Rent in temporary city and buy in hometown or buy here?

Discussion in 'Investment Strategy' started by Raphael, 24th Sep, 2017.

Join Australia's most dynamic and respected property investment community
  1. Raphael

    Raphael Member

    Joined:
    8th Oct, 2016
    Posts:
    22
    Location:
    Sydney
    Hi all,

    My wife and I have finally generated a decent deposit (and income levels) to obtain a house with a purchase price of about $600,000. This is about 50% of our total borrowing amount available.

    We are first home buyers, originally from Brisbane (and plan to go back one day) but currently working in Newcastle. We're not sure whether we're better off continuing to rent in Newcastle and buy a house as an investment in Brisbane (to move back into one day), or buy a house in Newcastle and stop renting.

    Only thing throwing me is that we have our stamp duty waived on an owner occupier loan, but not on an investment property.... Any thoughts? Could also look at buying here, then buying an investment property AS WELL in Brisbane?

    Cheers.
     
    pwnitat0r likes this.
  2. Propertunity

    Propertunity Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    3,476
    Location:
    NSW
    How long do you plan to live & work in Newcastle?
     
  3. Raphael

    Raphael Member

    Joined:
    8th Oct, 2016
    Posts:
    22
    Location:
    Sydney
    Hey Alan,

    No idea to be honest. It's a great city to raise a family and has a nice low cost of living, but it will all depend on the job in terms of satisfaction and my performance (which I started 3 months ago). Ideally, hoping no more than 5 years max.
     
  4. balwoges

    balwoges Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    1,700
    Location:
    Lake Macquarie
    Wait for a few more months to make sure of job satisfaction [yours and your employer] then buy in Newcastle where prices will continue to rise more so than in Brisbane.
     
    Raphael likes this.
  5. D.T.

    D.T. Specialist Property Manager Business Member

    Joined:
    3rd Jun, 2015
    Posts:
    9,189
    Location:
    Adelaide and Gold Coast
    I'd buy in Newcastle if you can find something you like in your budget. And if you end up moving back to Bris (or anywhere else) you can decide then on selling it or renting it out based on your circumstances at the time. You can never really tell what the future will hold.
     
    Raphael likes this.
  6. Propertunity

    Propertunity Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    3,476
    Location:
    NSW
    Renting will be cheaper than buying and then having to sell in 5yrs or less time. Of course if you intend to keep a PPOR as an IP, then no issues in this respect. You'd need to factor in if the market stays flat or falls slightly in the next 5years to see if it is worthwhile. You will probably not qualify for a mortgage with less than 3 months in your current job for now anyway. Take your time in deciding and choose carefully if you decide to buy.
     
  7. Ald

    Ald Well-Known Member

    Joined:
    6th Jul, 2016
    Posts:
    775
    Location:
    NSW
    Here is the only advice you should follow.

    Carry on saving cash my friend for the next 2 years.
    Newcastle has peaked, it's way to expensive for the local economic conditions where wages are lower than everywhere else, and it's got nothing going for it long term.

    The cash you save will save you hundreds of thousands in interest later. Do the calcs on the money smart calculator and if you do one thing buy the barefoot investor book.

    If you want to buy a house, buy one where you intend to live for the rest of your life.

    Newcastle will be stagnating and dropping in price within a year and the madness on the ground has stopped. The bargains are coming. All the apartments being built have been sold off the plan, and when the apartments are built expect fire sales in that new environment.

    Listen to this:

    Interest rates in Australia are low because Australia is experiencing an economic crisis but one that is being hushed up by goverment who is keeping everyone employed by building housing and infrastructure. They have no plans to innovate yet and know that in 35 years time people who bought in Sydney and Melbourne most will not have managed to pay off their mortgage and will have not enough money for super. They also know that property prices for the next 20 years will stagnate and there will be no capital growth. So they will just build and build apartments to keep people employed and bring in waves and waves of immigrants and pass the buck until within 30 years time you have a a revolution.

    Massive amounts of people sleeping on streets in Sydney. That tells you the future.
     

Build Passive Income WITHOUT Dropping $15K On Buyers Agents Each Time! Helping People Achieve PASSIVE INCOME Using Our Unique Data-Driven System, So You Can Confidently Buy Top 5% Growth & Cashflow Property, Anywhere In Australia