NSW Outer suburbs vs inner ring for buy and hold strategy

We can all see prices rising nationwide but specifically about the Sydney market, do you think if the strategy was to buy and hold, would it be better to invest in the outer suburbs vs the inner ring. The outer to middle ring suburbs eg: Northern beaches, Hills, upper North shore, the western belt eg Penrith vs your traditional inner west eg Balmain/Rozelle, inner east/city, lower north shore. In other words, is this a short term uptick for these outer ring suburbs given their relative affordability and after this boom they'll go sideways or retract for a lengthier period, and so the 'premium' inner city suburbs will still dominate longer term best gains?

 

If your budget allows, buy a house on land.
Try to buy near train stations but not so close that hearing the rumble of them going by is a turn off. However, if the property can be rezoned for higher density it's a huge positive.

After the early 2000's boom, the outer suburbs (eg. Around Parramatta) retreated approx 25% quite quickly (400k down to 300k), but I think there is so much demand for houses in Sydney that this time, the affordable end will largely hold up as other people still want to buy a home on land in Sydney. Many people who bought an apartment as their first home due to affordability still want to live in a house as they have kids. Btw, the area around Parramatta is more like 1mill for a house now, so long term, even if you bought for 400k in the 2000's boom, you would have done well.

 

BIG BIG question is how much is it going to cost you to hold in the premium suburbs vs the outer suburbs?

Are you willing to hold long term (i.e) 5 - 10 years putting in 1000s of dollars of your own money into just holding and hoping your house keeps rising at a higher rate than your holding costs?

 

Definitely agree on the landed property front. I guess the question is whether to invest in the more average affordable end or try to push to get in the higher end. That said seeing properties in the outer ring also now scoring mid 2 million makes me wonder what is considered affordable.

 

Maybe I'm an optimist and think it will keep rising? I'm sure there will be periods of flattening and even corrections. I guess if possible, we want to buy something that will reasonably stand the test of time? It's expensive to buy and sell, which i guess if you're an expert at timing the market, may work out well. I don't think my partner and I are savvy enough to be able to sell at the peak and reinvest that buy buying back post correction.

My long term goal is to accumulate a 10 million asset base, which we can then gradually pay down and hopefully will by itself keep growing to stay on top of inflation and land tax changes/regulation.

A lot of the sages here such as @John_BridgeToBricks, from what I read, are suggesting this to indeed to be a biggest boom of the next decade or so, so I guess its not per se FOMO that we want to get in, but if it can help us move closer to that goal, I'd bite. Also want to do it before they clamp on investor lending LVRs, so we would have some time to build equity with the property growth and paying down some of the principal so we could still successfully refinance with a lower LVR when interest rates move up, and still service the loans. If they abolish negative gearing for IPs, then we would likely be in hot water as we're purchasing in lower yielding but hopefully higher capital growth areas.

Even in the outer suburbs, what's the rental yield these days? For landed property