Old unit in Parramatta(NSW), hold or sell?

Own an IP in Parramatta, 2 bedrooms, 1 bathroom, 1 car space, with lift. A 30+ years old unit. Walking distance to Westfield, near Parramatta High School. Bought at $500k. High amount in strata ($1200pq) and repairs, but low rent and low amount of depreciation. Basically negative cash flow.

A while ago, a developer contacted the strata and express their interest to buy the whole building and knock down for redevelopment, they offer $660k for my unit. Ends up majority of owners disagree and the plan didn't go ahead. (*I cannot sell individually to the developer)

Recently the similar unit in Parramatta is around $450-490k, the price seems to be the same in last 5 years, and keep decreasing since COVID outbreak. I cannot see the area will be beneficial with the works of Sydney Metro and also the Parramatta CBD development, maybe it's a bit far from the Parramatta river?

Just want some advises about the market of Parramatta, in particular, those old units near Great Western Hwy through Mays Hill. Will the market be flated for next few years? Or price keep decreasing for next few years?

I am thinking whether it's worth to keep it or sell it. I know there is no right answer on this question, any opinion will be much appreciated! Thanks.

 

If you have something better to do with the money, I’d consider selling. I can only feel the growth will continue to be slow. Other more attractive units are going to keep coming up, and your place isn’t so desirable. Parramatta High school isn’t bad from my knowledge, it’s even semi-selective from what I know, but it still doesn’t have the reputation of the schools in the Hills or Northern Districts. I’m assuming the other owners are still going to be in no mood to sell to a developer soon. Put the money in a house in SE Queensland or a house in Perth or Adelaide?

 

Sometimes it's a hard decision on whether to hold or sell. Have you thought about where you would put the funds if you did sell?

 

Parramatta is flooded with older home units and at the moment new rentals are getting less than the same unit did two years ago.

if you can keep up to a decade I believe they will have stronger growth than most other home units, with low returns.

 

I bought an old 2/1/1 in Nth Parramatta in 2013 for $292K.

I renovated and rented it out from 2013 to 2019 for $380... In 2020 I had to drop it to $320 to get a tenant.

In 2018 the next door unit sold for $570k.

I just sold mine 3 months ago for $500k.

It was incredibly hard to sell, these apartments are a dime a dozen in Parra with no real increase in value on the horizon.

I'd be looking at putting my money elsewhere personally.

 

Depends on what you are thinking of doing with the proceed fund from the sale. If you see some good opportunity now that have more potential, go ahead. But if you are not certain what you will do with it, then holding would be better option.

 

Given the price of these apartments the access to transport and amenities they should be incredibly popular with first homebuyers. Doesn’t seem to be happening though. Seems parramatta will be on a slow decline for some time to come

 

I think there is an oversupply of units in parramatta and i think there's a chance that units will be on the nose for a while as they have been lately. There's probably exceptions with those small unit blocks in sort after areas, but i don't think parramatta is one of those areas. But i think it's good that yours doesn't seem to be part of a large high rise block.

 

I just think this part of Parramatta near Great Western Highway is less desirable. I’d prefer the north side of the river if I had a choice of the two. But I’d go for house on land now, even though it’s more expensive. Long term, the house on land will grow more than a unit.

 

I suppose your options are

1. Sell and move onto something else eg house, which might go up more gains in the near future or

2. Hold and pray that unit prices move out of the doldrums and give long suffering investors (mysel included) some decent capital gain.

Which option to take will require a crystal ball IMO.

 

Agree with comments and general sentiments towards units.
I have learnt a thing or two is - units usually won’t appreciate well in a long term (compared to houses) however a very selective units may do well in a short term flip if you can get under market value.
https://www.domain.com.au/news/rive...smh&utm_medium=link&utm_content=pos5&ref=pos1

 

This is absolutely bonkers.... Makes absolutely nil sense!

 

I agree with the above "absolutely bonkers....Makes no sense" comment not just because it gave me a chuckle. I think market value by definition is what someone pays for it, such as you. I'm no flipper, but i think you need to take into account capital gains tax, and costs such as stamp duty, mortgage insurance if applicable, real estate commission on sale, and other costs. As a curiosity i often wondered of the merits of flipping. I think i'll start another post on this.

 

I have seen few people did well with units (not all) in a short term even after in/out fees (bought under market value and add some) - flip wont make sense when you are time poor on high tax bracket

 

Could you or someone please advise in the percentage terms... what is the general cost of buying or selling property excluding any government benefits and tax component as it varies from one person to another? My rough calculation would be 5% of purchase price and 5% of sale price.

 

This is a how long is a piece of string quesition. One big variable could be the Agent you use, and sometimes going with the cheapest will not give you the best results.