Should I wait or jump in to buy a PPOR in Sydney?

Last year my wife and I decided to wait out Sydney and invested in Brisbane instead. In hindsight we should've bought in Sydney first. We're still waiting for the Sydney market to drop before buying a PPOR but it looks like Sydney will continue to rise at least till end of this year, or possibly next.

Wondering what the savvy investors of PC would do in our situation. Would you buy a PPOR? Would you give up on purchasing a PPOR in Sydney and just invest elsewhere? Looking for options and reasoning behind them.

Thanks

 

It really depends on where and what in Sydney. Can you elaborate on your criteria?

 

I'll just leave this here.

 

PPOR is a lifestyle investment. It needs to be looked at much further than purely money.

IMO Sydney will sit around where it is for the foreseeable future. O/O rates and competition will continue to see demand but APRA has cut down a lot of people's servicing which will restrict further high price increases.
If you plan on waiting it out I would expect you to be waiting a long time.

 

I suppose troughs in Sydney aren't too long... 2004-2008 was flat, no growth. Looking at the graph of over the last 18 years, Sydney rises much more than it tends to fall. Whether or not buying now is a good time... sorry, I can't say.

 

We would be looking to purchase a house or villa with access to public transport around the Marsfield. Macquarie, North Ryde etc area.

 

Thanks for the graph

 

I'm slowly beginning to think that maybe we should set a criteria for our ppor and buy it now rather than later as long as the criterias are met. I've been hoping for prices to become subdued or drop, but the historical graph Steve posted paints a historical picture of prices increasing much more than prices dropping.

 

A lot if people would be waiting for the price drops significantly as numerous articles and papers suggested, I think majority of those people are still waiting to buy their ppor.

 

Very good location, right type of property. If you can get a house or town house in a good location with walking distance to train you will do very well in the long term

 

I can't see any of this area will drop in value regardless of what stage of the cycle. If I am looking to buy PPOR in these area, i will do it now.

When people talk about house price drops when the cycle turn, its more likely to happen in lower socio-economical area (eg. western sydney). As if you don't expect bondi house price will drop at any time.

 

My friend wants to upgrade from her villa in Eastwood to a house. But sje doesn't have the money

Agree with this.

 

I have got a budget of ~ $570,000.

I am struggling to decide between a 2 bedroom apartment in somewhere like Campsie or a house out West in Kingswood/St Marys.

 

I think people who buy a PPOR with a focus on investment are short changing themselves (and families). Money is important, lifestyle is more important.

I know for myself I am building an overcapitalized house that probably wont value stack off versus if I stripped it right back (as the land carries the value more than the home).
But what do you ultimately think is going to make my family and I much happier? Happiness then drives every aspect of your life, including other investments such as that in yourself, business, work.etc

Remember to look at bigger picture stuff than just "What is going to be worth more money in 5 years time". Do that with pure investments, not lifestyle.

 

Thanks. Some wise words there.

 

Prices in Sydney are well above an already steep trend line. But the problem is also that ownership and holding costs are very high - Interest repayments, rates, insurance, repairs and maintenance etc etc. Unless you use as an IP and rent out on a very high yield you need values to always move up. If they don't you are losing money hand over fist and would be better off renting.

Though who can say prices in Sydney will stop increasing - buying has lost touch with reality

 

It may still make sense for foreign buyers as the factors affecting foreign purchasers are mostly unrelated to those affecting local buyers.

 

Using this argument, one should spend the deposit on a long European holiday and then rent for the rest of the life. After happiness & lifestyle is more important.

For most of us, real estate is the only path to wealth (stock market is no longer a path to anything) and the more you delay your ideal PPOR, the better PPOR & better retirement you will have. It's all about delaying the gratification as far as investing goes.

I am contemplating splashing good money on a dream PPOR (with the downside of being unable to invest further for a few years) versus living in a modest PPOR and continuing to invest and the difference in your potential networth in 5 years with either option is staggering.

 

The sooner you commit to a PPOR, the sooner you'll figure out how to pay it off.
Sometimes this creates the extra motivation one needs to pay down non-deductible debt ASAP.

 

aside paths to franking credits, diversification, liquidity and so on and so on...