NSW St Mary's future growth?

Hello all,

I bought an investment property in St Mary's just before the area was to be rezoned to R4 High Density and have almost doubled my money in the 2 years since. I was planning to develop the property into a boarding home with 24units but after seeing some of the tenants there I gave up on that idea and changed my strategy to hold and wait hoping to buy the neighbour so as to give me the required land size to get a DA for a unit block.

Is there anybody on here that is familiar with that area and has an insight into it? I'm in two minds whether I should still hold and wait or it's time to sell and move onto something else. I know St Mary's keeps getting talked up as one of the hubs for Badgery's Creek Airport.

This is my first venture into a prospective unit site so don't really know much in this area. Generally is it better to hold onto a unit site till other units are being built around with a sit and wait approach or better to take the profit and reinvest it? Would be great to hear from someone with some experience.

 

I'd personally hold. There is a lot of infrastructure happening in the West and not just the airport in the next few years. Job hubs, roads and population growth is still going strong.

Is your block walking distance to Queen St?

 

I would hold and build. I am currently talking with council to knock down my place in St Marys and build a duplex.

Colyton has taken off bigtime. It seems like more people prefer it to St Marys. The house prices in Colyton has caught up to St marys whereas in the past there was a significant difference between the two suburbs.

 

I'd be tempted to cut and run but you need to ask yourself the following questions

- did you have the financial ability to build 24 units even if you decided you didn't want to
- is there a possibility of getting a higher price if you got DA now and then sold it as an approved site
- do you have the financial ability to buy out the next door site if it comes on the market
- how likely is it that next door will come on the market
- are prices likely to keep rising or is there a chance of correction
- how long can you continue to hold this property as is
- if you bought next door do you have the financial capability to fund or get loans for the even bigger development

and most importantly
- is holding the site stopping you from using the current profits from it in another project that is doable now rather than maybe later when you can buy a neighbour

 

We recently sold some of our Sydney portfolio - but decided North St Marys was one we would hold on to. This was based on all the infrastructure going in to the area.

If I had an R4 site in St Marys and could hold it - better chances of it increasing significantly in value compare to the chance of it dropping significantly.

You have the opportunity to see what happens as you are not forced to sell - just be ready when the neighbouring blocks come up for sale or a developer comes knocking..

 

I would ask the exact same questions.

Its one thing having a site with huge potential, but if you can not execute the end plan then that is a different story.

 

st marys is a **** hole to what is used to be 10-20 years ago. It is following the downward spiral of the druitt. Colyton is younger and also closer to st clair which has better shops etc. Im not sure what is driving up the prices, colyton looks to be closing the gap vs penrith (south) since last boom. not sure why??

as for st marys it will have another round of infrastructure boost if the north south rail comes in. plus the airport but thats still a few years away. but there may also be a chance of oversupply?? St marys has bucket loads of medium density etc going in everywhere

 

I'm not worried Colyton Vs St Marys. I got places in both and bought them for around $210k each. 650+ sqm and 14m frontage so developing wont be an issue at all. I'm just having some issues with stormwater drainage approvals currently which should be sorted very soon.

So I've tripled my money and If i develop I will probably more than 6 x my money post development easily.

You might say St marys is a ********* but let me tell you when I bought it back when I did it was ALOT worse than it is now. And I mean ALOT - that was 10 years ago now. I've seen it grow into a livable area now and heaps of ethnics there (Indians/Arabic and SE Asians) - which are all nice and hard working people.

Both suburbs are increasing month on month for the last 18 months already. I'm waiting for RE to update their figures prob middle of Oct and I'm sure it will show an increase in moving averages again.

If i owned a place in these areas its a good time to value add now. There is some very decent profits to be made if you bought in well.

 

Thank you all for your thoughts

Yes it's 50 metres from Queen St and not much further from the station.

In answer to your questions Westminster:

- did you have the financial ability to build 24 units even if you decided you didn't want to?
The funds to build was not really the issue. I would have had to sell all my other investments to build but it was doable although it would have put all my eggs in one basket per-say.

- is there a possibility of getting a higher price if you got DA now and then sold it as an approved site?
I looked at going through with the DA for the boarding homes then selling but the feedback I've been getting from local agents is that it is an untested market and they don't think there would be much demand for an unbuilt DA'd Boarding home complex.

- do you have the financial ability to buy out the next door site if it comes on the market?
- how likely is it that next door will come on the market?
Yes if next door was to come up for sale I would be able to buy it. I've actually approached next door to buy. It is an elderly man who is not interested in selling. Wants to see out his final days without the fuss of moving etc which I understand.

- are prices likely to keep rising or is there a chance of correction?
- how long can you continue to hold this property as is?
Thats the question I ask myself and why I put the question out. Unless it continues to grow at a minimum of 10 percent p.a then I think it might be more worthwhile in selling and reinvesting elsewhere. I honestly have no idea if that return is achievable in the current climate.

- if you bought next door do you have the financial capability to fund or get loans for the even bigger development?
Yes through loans and other investors.

- is holding the site stopping you from using the current profits from it in another project that is doable now rather than maybe later when you can buy a neighbour?
If I was to sell I would repeat the process. There are some areas I have my eye on that are in the process of buying rezoned. Currently the price's do not reflect that so there is potential for a quick profit assuming it is rezoned.

 

Nice work. I remember a few years ago when they were auctioning all the damaged and fenced off properties for well under 200k around Tregear, Willmot and Colyton. There was one that sold just over 100k. By the time I decided to attend those auctions the price had moved to over 200k and I couldn't bring myself to spend that much knowing only a month ago they were selling alot less. I kept holding out to get one under the 200K mark. Obviously they only kept going up since then. Im kicking myself now.

 

Your telling me. I remember I offered $165k for a house in St Marys that needed some TLC but was mostly cosmetic. $20k-$30k cheap reno and I could have rented it out. Owners wanted extra $10k but I wouldn't give it.

Now its probably $650k. LMFAO. Wish I wasn't so young and naive back then and had more balls. Fair enough I think I was making like $35k back then though first year uni - hahaha

 

According to our head of valuation, St Mary's area is the next hot spot. Basically he is very optimistic for the whole of blacktown area and St Mary's.

If the airport do eventually being completed it will give St Mary's another massive boost. But currently it is uncertain.

I have been looking at St Mary's when it was sub $200k. And like some people posted above I wasn't game enough to buy back than. Now I'm regretting.

The thing is with St Mary's/Tregear/Wilmot areas, the rental return just doesn't stack up for me now to buy and hold. When other states seems to be offering a far better option with a much higher rental return.

I'm keen to hear more people to comment on St Mary's future prospect and any strategies they are applying.

 

I agree for the price it has a terrible rental return.
I think St Mary's does have potential to be the boutique strip of the west. You have the big shopping centres not far in Penrith and Mt Druitt so that would stop any major shopping centres going in there. I think that's a good thing. Queen St has the perfect layout to make it a dining/cafe precinct. Very wide footpaths that would easily accommodate outdoor dining.
In saying that though there still needs to be a major social-demographic shift in the culture there.

I cant see that happening anytime soon. Ofcourse im generalising here but I found that most of the applicants to rent my property were unemployed and on benefits. On top of that, quite a few single mothers with domestic violence orders in place looking to get away from their ex partners. It was actually quite sad.

 

The demographic shift is coming.....but it's going to take a long time.

I've been active during two booms in this area. Last time the upstart of the boom was mainly investors with a smaller shift towards FHBs at the tail end. This time there were a lot more FHBs. My tenants have been a mix. Some welfare recipients & some hard workers.

 

Nice

I think the demographic shift is already happening. As @skater said it will take some time but it will happen. I've never had an issue with tenants but with all the new units coming off the plan I don't see rents rising anytime soon.

I actually have a older 2 bed unit becoming vacant in three weeks so I'll see how long it takes to rent.

 

There will be an upswing in houses. Units are different. They're competing with the Granny Flats as well.

 

Good luck with it. Hopefully you get someone in there with minimal fuss. Let us know how you go. I'd be interested to know how long it takes and what kind of applicants you get.

 

penrith council is starting to push to tidy up queen st and some works have begun. There is potential for queen st to gentrify but if it happens it may be a boom or 2 away. once jordan springs and ropes crossing etc become "tired" (10+years?)people will start looking to st marys to tart up the older houses and a way to get in the market. The general layout with wide streets etc are great but how many are empty atm?? people still want the westfields etc, it will be a while before theres a "newtown trendy cafe strip" upgrade. The rail and airport will boost it next boom but will this be more cheap accom or gentrify??
and with council anything if they are talking about now it's 3+ years before anything will actually happen!

 

rail link to complete the loop from north-west to south-west
This is talked about being a tunnel under st marys. but it will be a key station interlinking the penrith line


and this is interesting

not much yellow in there

 

I'm looking to develop in the near future, maybe we can work together and screw prices down on builders...