PPOR with $1.2m in Sydney

Hi guys,

I'm looking for some advice on buying a 3 bed PPOR up to $1.2m in Sydney. We're a dual income couple in our early 30s, currently living in a 2 bed apartment in Randwick (bought in 2019, hoping to keep as IP) and looking to upgrade to something bigger in the next year or two as we plan to start a family in the next few years.

We are tossing up a few options:

1. Buy a 3 bed apartment around Lane Cove / Lower North Shore area. We love this area and would prefer living somewhere close to the action like this (lifestyle and commute is important to us), but I worry that we might one day outgrow this and want more space for the kids.
2. Buy a 3 bed house in the Sutherland Shire (Oyster Bay / Como) area. Nice safe leafy area and we would have more space, but might find the lifestyle too boring and longer commutes.
3. Buy the house in the shire and rent it out for the first few years, while renting where we want to live (lower north or eastern suburbs), then moving into the house in a few years when we need more space. I'm thinking this might be a good option as I think we might get better CG from the house vs apartment, while still getting to continue the lifestyle we want for the next few years.
4. Vice versa - buy the apartment to live now, and rentvest to a house later? Think this might be worse financially though.
5. We've looked at a few other options (e.g. apartment in Dee Why, stretch the budget to townhouse in forestville, house in Bexley) but these seem to have more drawbacks than the above options in terms of distance or community vibe for not much extra space.

Ideally we'd like to keep this place for at least 10 years, after which we might try to upgrade to a townhouse/house in a more desirable area (north shore or northern beaches) if we can afford it. But I'm not sure how feasible this would be with likely slower growth over the next decade.

Any advice would be greatly appreciated!

 

Wow, I could write a book on this as it very closely mirrors...

Personally went from a 3 bed unit in Mosman to a house in the Shire for the reasons you described.

We buy houses for clients around $1.2m in Como and Oyster Bay (and other shire suburbs).

Tussled with no.4 option quite a few years ago.

Had a friend who bought an apartment in Dee Why (and I've mentioned this in other threads) which wasn't and isn't the best option IMO.

Honestly don't know where to start!

- Andrew

 

We were in a similar position last year. We would have ideally liked to have a buy a nice townhouse / large apartment in the lower north shore, but didn't want to then sell in a couple of years and buy a house further out later (And thereby paying stamp duty twice).

We decided to buy the future house and rent it out, while taking advantage of very good rents for apartments in the meantime. Bonus is that rents for houses have been strong and the possibility of them being neutral geared at current interest rates is another bonus

 

Hi Talina,

Thanks for your post. It's always difficult to answer the "where should I live" question. You have mentioned some fantastic suburbs.

If I may, is your question more about which region will grow the most? Where is the value? Which area is most livable? With PPOR questions, there is a lot of subjectivity, so I just want to make sure that we are answering your question.

Kind regards,
John

 

Hi John,

Thanks for the reply. My question is more around growth potential - would buying the apartment closer or house further out likely lead to a better return down the line?

As I've mentioned I'm also open to rentvesting one way or the other - although I wonder whether is this a sensible thing to do, would the additional real estate fees mitigate any benefit here?