Western Sydney 2% price increase over the last quarter

That is incorrect......bought in Sydney in 1999, 2000, 2002, 2003, 2004....

If you consider the Central Coast part of Sydney then again in 2010 and 2012.

That is the trouble with people telling you that you have not bought since 2000....

I am 48....oh by the way there is a quirk in the NSW land tax system which favours areas like the Central Coast, Wollongong, and Newcastle.....with 5 houses in NSW and 3 units...I still only pay less than 9k in land tax. A couple of these places are nearly 600k

 

Correct, yes it is averaged over a three year period.

It's not a quirk! It's based on the Valuer General land values. Central Coast, Wollongong & Newcastle are not valued as high as some Sydney areas. My Mt Druitt properties are only a fraction of the value of my PPOR, yet they are both in Western Sydney. Thankfully the PPOR is exempt.

 

How is it that my place rose from 263k to 580k but land val only went from to 243k to 263k on the central coast in 3 years. It went from 75k to 130k just on one unit which rose from 280k to 650k the other was not as bad

Also did you not make a poor fee decision arounding putiing NSW properties where there is no land threshold in a trust? Did you get that one sorted?

 

Sash, how come u only pay 9k land tax?

 

What's the 2003 and 2004 one Sash? I thought you sold the Padstow already?

What is your CURRENT holding Sydney properties, including your PPOR?

no, Central Coast if not part of Sydney. Just be very cautious of these areas Sash. When the ripple effect from Sydney dies, the Central Coast goes into a stagnation much longer than Sydney. It happens in the past, so don't see why not this cycle..
You should really start a post on psychology of declining coastal areas ...

 

2% this quarter, 1% next quarter...and on and on...All seems a bit like grasping at straws to me.


Why not just choose a 'value adding strategy' and buy BMV and BAM! Manufacture the equity regardless of what the pundits say the next quarters growth will be etc etc... OK so It might not be as simple and quick as 1,2,3 but it’s not that much harder.

Just my opinion.

 

As I posted...even though I hold about 3.8m in real estate in NSW....that is done via combination units and houses that is why. The rents are not great at only $2750pw or 143k....but debt is only $805k...so land tax is well and truly covered.

As I posted...the land tax is maximizing bang for buck based on the asset value and rent. Expenses are Interest 36k, Other Expenses $44k, plus 9k land tax. So positive income is high. So positive come here is 54k..already without any depreciation factored in.

If you own 6 houses in Blacktown..at say 625k per pop...you get the same in net assets. Assuming you have the same debt....it will cost you more to hold. The land value will be 350k per property or a total of 1.4m on which you will pay about $15k in land tax..plus rates are much higher in Black town council so expenses will be about 40k...assuming the same debt level of 800k so interest will be 36k also and rents of $425pw per property or 89k pa. So net of expenses you still 2k negative.

With a dropping market...the wisdom of this has to be questioned....

The balanced portfolio is the way to go.

 

I have more Sydney property & pay less.

 

Have cleared all property except regionals out of the Trust. Land Tax is VERY manageable now. . As for the rise in values, I'm not sure how they work it, but take my Tregear property that I sold, the Land Value was only around $150k, which is what I'm assessed on for other 2770 properties. I'm expecting it to gradually increase each year though.

 

Man, got double the land tax of @sash but less property - but we always go for high land value. I also expect @sash is including the exempt PPOR.

 

Yes...the sting in the tail is the 3rd year after a massive market movement like now. Did you have to stamps to get out?

I see this happening on the 3 Sydney properties..but not as much on the Woy Woy and Barrack Heights one. As matter of fact the land value on Barrack Heights was only 160k ..but I think it will rise in the next 3 years.

My spread across the country is starting bear fruit as other markets move up ...

 

Yes correct the former...PPOR ....you still need to pay Land Tax..no way around that.

I ran across someone who has a serious cashflow situation due to almost 32k in land tax...on holdings of $5m. That is insane!!! Some areas the land is most of the value.

Once of the reasons why I am building the biggest house I can on the smaller blocks of land I can find. Huge demand as the demographic changes..I am also tricking them up..mostly in Melbourne.

Plan to do some of this in Sydney when the opportunity presents.

 

i always wonder how ppl can pay land tax, because from the property magazine, there is always a profile saying "buy 10 properties in 2 yr or so", as i think land tax is tough to manage. (unless you bought the property several yrs ago)

 

If you spread your holdings across numerous states then it takes longer to exceed the thresholds. Buying lower land val properties like a T/H can help as well.

 

Maybe you are using a single year (ie 2015) to calculate land tax for Blacktown example, and using an average of last 3 years for the Woy Woy example? ( I must admit you're pretty good at this from the Druie thread)

Here I snippet the Land value for a 550m2 for Blacktown versus Woy Woy for an R2 land.

When you purchased Woy Woy in 2010/2011 the land value is much higher than Blacktown, so I am completely lost when you said the Central Coast has lower land value.

 

Just saying Sash. you purchased the Woy Woy for 263k in 2010, while the median then was 370k

ie, more than 100k off the median.

it's either you bought well ( and I am pretty you have), or

it's not the average kind of Woy Woy property such as it required extensive reno, small lot, not the desired area of Woy Woy or historically know inferior side of WW

today we're looking at land value.
Value General says one figure, your personal assessment say a much lower figure
You argued that you're buying 'outside' of Sydney because you came aware that the land value is lower as compared to Sydney.. I disagree with this.

I am saying that land values can be high and low, even within one suburb such as Woy Woy. For example, if I take another R2 property in Woy Woy, we see a much lower figure for 2016 compared to previously...

Across Blacktown suburb we see this trend
Across Blacktown LGA including Mt Druitt Suburb we this trend.

Using the website, Access land values - Valuer General of New South Wales you can see the Mt Druitt and most of the Penrith LGA are on the 200k for land value which is similar to Central Coast.

Also note the land valuation from VG can go up or down as well, like the WW example below.

 

There is a very simple reason for the negative cashflow in your example up there.

The black town property is better positioned to gain capital growth than most places in the country.

I am sure you are very well aware that when it comes to property, you cant have your cake and eat it . Capital growth usually brings about a lower cashflow and vise versa.

With all due respect, your assessment of QLD properties you mentioned earlier is really wishful thinking and with the logic you are using your assessment of Western Sydney is not very reliable.

 

Yes.....and no.

Yes, on the ones we sold to ourselves, and no, on the ones we sold.

 

good stuff

 

maybe lets wait and see