NSW Sydney to keep growing

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They will go tall in Parramatta as they have indicated already. The risk here is if they lose businesses or not attract new ones to Sydney ( and these businesses goto bn or Mel instead) then there may be issues. Right now that's not happening much and supply constraints are keeping auction clearance high and prices as well.
I'm bullish on long and med terms on Sydney, but there are better value plays Imo.

 

I reckon even if Parramatta goes tall (and it is doing that already), at least it has good transport and it's still an easy trip to the city. And fwiw, it's still Sydney's second city. No matter what happens. It's been around and established since the first fleet needed to find a place to grow food.

 

I regret not listening to my mentor's advice of not buying into Parramatta when it was still cheap as chips. I think I was more concerned about fast cars

 

We still see the median price of units in Parramatta is just 590k after having more transports and jobs in the area, however the house price has never really gone up as expected. Recent price of a brand new apartment in Parramatta can cost 800k or more for 2 Br which I think is not worth the price for Parramatta area. I recommend my client to aim for properties in Carlingford or Petersham which starting from just 600k, which these suburbs are either close to CBD or solid education catchment.

 

Carlingford trains are crap.... 600k for Parramatta units is a far cry from when they used to be low 2's less than 10 years ago.
Parramatta houses have gone up a lot.... median well over a million.

 

The low 200s would not have been in 2006, it was around 280K (tried to sell for 300K but highest was 285K offered). the low 200s would be in early 2000's. And today you would not be able to sell the lower end scale property for 600K. more likely 530 to 560K. I have property in parra so I keep a close eye on parramatta (keenly monitoring units built in the 1990's)

 

Check the unit price growth of Parramatta with Zetland and Rhodes for the last ten years and see how Parramatta performed for the last decade compared to those best performing suburbs.

 

Imo I wouldn't really buy in those areas. All of these areas are too overpopulated with apartments. There is however a small part of Parramatta that I like and would buy in.

 

....until you get taxed out of existence......

 

When it will grinding to a halt ? is the more reasonable question here, because the property price growth is unsustainable.

 

PPOR = no land tax

 

In my opinion. Apartments could be a problem, houses on land are still very strong. People often want to move from apartments to something with a bit of land when they have kids. Once the kids move out, they may or may not downsize to a unit. But my belief is that the demand for houses on land in Sydney will remain strong.

Also, people are subdividing and doing dual occupancy type homes or homes on half sized blocks and I see a lot of demand for that in the metro area, it's significantly cheaper than a freestanding full home on a big block of land, but at the same time it's not a unit either.

 

@Clarity94
Just an FYI...I would not have an avatar of someone's bathroom lol
For tips on avatars, ask @MTR

 

That's really a $#!+house avatar if I ever saw one.

 

We have cases of people make use of tax return, rarity of high quality apartments to make good amount of money from purchasing IP apartments in somewhere near Parramatta, Rhodes and Zetland, then move on to purchase house for PPOR. If it is IP then who cares if the suburb is overpopulated as long as it gives high rental yield and decent CG. I have seen way more populated apartments in major cities around the world, still having strong real estate market and I can't see why Sydney cannot be one of them.

 

I will surely check it out and btw it is not someone's bathroom it's unoccupied.

 

Making CG on apartments in areas of high supply is not a sure thing, and buying new OTP as an investment is fraught with risks.

1. Your clients have been fortunate in the past but when the market turns, they'll find the market stagnating. Lots of new apartments everywhere in Sydney. Suddenly all the vendors selling at the same time can only compete on one thing, and that's price. If you have one or two desperate sellers then that will drag down the value of your investment as the banks will only value your property based on sale prices achieved on other local sales.

2. New buildings often have low strata fees to start with then they can climb. A colleague bought his new off the plan and 3 years later his strata fees are $1300 per quarter.

3. If multiple owners in a block are looking for tenants at the same time, then tenants can afford to be a bit choosy. Yes, they have better returns than houses but better to not just buy one of hundreds of similar properties if it can be helped. If it has some sort of positive twist (views, courtyard, convenience, boutique style feel to it) it will be sought after. If not... it might not perform well in a downturn.

Therefore it's ok to own apartments in Sydney, but I would urge caution as to what is actually bought.

 

For now.....

Will only be a matter of time before the fed/state govt starts to put the screws on to PPOR as well. eg they aren't happy with all that upfront stamp duty but want to shear the peons annually as well.

 

High supply and decent CG? Lets wait and see in a few years...

 

I should hope so that's it's unoccupied when the pic was taken lol