NSW PPOR inner Sydney house $2m budget

Hi all

Looking for advice from the experts on the forum. Buying our first home and PPOR in Sydney and am overwhelmed by the booming market. We have $2m budget (which I thought was decent until we started looking - so many properties selling for $300k+ vs the buyers guide pre auction). Early 30s couple, no kids, enjoy amenities such as restaurants, nice pubs, gyms, 20 mins drive to beach/harbour. Both work in the CBD and will be expected in the office 2-3 times/week and work from home the rest of the time. Looking to hold the property long term (10+ years) and want to buy a house.

We are looking at Glebe, Redfern, Darlington, Chippendale, Surry Hills, Paddington, Balmain, Rozelle - pretty much will consider all areas that are close to the CBD.

Are there areas you would recommend as better 'value'? I appreciate Sydney is not great on value at the moment but Sydney is our home and will be our long term PPOR - so trying to pick the best we can within the market.

What would you prioritise on that budget in inner Sydney? Appreciate we can't have it all (great land size, parking, renovated, 2 bathrooms). A second bathroom vs parking? Larger land size but perhaps dated? Focus on location (e.g. Surry Hills and part of Redfern) vs a larger land size around Newtown/Marrickville. Trying to balance investment value and lifestyle but finding it challenging to judge.

Any insights would be appreciated. Really appreciate reading the forum - and learning more everyday.

 

The main compromise in those areas is going to be location vs. size really.... you'd need to compromise on size/parking in Balmain where as the further south you went (south of Parramatta Rd tends to represent better "value" and out into Petersham/etc) you'd pick up something with an extra bedroom/parking.

Do you guys plan to have any kids? That might factor a look in to get into a good catchment area.

 

I think pretty much all those suburbs are fine. I would try to avoid being under a flight path, ideally have a parking space and be on a nicer street and with the amenities nearby. No visual blights. A third bedroom or second bathroom is definitely great to have but then it comes down to can you afford it in your budget.

 

I remember this analysis paralysis with my first property. I spent a long time looking at a bunch of houses close to my budget in a range of suburbs 3-15km from the city. At the same price point, the house that was 3km from the city was obviously very different to the one 15km out. I kept contracts from years ago, and if I look at estimated values of each now, they are remarkably similar.

My point is, don't overthink because any differences in growth are generally small and tend to even out over the longer term. It will be your home, pick what fits your bill.

Driving around looking for parking in Surry Hills would for me being an extremely annoying endeavour. But you may only drive once a fortnight, so on street parking may not be a big deal. If you have a bathroom hogger at home, sharing may be unbearable. If you have handy skills, a fixer upper may be good value if you are willing to put up with living in a dump initially.

Find a place that you are serious about, visit at different times during the day/week and hang out there for a few hours. Listen for noise, observe the crowds, experience the local shops, imagine you live there. If it feels right (obviously do the structural and conveyancing due diligence too), bid for it and be prepared to lose a few times before you secure your home.

 

Thanks, great points. I will make sure to check school catchment of the property.

 

Thanks for the advice. Yes, aircraft noise can be quite bad in Marrickville. We would ideally love parking too and agree a third bedroom or second bathroom is ‘nice to have’ rather than a ‘must have’.

 

Thank you for such a thoughtful reply and thanks for the insights on similar growth across a range of different properties.

You are right - driving around finding parking can certainly be annoying in Surry Hills! I just did that a few days ago for an inspection there. We value a parking space over a second bathroom but can be flexible.

Hopefully we will have some luck and will be able to secure our home in the next few months. I will provide updates here.

 

Good stuff. Btw, I'd also choose a property that has some accessible outdoor private space with sunlight. Make that a must have for me.

 

@Gockie @maroon @Morgs how much do you guys reckon this will go for in Balmain (link)?

Of course I will also be doing my own due diligence on comparables but keen to hear what your thoughts.

 

It’s hard for me to give any estimates. Even in my own local area prices vary so greatly possibly + or - 600k. I have RP data but I don’t know if it will be accurate for this property. I have to say, it’s very well presented and it would push the price up.

I have heard that more properties are for sale now though, so it should slow the extreme price increases.

 

I can send you stuff via PM.

 

Even the south west side of Victoria road in Rozelle is quite noisy. It’s a great spot but the planes fly straight overhead. On the Balmain side of Victoria road I’d imagine it’s far less impacted. I do believe the prices are generally higher though.

 

I'd be surprised if it sold for anything less than $2M!

 

I agree with Gockie - massive price variations between similar properties recently due to emotional buying.

Not sure what the post lockdown market holds. There's been a spike in properties on the market. Who holds an auction on a Friday afternoon?! If everything looks in order and you like it, definitely give it a crack at your 2 mil budget.

 

All those suburbs are good and I’ve lived in most of them. You’d be crazy to think of owning a car, just rent when needed.

rozelle stands out then if you’re looking there why not consider Drummoyne? It sounds like you’re really flexible, so from your list just look at everything in that circle, and try to find the nicest house with the best floor plan rather than the best suburb…

Alternatively you could look at future infrastructure and how that may positively impact any of these suburbs… They are going to continue fixing up the waterfront around Glebe… Motorways? etc

My dad always said to me a good location is better than a view. The house that is as close to perfect as you can get with a great floor plan and lots of space is better than a fabulous location or amazing view… I still don’t know if I agree with that… Because I think that a beautiful view of the harbour or the city is really heart stopping. Light is so important in a house. And finally, walkability is EVERYTHING!!!

And if you want to try to future proof your purchase, I always look for wheelchair accessibility, how will I feel if I’m 75 after a hip replacement in his living room? Etc

 

Interesting thought about wheelchair accessibility. Loads of homes are not wheelchair friendly at all. I suppose most of the time you can put a lift in if it's a multilevel home (but then again, you'd have to check for door widths, kitchen setup etc). For me, after ankle surgery February last year my biggest home difficulties day to day were:
1. Taking hot microwaved food and moving it someplace while on crutches. I managed but it was difficult.
2. Getting in and out of my shower. The barrier is only about 10cm, but getting across that was really difficult and a bit dangerous as showers can be slippery.

 

Yikes. Are you sure you want to spend $2M on your first home? You’re not getting much value for that kind of money at the moment in those areas.

Obviously I don’t know your financial situation, but assuming $2M is on the upper end of what the bank is willing to give you - I would either:

1. Buy a more conservative PPOR for $1M and buy another IP for $1M. Start building some passive income if you haven’t already
2. Rent wherever you want to live and invest the $2M elsewhere

Feel free to ignore me. Just thinking out loud here.

 

Good point about the person being a FHB buyjng for a $2 mill budget.
I do hope they have huge savings because repaying that much is a huge ask if they only have regular jobs imo.

Problem is though, the sorts of properties you can buy at the $1 mill price range is either not in a wonderful location or you have to buy a apartment, and I don't see apartments making as many gains as freestanding or even duplex or terrace houses. A garden apartment would be ok but maybe $1 mill isn't enough for that either for where the OP wants to live.

One good thing, the places the OP wants to buy, they'll always be sought after, so even if they need to sell a couple years down the track, there will always be people wanting to buy it.

And, another important issue is, stamp duty for a $2mill home is around $100k.... it's not chump change.

 

Don't forget that this property is just above the White Bay Passenger Terminal - there are no whopping great cruise ships sitting in the harbour, running engines 24/7, spewing out diesel exhaust, being serviced for countless guests with commercial food & other supplies being delivered (people soon forget - out of sight/out of mind - chat with the locals).

Who wants to live in a $1m suburb which is now confined to the outskirts of the city, the south-west or @datto's backyard (though it does have luscious green vegetation & the lawn's well tended)?

 

Thanks - appreciate your response. We have talked about Drummoyne actually, and will consider if we don't find a nice house in the suburbs mentioned.

Also looking at light and walkability . In our budget unfortunately I don't think we can look for a view - but that would have been super nice to look at the harbour!!