NSW Time to buy PPOR in Sydney?

I have an investment property in SA and another in QLD. Both were bought in $300k'ish price range and they are almost neutrally geared if not slightly positive. I live in Sydney and don't have PPOR yet, currently living on rent.

I have saved up some amount since then and can access equity in one of the IPs to buy third IP in $400k-$500k range. Other option is to continue saving and go for PPOR in Sydney in a year or two (may be much more) when I have enough savings for a $850k - $900k'ish house.

Given the current market trends, I am a bit confused as on one hand there seem to be some rising markets (semi-regionals etc) where one can nicely invest $350k for a positively/neutrally geared property and on other hand there're no significant predictions for Sydney market slowdown (no one knows what's going to happen), so it's difficult to judge if it's a good time to buy a PPOR in Sydney considering financials. If price of the bulky PPOR remains stagnant for 4-5 yrs after purchase, all the loan repayments made until then is the opportunity lost I believe. If I don't buy Sydney PPOR and go for an IP somewhere else, it will mean that PPOR will be delayed by another 4-5 yrs or so.

I know no one knows future but some advice will be greatly appreciated. It's basically my emotional mind (comfort zone) vs financial dilemma. Plus, having a permanent address always is more comforting but the numbers would say otherwise if 'stagnant market' is what we are looking at for Sydney in the next few years.

 

I believe that it is all about the numbers and investing in what makes sense for your individual circumstance. As an example for me, we are currently renting as we can use the capital to generate superior returns with development projects.

The only thing I see with Sydney is that it is a buyers market, and that provides the opportunity to buy well. Do you have an opportunity / capability to add value to a PPOR (e.g. renovation). This could help stack the numbers in favour of that option.

 

Thanks, Morgs. Has Sydney become buyers' market already? Prices are still pretty much at the same levels though.

I can't probably invest in reno of PPOR (if I buy PPOR now) for the next 2-3 years as I have limited budget but down the line, yes.

 

You have plenty of time to get into Sydney.

Both SA and Qld are only in the early phases of an upward trajectory...why would you not hold for a few more years....I think 2019-2021 would be prime time to get into Sydney....and possible also a good time to take profits in Qld and SA......if you chose to do so..

 

Thanks! I will still be holding QLD and SA ones - just confused about third IP as in Sydney vs Brisbane vs Semi-regional VIC (i.e. Ballarat, Bendigo). What do you say abt these options, Sash?

If I go non-Sydney now (irrespective of it be PPOR or IP), it will mean that I won't be able to enter Sydney market for another 3-4 yrs at minimum though I will have a third IP somewhere which could be neutrally or positively geared. Fear of missing out on Sydney (+discomfort of continue living on rent) vs opportunity in other places. haha..

 

Mate if you are wanting your own place...do not buy anything at the moment...being impulsive can go against you......

 

@sash : above statement is generalisation about Sydney ? Suburbs like Hills district , Epping and surroundings will also be easy to get in ?

We dicided not to buy an IP in SA because ot will effect on the borrowing capacity and wait for couple of years to buy PPOR in abive mentioned areas and definately our approach is alligned with your statement and gives bit of confidence.

 

They will be....as the prices will be driven down by the amount people can borrow...also from Q2 of this year......I believe that banks will able to see your overall borrowing position...time will tell....

By believe....is that the Hills and Epping are the most exposed to fall as they went up a lot.....welcome to market equilibriums

 

Always insightful your posts and replies, thanks @sash

Will touch base with you to clarify in near future if we get stuck

 

If the IP is positively or neutrally geared, your borrowing capacity may not get affected though your savings/equity will go away toward buying the IP if you buy it before you happen to buy a PPOR after a couple of years. It's the similar boat I am in.

 

Where is Sash in this post or your just tagging him to get responce.?

Cheers

 

It could if further changes to lending policy are made....

 

There's no blood on the streets, no hard luck stories on the ABC about people losing their home and buyers agents are still driving Bentleys. Another year or two to go.

 

I'm going through the same situation with Melbourne. Looking to buy a PPOR in outer Melb, where it is quiet hot at the moment (ripple effect). It's good timing to buy a PPOR for the stage of life we are at, but I am concerned it's not a good time to buy in terms of property cycle. I've been burnt with bad time on 3x IPs now, it really does set you back.

What are peoples thoughts on Melbourne? Surely another year or two perhaps?

 

Hi @virhlpool ,

The area we want to buy our PPOR is kinda expensive hence requires alot of deposit and may need to sell an existing IP as part of the prepration for next purchase.

 

I'd say not yet the time for Sydney. It has slowed down though, a normal market. I think a lot of Sydney will be flat - too expensive and people borrowing capacities have evaporated.
Hills etc. .. yep, I can say its doubled or better this cycle. Falls - Maybe when it has really slowed you'll have no trouble getting shave off 250k off peak prices?

No crystal ball though. And let's see what happens when the north west rail link is in action.

 

Yep I'll be waiting another 1-2 years to buy a PPOR depending on what pops up. I'm hoping to snap up a house as close to Central as possible for under $1m (hopefully on the express line). No need to rush, there's plenty of time!

 

Thanks. Do you mean buying an IP for now or not buying anything and just save for PPOR for 2 yrs down the line?

 

Hardly a buyers market yet. Still not much stock on the market. Give it time though....

 

Under a $1 million close Central?
For a house or apartment.