Thoughts on strategy - Paramatta Sydney

Discussion in 'Property Market Economics' started by Damo93, 7th Feb, 2020.

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  1. Damo93

    Damo93 Well-Known Member

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    I went to Sydney earlier this year and had a look at different parts of the market and liked Parramatta's prospects.

    I know many renters are looking for 3 x 2 apartments with 2 parking bays close to amenities and especially within 1km of a train station. Stock is very low to non existent in many desirable parts of Sydney for this type of dwelling or too expensive. My friends rent in Dulwich Hill for over $850 per week for example and they said it’s cheap for the area. My research of the area and surrounds seems to back up that claim.

    1304/36-46 Cowper Street, Parramatta, NSW 2150

    I am interested in some thoughts as to the above location
    With the below specs for an IP.

    602/2 River Road West, Parramatta, NSW 2150

    My thoughts are: Purchase price approx $750k, Rent approx $750 p/w, Gross yield 5%.

    My concern is supply.
    There is a lot of investment happening in and around Paramatta with many projects to start and finish over the next decade.
    Whilst currently there is very little stock now and new supply of 3 x 2 x 2 car parking bay apartments are generally limited is there potential for CG as well as decent Gross Rental Yield in this play?
     
  2. Trainee

    Trainee Well-Known Member

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    You think sydney prices are crazy, then go for highrises with 5k plus body corp?
     
  3. Befuddled

    Befuddled Well-Known Member

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    What suggests to you fair market rent is $750 p/w?

    Dulwich hill is very different to Parramatta.

    The second property is no where near a station - the only amenity close to it is a small woolies.
     
  4. Trainee

    Trainee Well-Known Member

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    Looking at 3 bed units for rent in parra, only one is 750pw. The next one is 700pw.
     
  5. Damo93

    Damo93 Well-Known Member

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    Obviously house and land would be a better choice but not close to a train station or for 3/4 of a million dollars
     
  6. Damo93

    Damo93 Well-Known Member

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    Location is very important. There are some over the past couple of months that have rented beyond 750pw.
     
  7. Damo93

    Damo93 Well-Known Member

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    $750 p/w was a target value. There have been some on the market rented above and obviously some below. Location is very important.

    if you read the text between the links I refer to the 1st link for location and 2nd link for specs. i.e 3 x 2 x 2 bays
     
  8. Befuddled

    Befuddled Well-Known Member

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    Oops, misread the first post.

    Full disclosure: I lived within 2blocks of the Cowper St property until last year.

    Supply is definitely an issue. At one point overlooking my balcony I counted 4 cranes within a 100m radius. There's plenty more in the pipeline

    Those specs MAY provide some scarcity factor as there aren't as many 3bedders. Having said that, the thousands of 2bedroom stock would put a lid on how much the 3bedroom stock could go for.

    750pw rent for $750k would be tough to find. ~700pw for 750k is probably where the market is at.

    Expect body corp to be circa 5k per annum which would drain the cashflow also
     
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  9. Damo93

    Damo93 Well-Known Member

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    I think $750 p/w may be ambitious but I think future supply and body Corp are big enough deterrents for now.
    It just piqued my interest with all the investment going on in the area..
    Perhaps time will tell.. 2023 light rail is expected to be completed and a train to Sydney CBD in 20mins will make it more accessible.
     
  10. Befuddled

    Befuddled Well-Known Member

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    As ridiculous as it may sound to someone from Perth, this price point for the current level of amenities and proximity to city is reasonable for young professionals and small families provided one is comfortable with the high density living.

    However, large parts Parramatta is zoned for high density (build to the sky type) so potential for CG is really dependent on supply and completely out of your hands.

    Long term should do well. Maybe give it 10yrs ;)
     
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