Syd, need advice for first home buyer 1) savings of buying a property under 650k vs over 2) suburbs

Hi all,
It would be great if you could give me your opinions.
I am looking to buy a property as a first home buyer with up to 800k budget.
I have no dependents, so it's going to be for one person. The leafy suburbs with close proximity to cbd like Killara are more appealing to me than suburbs with high rise buildings.

I currently live in Wollstonecraft in an old building and absolutely love the area, my problems are thin walls and no sound proofing which is annoying and very small living space. My budget could buy something unrenovated under 50sqm2 few decades old in here, so I have to look elsewhere.

I am just hoping to buy something, that could have capital growth and could be livable or could be easily sold in 10, 20 years, so I can upsize or be able to rely on it for my retirement.

1. Should I buy a property which is under 650k and in this way I can save 25-30k of stamp duty and probably 15k of lmi, this can build up the deposit for an investment property. Probably in high density areas like Asquith, Rhodes, Wentworth point, Meadowbank.
Or in older properties in Gladesville or West Ryde?

Or should I just use my maximum capacity 800k to buy something better?
If I use my maximum capacity I can't buy in high density areas as I was told I need to have at least 10 percent plus stamp duty upfront.

2. Where should I buy which is not far from the city and not in a high density area?

Thanks in advance.

 

Are you thinking more than 3 stories / highrise, or up to 3 stories?

Maybe step back and ask whether high density (read that as highrise) is a good idea to begin with.

Your budget, for example, could buy an old brick 2 bedder with redevelopment potential in 20 years, with a reasonable commute to the city (say 45 minutes by train).

 

I'd love the Wollstonecroft option tbh because it's a great location - value add with some minor work but it's not a good PPOR option if you want to have kids anytime soon. Plus small living areas are not fun (you can do something to help with the sound but not the room space easily).

I'd completely avoid the new high rises.

Low rise blocks as suggested by Trainee might be your best bet - pick something in a very convenient area for transport and sometime down the track developers may buy you out....

 

Thanks for your responses.

Trainee, I was thinking of up to 4 stories.

I have just heard here and there that high rises don't have land value and don't perform as well as an older property with more land value shares.

But some argue that if it's going to be your PPOR, you should only think of convenience and not growth, and they say if you are thinking of investment you should look elsewhere for maximum ROI.

but I think what if you want to change your PPOR in a few years, if your property hasn't kept up with the insane property market, then you won't have a choice.

What are your thoughts on the high rise properties?

If I buy an old property with the prospect of redevelopment like in a 50-year old building, would it be a maintenance nightmare with extra strata bills in 20 years time?
I actually think the building that I live in which is built in mid 60s is more solid than some newer ones that have leaking issues in a building that's only 10 year old, but this is also my assumption, I would to know what you think.

 

Do you think I should get the benefits of buying in under 650k market or buy something better using my maximum capacity and pay stamp duty and lmi?

 

You want long term growth. And you are on the right track. The older properties are better than the new high rises... you've hopefully read about how a number of the new builds have major defects and are a headache for their owners....
The main problem with the new builds is when it's time to sell, there is nothing to differentiate your one to a neighbouring property. And there is always going to be a newer building a new owner can buy in.

Older apartments can definitely have problems, I've in the past 16 years had strata unit properties with a leaking roof membrane, a lift replacement (very pricey), concrete cancer, major plumbing works (twice!) due to tree roots getting into pipes causing huge flooding issues... there have been minor issues too like garage complex roller doors not working and needing repair or fixing, carpark flooding, garage theft. Not so much of a huge deal but more minor.

However, the capital gain potential on a newer apartment is not organically there. If the market goes sour, you could make a loss on your place. If you want to sell, you'll be fighting other sellers with very similar neighbouring properties to sell - a race to the bottom. The most desperate will set the selling price.

As to buying 650k or spending more - maybe do whatever you are more comfortable with. It may take a long time to pay off your debt.

If you can buy something with 3br, you could rent out a room and I tend to think having a 3rd bedroom is very appealing and (in the form of apartments), they don't come onto the market that often and always attract a premium...

 

Thanks heaps Gockie for your advice.

 

Its not so much about the number of storeys, but what it implies. 4 storeys probably has an elevator? Try to avoid that.

 

Agree with this too.

 

Don’t do yourself an injustice and buy a 1 Bedder. Go 2 Beds plus car space and future proof it as a potential IP.

6/8 Harvard Street, Gladesville, NSW 2111
https://www.realestate.com.au/property-apartment-nsw-gladesville-135987998

14/25 Ashburn Place, Gladesville, NSW 2111
https://www.realestate.com.au/property-apartment-nsw-gladesville-136174458

9/4-6 Harvard Street, Gladesville, NSW 2111
https://www.realestate.com.au/property-unit-nsw-gladesville-136242302

 

Great, thanks for the advice David_syd. The properties you mentioned look really good.