Western Sydney 2% price increase over the last quarter

Job growth is an important driver but not the only driver. Hobart is getting some growth at the moment but definitely not job growth. Brisbane only just exceeded 2008 high. Can this nation afford to have such discrepancy in house prices between Sydney and Brisbane?

 

I remember posting the mother of all booms ins Sydney around 2010 ...people doubted me then now I am saying that there will be a severe corectipn in Sydney. What astounds me is all the newbies who have seen one cycle with stats are defending their position on what are very ordinary suburbs with massive social dislocation? Blind freddie can tell you what is going to happen. Happened before and it WILL happen again.

 

Hope you sold out or maxed your equity it is about to go dead quiet for another 7 or so years ) But i can understand this it is obvious you have been long enough in Oz to ynderstand this. Good luck to you.

 

Yep maxed out/ topped up during the peak. Bought few in Logan that you already about and still have some good money in offset. Thanking to the Sydney boom, not sure what to do with those money in offset. But thanks for the remind though.

Any Harry Dick or Tom can predict this last Sydney boom. It wasn't rocket science but you just need to put money where your mouth is.

 

Define Smart,

I think it is not just the return that counts but how much in what time along with the rental returns.

Considering that, yes an investor may be smart. I am new but agree with the notion that areas of high investor activity gets hit first with start of falling markets. They also gave limited growth and will always be cheaper and easy to own. I think similar is the case with Logan.

Not saying people had wrong investments in these areas but it is matter of a personal opinion. Some think it is a worse strategy, some don't.

But everyone is free to express themselves on the forum. Specially those who attained success in their investment journey in less time with right amount of money and wise decisions.

 

Here is an article about investor commitment dropping and oo increasing.
The question id ask is if the oo commitments are in the same areas where investors ruled. If so, there is a support base. If not, those who bought there will be starring in the next episode of SBS struggle street.

Housing finance demand still growing, driven by owner occupier demand: Cameron Kusher

 

Here is my take, investors get out when oo are moving in.

Reason: Investors are sound analysts, this with no heart in properties, get in early, stay back/ sell at peaks.

Currently, investors are on watch mode. No doubt oo activity will increase.

Just my speculation, moreover affordability of non affordable will make the oo dive in. After all, they are the people with heart....
....in the property that they will buy.

The article does covers this point at the end though:
"If it does it may indicate that although demand in Sydney and Melbourne is slowing it is picking up elsewhere."

 

You are both correct...in markets like Adelaide and Hobart the market has definitely picked up but you have to be selective. You need to target the markets which are desirable...and the stuff in these markets are not cheap either. The whole thing about markets within markets.

The other thing is despite protestations there is plenty of land in the outer suburbs of Melbourne try finding titled land in the new estates unless the estate is a dud. That says it all.

There are many markets. unfortunately people view the market as a whole. The only no go market for me is Sydney. The other markets offer opportunites in my view.

 

Already put my money where my mouth is just in areas near Sydney without the land tax bleed same return or more. The stuff in NSW gave me a tidy 2m since 2008..I am happy with that. If all goes to plan Brissie will produce another $1.2m...Adelaide another $700k......Melbourne $600k. Some in NSW still growing...so hopefully another tidy 2-3m in the next 5 years or so.

If you are just sitting in NSW good luck with any growth for a while especially in the Western Corridor. I have been doing this for 17 years now...nothing new....unless you have seen 2-3 cycles...you won't see it unless it is upon you. Made that mistake in 2003 in Sydney...

 

You do realize NSW and Sydney incur the same land tax threshold pool, no? I have houses "near" vaclause, point piper and manly, just only 50kms out.

Nice but none in Sydney right?

Yeah same here. Bought in the peak of Sydney boom 2003 wish I didn't but they are more than double

 

Exactly my point, however the media will often lump in everything.

This increase talk is just a nonsense, the only thing increasing is costs !


Re holding things in Sydney, nothing wrong with that if you bought at the right time, the return may be fantastic even with land tax, moving the money around is too much for a lot of people, could not be bothered.

 

4 IPs in Sydney...

As for land tax...is calculated differently..as it depends on valuer general. The land tax in Woy Woy and Barrack Heights did not move much. It went up by about 8k each on the vals. In the Sydney ones they moved up to 50k. The way land tax is calculated I believe they average the valuation over 3 years.

As for doubling....if you held since 2003 and they have doubled....I would have expected more growth...over 13 years in Sydney.

 

In correct the opportunity cost of land tax can kill the deal. For example...lets say you hold a house for you bought for 500k in blacktown council...in 2012..val now is 800k...rent is 500pw. Land tax is say 3600. Mortgage is 450k ay 4.7% IO

On 550pw...you are getting 26,000 in rent....lets do the maths:

1. Interest $21,250
2. Land Tax 3600
3. Rates $2000
4. Water $650
5. Management Fees $1500
6. Insurance $1000

So loss position is 4k before tax. As rates climb and land tax averages up...your CF bleed could be more than 10k before tax!!! That is a lot of opportunity cost...and will cripple your borrowing capacity...

 

I was talking more long term, say you bought 20-30 years ago, not the last cycle, or maybe one before, also the value today is either going to drop, as you say, or rents should increase over time, also depends on how many holdings you have.

I know what your saying though.

 

This might sounds really simplistic...but I pay about 11k total land tax across all states. If I held everything say in Sydney I would be paying about 40k in land tax per year!

That could kill your entire CF...if you are retired on rental income!

 

Oh I hear you.....I agree it is worth looking at these things if you intend to hold numerous properties.

 

If don't hold multiple places it will be hard to build wealth.....

 

Let's look at your reply differently...

You had those 4 Sydney IP some 20 years ago.

You have not purchased in Sydney since 2000.

You predict a mother of all booms Sydney 2010 but purchased central and south coast NSW in the last cycle but not Sydney, correct? Not sure your response for this strategy is to minimise tax or something, as I would think 300k would buy you either a place in woy woy OR Blacktown in 2010 and would incur similar land tax by comparison. If your compare the land tax today, yes you would have more land tax if you purchased in Sydney instead of central/south coast, maybe this suggest land price and property price in Sydney has gone up more?

 

Damn @sash that's a long time ago how old are u know? U must have bought it for next to nothing back then