years?


    Thanks in advance
     
  2. PMC Property

    PMC Property Sydney, Brisbane, Newcastle, Toowoomba Business Member

    Joined:
    1st Jul, 2015
    Posts:
    1,013
    Location:
    Australia
    I'm actually in the same boat as this at the moment.

    I think there are quite a few variables to wait out this year before pulling the trigger on buying a PPoR in Sydney:

    1. Outcome of Royal Commission
    2. Outcome of election (and if (probably) Labor get in, when they will implement their NG policy)
    3. The credit flow - will it start to tighten after point 1? Get looser later this year?
    4. The impact of IO loan expiry period on many, many current loans. This is the real threat and probably dependent on point 3.

    Remember, there are tax penalties when you take equity from existing IPs to use for non-deductible purchases so obtain good tax advice before making these sorts of decisions. In short, if you pull money from a deductible asset to fund a non-deductible asset that portion of the loan will not be deductible again and can cost you heavily over the long term. It is usually better to cop the purchase and selling costs and start again to ensure your finance isn't back to front from a tax perspective.

    - Andrew
     
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