To sell or not to sell?

Hey guys,

I was planning to list my one bedder in East Sydney this week, however for some reason have cold feet all of a sudden. It's currently my PPOR but was wanting to upsize in a more affordable area.

Bottom line- would I be mad to list it in the next week? Only worries are having to wait another 5-7 years to sell and rate rises if I use as equity to buy a bigger place.

Would value any contribution at all!

Cheers guys

 

If you are selling to buy back into the Sydney market it doesn't really matter when you sell as you will be competing in the same market conditions when you sell to then re-buy (assuming they are similar areas). Whether it would be a good idea to hold your current PPOR and buy another property would be determined by whether you have the capacity to hold two properties and only you could answer this.

 

If you're planning to buy again in what could likely offer you favourable market conditions in 6 to 12 months, I'd consider selling now and buying in 12 months.

If you don't need to sell to buy, that's also something to consider, rent out your 1 bedder and buy your ppor in time, not just yet. Asses markets in 6 and 12 month's time.

 

I don't know about Eastern Sydney but I know Western Sydney units have lagged behind house growth in the last 3 years. I think there will be a catch up.
Have you had phenomenal growth lately?
What's the plan if you do sell? I wouldn't want to be buying in Sydney just yet.

 

Does your borrowing capacity support holding onto the unit as an investment and purchasing the new OO?

We are seeing some improved rental yields for apartments in Sydney, particularly the east start to improve as things move back to normal post COVID.

 

Thanks Sackie. I would be buying out of Sydney. I've got about half the amount for my budget for a deposit so would have to borrow for the rest.

Is waiting til after the election too 'dicey', do you think?

 

Just remember post election... June there will be another rate rise.. then probably July as well.

All will continue to affect sentiment heavier and heavier each time.

 

I'm not even sure re borrowing capacity and how rate rises might hinder my chances (!) It's a very split second change of mind. I'm a bit doubtful re serviceability. I do have have about half of my budget for a new home for a deposit, but as far as repayments go I'm not sure, especially given the current state of affairs.

Thank you!

 

I would suggest first place to start with making a good quality decision is to be well informed - work with your broker/banker on the scenarios to understand what is possible - and a good property manager will be able to help you understand what the proposed rental yield looks like.

 

Thanks so much Morgs.

 

I made an earlier reply to this post, but my response was for another thread sorry.

Personally I wouldn't buy now. I'd wait 6 to 12 months and monitor the market. The benefits outweigh the risks for me.

 

You have an existing portfolio, so it makes sense to invest in a time frame that makes sense to you practically and intuitively.

Would you advise a FHB to wait though?

 

I actually wouldn't formally advise anyone to do or not do anything. I'm totally unqualified

 

In response to Lucky888's question above: I wouldn't make any judgement based on where you think future prices are going to land. While I personally think the bear case is over-stated, it is entirely irrelevant.

Best, to figure out what your circumstances require in terms of your own time frame. Prices will go up and down, and that is completely out of our control. It's your accommodation in the end.

And of course, if there is a scenario where you can afford to do what you want to do and retain your current property as an investment, that would be a great option. There are a lot of people who sell into a perceived weakness and regret it many years later.

 

Holding costs make the difference. If its costing cups of coffee to keep then selling may be very short term thinking. Seek view of a mortgage broker on your options to hold it LONG term ? You may even be able to borrow against some equity to avoid selling. Selling down incurs all sorts of costs (ten thousand PLUS) and buying back in later even more.

Have seen people sell down a IP held a short time to take a $40K profit and its been quite cashflow neutral etc and they have lost neg gearing etc. $40K doesnt change your financial position. The only winner is the selling agent

 

Thanks John. I actually listed my IP last week, similar area. After speaking with my agent today and looking at the buyer's report, it seems (in my case) a lot worse than I thought- a 20-25% hit in a matter of weeks! The price range was similar to what it was valued at some two years ago, yet the agent was still trying to convince me to list my PPOR!

 

Well, good luck with the process, and I hope you get the price you want/need.

 

The time to sell was 6 months ago. Today alone there has been more than 5x the standard listings in the areas I have saved which means there is going to be far too much stock on market in the coming weeks.

 

Can't argue re timing. However, in my area there's nothing. Extremely slim pickings. I'm in shock re what my agent said today re potential slashing of 200-250K all because of IR rises.

 

Don’t let @John_BridgeToBricks see what you just said. His fellow brethren talking about prices going down is sacrilege