Syd inner west apartment

Hi everyone,

Looking to spend ~800k on an investment property in Sydney. Still in the early stages but came across this place: https://www.realestate.com.au/property-apartment-nsw-summer+hill-136263706

The property is only a building of 6 and is located on a quiet street, near the station/cafes/shops etc.

Main question is what do people think about buying a unit like this in an area that's mostly houses? Not sure if that limits cap gains potential (i.e. owner-occupiers / young families won't be interested in a smallish apartment like this).

I see it last sold for 572k in 2011 and they're asking 700k now (surely that's an underestimate - I suspect 800+. Otherwise, that is not great growth!).

Thanks!

 

Those sorts of properties are quite popular in inner E/SE Melbourne and have a good history of capital growth (no value in the building itself, but you'll want to make sure it's being maintained well including gardens etc, which this one seems to be).

Not from Sydney so can't say whether location is ideal or not (appears to be). For $800k you might be able to find similar with a separate dining room that can be used as a 3rd bedroom. Flexibility like that can make it more attractive as a rental.

Example given below.

 

I found this example (1/32 King Street, Ashfield NSW 2131 | Domain) which is a good example of what I'm talking about. Having the backyard is a huge plus too.

 

I'd be surprised if it's not $780-830k - Summer Hill is a good area (not quite inner-city) but still has a transient population. Nowraine St is far enough away from the boarding houses but there are aeveral new ones going up as well.

@tedjamvor - the $800's is pretty low for Ashfield duplex esp. the ground floor.

 

I think this price guide is a bit misleading. Closer to $1m is more accurate and I wont be surprised if it sells for more.

 

As I said, not from Sydney so don't know the area well. Still think something like that in that area if it can be found in OPs budget is best value for money imo.

 

Add 20% to Sydney price guides. Often higher with this particular agent.

 

The place sold for 572k in 2011. Kind of glad about people thinking it's worth ~800-850k rather than 700k quoted (which would imply not great capital growth).

Any opinions on the CG potential of this place?

 

[QUOTE="propertyinvestor2021
Any opinions on the CG potential of this place?[/QUOTE]

Generally speaking...

I like Summer Hill as a Suburb. Access to city via both heavy and light rail, a buzzing village with some great cafes, bars etc and beautiful tree lined streets with some of the best examples of period homes in Sydney.

I don't love apartments for capital growth, and 95% of the time would choose something with better land content (ie house). The rare exemption being a unit with extreme demand & scarcity, eg a 3 bedroom art deco unit overlooking the beach.

I have purchased 2 x units and 1 x townhouse in Summer Hill in the past 18 months for clients, however they have all been owner occupier properties for first home buyers- so slightly different considerations and objectives than a straight-out investor chasing CG.

With that budget Id be looking at a freestanding house with good land content in a high demand pocket of Brisbane, Newcastle or Western Sydney.

 

Thank you!

 

I have bought in and around Summer Hill before. It's a great area for investing. One of the key drivers (apart from good transport, and cafes etc), is the public school there which has an OC class and is a feeder school to the selective schools.

This particular product seems to be a very basic and timeless (which I love), with an older style low rise block, and a good location. North facing as well. It is on the small side, both the living area and the second bedroom which is the main obvious negative, but that is reflected in the price. Go for it.

 

Why would that drive the prices higher?
Students get selected based on their OC exam marks, not if they are in the catchment or not. This is only for year 5&6. So, I expect a small floating population for rental properties.
This school is near the station. So, I doubt any families would move to this area because of the school.

 

Well, OC classes make the overall averages of the school look better. So it's a catchment that people try to be in. Plus it is considered easier to get into the OC class from within the school, though that's probably not true.

 

I just wonder if families with kids who move to Summer Hill for this reason would be interested in an smallish apartment like this. Price gain for this place of 572k (sold in 2011) to say 800k now is 40% total growth in 10 years which isn't amazing.

 

6/15 Nowranie Street Summer Hill sold for $884,000.
Bit more than I thought it would sell for given it's size, but location was really good.