Perth versus Sydney

Hi Everyone!!

I just want to here other members thoughts about where they would buy if they have a budget of 500k. If you had a choice about whether to invest that in Sydney or Perth, what would you choose? This is for my brother who is a teacher so the pay would be similar in both locations. My brother lives with me and pays minimal rent(basically free) which I m ok with but would like to eventually own his own PPOR in either Sydney or Perth because these are the only two places he has family in and he would like to be near family.

Obviously he would like to see his PPOR grow in value over time so can members please share whether Perth or Sydney will be the best place to get growth in the next 10 years? We are having a hard time trying to work out which city is better poise for growth in the next 10 years.

Thanking everyone in advance

 

If its for a PPOR, I would have thought lifestyle factors would be way more important than attempting to use the crystal ball for the next 10 years.

 

He would have a better lifestyle if the PPOR he purchased increases in value over time. Everyone that buys a PPOR hopes that their place will increase over time

 

For 500k in Sydney you're stuck with apartments or old 2 bedroom units in Punchbowl. If you want a house be prepared to live 50km out of the CBD. 500k in Perth will give you much greater bang for your buck and the lifestyle is much less of a rat race. Personally if I was a teacher I'd be moving to Perth!

 

Perth is the obvious choice for the following reasons:
1. Budget is an issue, 500k can buy you a house in Perth or a nice apartment near the city. 500k lucky to buy you a couple of pints in Sydneys these days... yes the beer is actually cheaper Perth now compared to Sydney. Seriously though, the quality of life from a 500k purchase in Sydney would be average. Either way out of town or something small.
2. Perth had massive house price rises from 2001 to 2007, the last 10 years has had flat to little growth, area dependent. Sydney has had similar massive price rises in the last 5 years, flat the 10 years before and boom before that. The cycle would suggest Sydney will experience no growth for a while. Some will argue against this on the basis that Sydney has billions of dollars of infrastructure projects being carried out in the next 5 years (before work cliff in 2022), but also remember Perth still had a mining boom with billions of investment up until 2015. House prices generally rise at the start of this investment cycle.
3. Perth is not dependent on foreign property ownership, unlike sydney where this has already started dropping away.
4. And finally I'm my opinion Perth is like a sports team that is going through a rebuild based on solid foundations, the rebuild will be slow but fundamentals are there. Will it boom again probably not, but investment in agriculture, tourism, infrastructure, mining (infrastructure for replacement supply and maintenance), public services, immigration and a return of the temporary workforce that recently went over east will mean population growth will return to a healthy level and steady low end growth is assured. A floor under rents will help achieve this.

It's not brainer to me just comparing what can be purchased at the moment for 500k

 

If he has a stable and steady job in Perth, then there is no question right now is the perfect time to buy in Perth.

 

Who'd move to Sydney? The harbour city has priced itself out of reach | Greg Jericho

"The working class have been priced out of their own suburbs. I moved back for one year and did nothing but scramble to pay the bills and sit in traffic. I'm never going back, it's bloody awful. Every second person I met in western Sydney wanted out".

 

Is 500k the max purchase price your brother is willing to pay? I would had thought a FHB on an average wage between 60-70k would be able to afford 555-600k. If he willing to stretch his budget a little he could get a decent house in Perth. I would say buy the closest house to the CBD he can afford on 600m2+.

 

For me it would be Perth every day of the week.

$500k will get him:

- Modern inner city apartment, 1 or 2 bedroom, on site pool, gym etc.
- Brand New Home and Land package on approx 350-500m2 15-20kms East of CBD ($350 - $500k)
- Existing property 20kms North of CBD 3-4 bedroom with swimming pool 5 minutes drive to the beach.
- Townhouse and even smaller stand alone property 5-7km from CBD

For growth over the next 5-10 years I would be thinking looking at the bigger blocks close to train line and freeway access within the 20km radius and coast side of freeway. Or stand alone property in the close vicinity of the city with a big enough block to comfortably subdivide at a later stage.

 

Yes 500k is what he is willing to purchase, he is currently in negotiations to buy a fibro house on a 450 SQM block in Lathlain. He can spend more but I advise him to buy an old place an use some reserve money to create some equity

 

Yes he has chosen Perth and is currently looking at Lathlain

 

Wow that would be good buying if he can get in there on 450m2 for under $500k. At present there are only 2 on RE.com which are around the $500k and smaller.

 

@2020vision
If $'s weren't a factor what area in Syd would he like to live in for lifestyle?
Being an ex-Syd boy I could give an idea of similar lifestyle over here (e.g. Cronulla similar to Mandurah), although its like 20-30 years behind over here so less of a rat race etc.
Teachers pay over here "maybe" better also.

 

Lathlain has a lot going on. Lathlain oval is being redeveloped and it's close to Crown and the new stadium.

 

Would've thought Mandurah would be more like one of the beachside suburbs in Wollongong?

 

The gong is further south, Mandurah has similar re rivers/waterways and distance to city etc

 

All else being equal I would have thought Perth by a mile.

 

how do they break out of this? Yes, there are jobs in sydney, but wage growth is next to zero whilst RE prices still easily outpace wage growth.

To get to the original questions, for 500k- definately perth.
If it was a figure next to the median for sydney -900k-1m or so, then id buy in sydney.

 

For 500k Perth is a no brainer.

Sydney is unfortunately now an overcrowded city with infrastructure made for 2-3million and if the house prices dont kill you, the traffic jams will. Parramatta road is a virtual carpark, most of the time, most days.

Unfortunately IMHO australia's economy is not gonna be booming anytime soon with the ever increasing budget deficit and a divided gov, so for the next 10 years things are probably not gonna be as good as they were the past 25. So I guess Perth or Sydney you wont be making much. However for Perth, most of the downside is probably priced in.

 

Probably people in Sydney in 2003 felt the same way. By 2012, maybe not so much.