Watching the Druie Drop in Slow Motion

Discussion in 'Property Market Economics' started by sash, 17th Oct, 2015.

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  1. RetireRich101

    RetireRich101 Well-Known Member

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    @Frazz, I don't appreciate this. You taking over my job that I am only good at. I thought I was the one and only "stat man" on the forum :p
     
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  2. Frazz

    Frazz Well-Known Member

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    @RetireRich101 HAHA, we might have to carve up the sub forums and divide and conquer :p
     
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  3. RetireRich101

    RetireRich101 Well-Known Member

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    whatever you say... I still happy to take you as my Apprentice:D
     
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  4. skater

    skater Well-Known Member

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    i don't know of anyone actively building dual occs in 2770. Anyone buying a corner for that reason is either unaware of the costs or land banking for the future, which in this market is crazy.
     
  5. sash

    sash Well-Known Member

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    Agree....time will reveal all........
     
  6. JDP1

    JDP1 Well-Known Member

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    Sydney maybe overpriced and ridiculously expensive...but I cannot see it drop significantly unless the jobs scene deteriorates amd/or its competitors take jobs that would have otherwise gone to Sydney.
     
  7. S1mon

    S1mon Well-Known Member

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    sash im thinking you should sell your shellharbour property(s)..if western sydney will drop as you think, then the rest of sydney wont be immune (or vice versa), and nor will illawarra etc..sorry to state the obvious...

    Although thinking logically, I assume you are already doing so?

    just looking out for you mate
     
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  8. hash_investor

    hash_investor Well-Known Member

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    what do you know about sydney other than that?
     
  9. JDP1

    JDP1 Well-Known Member

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    macro-economically- a lot. ..especially jobs and the corporate sector driving the economy ( which I believe is a huge demand driver for sydney).
     
  10. sash

    sash Well-Known Member

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    Nope I am not....bought for 242k...valued at 550k..even with a 25% haircut it would be worth 410k odd!

    So its all apples......with all the baby boomers heading down there...it might not be a bad spot.
     
  11. hash_investor

    hash_investor Well-Known Member

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    I need your suggestion guys,

    I have an IP in the druitt, a 2 bed unit bought before the boom. It is very well positioned and in one of the good blocks with very good equity built into it now. I am thinking of selling it and buying a house interstate. What do you guys think? I don't want to keep it anymore as CG is going to be minimal for the next few years it at all.
     
  12. See Change

    See Change Well-Known Member

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    I'd be looking at it seriously

    After all the changes in serviceability , you need to make sure of what your borrowing capacity will be .

    Cliff
     
  13. hash_investor

    hash_investor Well-Known Member

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    do you mean is regards to buying multiple properties interstate?

    I think even if I buy just one IP interstate it will give me better growth than a unit in the druitt.
     
  14. skater

    skater Well-Known Member

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    I think you answered your own question when you said "I don't want to keep it", but I would see if you are able to do a security swap rather than payout the loan
     
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  15. hash_investor

    hash_investor Well-Known Member

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    How does that work?
     
  16. ORAC

    ORAC Well-Known Member

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    For the 2770 suburbs, even I am amazed how much they have appreciated recently. I grew up there and my mother still lives there, my dad purchased there in 1969 for about $9000.00. Now the block sizes are really big like 600 sqm plus, and the house sizes are really small like 100 - 120 sqm. Whilst the opportunity for granny flats are obvious, there's quite a few there already getting good rent. The instrinsic value is the land. When you compare say the neighbouring Ropes Crossing with its 200 sqm - 400 sqm land size, the opportunity for 2770 is really knocking down all those housing commission houses and starting again to redevelop those suburbs with modern, dual occ, or integrated granny flat houses. Whilst price drop could be possible, one really needs to consider the comparables on the underlying land value.

    My only regret is not buying in when they were worth like $80k or so, but others like Nathan Birch did see this opportunity - the rest is history with those generic renovations. When I visit my mother, I see them all the time. In fact, I see 2770 as a barometer for the rest of Sydney as it traditionally has been the cheapest house prices there, and therefore reflects the wider Sydney situation.
     
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  17. See Change

    See Change Well-Known Member

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    When you sell the current property , rather than paying down the loan , you put the funds into a deposit account with the bank where it becomes the new security for the loan .

    When you have your new property , you draw down the funds and buy the new property which then becomes the new security .

    We did this when we sold units in Sydney . While we paid down some debt , we kept two loans in place and then bought properties in Brisbane and Adelaide .

    Advantage in our situation is that if we'd paid down the loans on the original properties and applied for new loans on the new purchases , under the new guidelines we wouldn't have been able to borrow the money .

    Changing security isn't a new loan so that made it possible .

    Cliff
     
  18. hash_investor

    hash_investor Well-Known Member

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    does that save you from the CGT?
     
  19. See Change

    See Change Well-Known Member

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    No . That's coming up in the next month or so . We made a capital gain .

    The capital gain was used to pay of debt on our weekender , which was non deductible .

    Cliff
     
  20. hash_investor

    hash_investor Well-Known Member

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    @sash ??
     
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