Where to buy in Sydney/Brisbane? with 2.2mil budget (Capital gains)

After a series of disappointing auctions, i kinda give up on buying on the north shore. Anything that goes to auction seems to just go crazy. So i started looking at Northern beaches: Manly to Dee Why, South beaches Maroubra to Bondi, Surry Hills area, Inner west: Newtown to Strathfield and Hills district: Mainly near future Cherrybrook station + Cherrybrook High catchment area.

I'm quite flexible as i'm still living with my parents at the moment. I can move in or rent it out, both option is fine. Reason i was only looking at houses is because i feel land value goes up a lot quicker than units even though the rental return might be greater with units, but i personally is looking more for capital gains. However i'm quite open minded and if you guys think it's better to divide up the budget to purchase a few cheaper units i might look into that as well.

I haven't started looking at Brisbane yet as i'm very unfamiliar with the market and i remember back a few years ago there was a big over supply of properties there. But you guys are the expert.

Cheers for the help.

 

If you're talking about resi, you'll have a lot less volatility if you stick with properties closer to the median price, and likely better yields too.
If you've only got a 2.2mil budget, it would be very risky and restrictive to drop it all on a single property.
You'd be at the mercy of the markets.
Would be different if you had a much larger budget and cashflow.

 

People always been saying how sydney housing market is a bubble but the price is just keep going up. Maybe stick to chinese high density areas? they seems pretty safe

 

Maybe with that sort of budget ,there is a long post on Brisbane have a read ,but before read everything that Terry- has posted because when you say
(Capital gains) what does that mean?..

 

As i'm not too fussed about rental returns and capital gains is my main concern. For example i live in Chatwood at the moment, and many houses here that were sold for 3mil can probably only get a $1300/week but they get sold for 4mil+ just after a year

 

only problem is i don't have the sort of budget to buy in the area otherwise i would. 90% buyers here are chinese i would say

 

2.2 mil is a lot of money...even in sydney its a fair amount, but obviously not as much as in the other areas.
Id think about 2 blue chip areas in brisbane - a house for 1.5 mil and a townhouse for 700k, both in brisbane.
This i think will give you better cg ( whilst having appropraite asset diversification) than one in sydney for that full amount.
Brisbane is firmly going on the upswing and going to a more diversified and self sufficient city as opposed to what it was in the past.
In sydney, for 2.2 mil, your market ( whn it comes time to sell) will be high net worth people or asians with seemingly unlimited money, often from dubious sources. Both sources carry a higher risk than the above brisbane option in my view.

 

@William W - I was going to suggest Willoughby LGA, Epping/Cheltenham/Beecroft, Killara/Gordon, North Sydney/Mosman LGA (water view units) you're even pushing it for Lane Cove LGA. On the other side of the harbour possibly Balmain Peninsula/Leichhardt/area, Haberfield/Summer Hill/Croydon - you don't want country towns even if Brisbane is 1/2 the price of Sydney.

 

Thanks Scott, i been looking at all those suburbs except Balmain.
- Willoughby price is pretty unaffordable for me at the moment thanks to Chatswood.
- A lot heritage area in Beecroft/Cheltenham and this 2 suburbs are the most expensive ones from Cheltenham to Normanhurst. But i guess they are safe as they have good schools
- Epping, i'm looking at 2 properties right now on Rawson Street, number 8 and number 17. They both guiding below 2mil or around 2mil but i feel they will go for pretty high price
- Killara/Gordon hard to find good location houses on the east side of rail for that price
- North Sydeny a lot of heritage and most the small houses/duplex/semi doesn't have parking. And rarely any good stock, same goes with Crows Nest/Waverton/Wollstonecraft
- With those Mosman/Northbridge houses, i feel only the water front one is worth buying as i think people wouldn't want to buy non water front houses there, they could just buy in Cremorne, Cammaray, Willoughby etc. But good suggestion with units, i'll go take a look
- With Balmain, i always feel it's quite isolated for some reason, i'll go take a look at the market
- Summer Hill/Croydon (don't know where Haberfield is since i only been looking on the train line). Funny story i used to live in Summer Hill for a week when we first came to Sydney in 06 and our house got robbed in that week. i know the primary school there is quite good, but what's good about Croydon. Wouldn't Burwood/Strathefield be better as there are more facilities and more chinese?

 

cant fully disagree here

 

sydney will never go down... will double or triple but not sure when

 

Really ? I am probably biased as a very long term resident but Northbridge would rank above Cammeray and Cremorne as a suburb on most measures. Also think it still has a bit of growth left in it this cycle. For 2.2 you should be able to give something with a bit of land in need of an upgrade - but of course not waterfront.

Give it a little more consideration.

 

thats what friends of mine used to say- the likes of london, NYC etc never go down...
No investment in this world is impervious to downwards trends...unless i hype it ofcourse..in which case, it can rise in perpetuity.

 

Yeah, i personally prefer Northbridge compare to Cammeray and Cremorne as well. What i try to express there was that i feel if someone wants to buy a house there, buy waterfront (of course they will need to have the budget). Because that's what unique about those suburbs. Has a friend owns 2 houses on the low side of Coolawin Rd facing the water, those houses always attract buyers and their rental return compare to normal non water front houses are chalk and cheese

 

I wouldn't buy a townhouse for 700k. I know you have one, but would you do that again, for 700k?

 

Haberfield is between Summer Hill & Leichhardt. It is on light rail & bus routes. All heritage houses, no knock downs. 2006 is a long time to hold a grudge with Summer Hill (mine are longer).

Do you want the competition from the Chinese in Burwood/Strathfield? or settle for where the Koreans are living ie Croydon?

 

My point is more about the diversisification- houses and townhouses are different asset types, often with different locations and drivers. This spreads the risk ( which the OP has hinted is a important aspect ), and both of these asset types are perfoming stroingly and will continue to do so for the remainder of the cycle. The actual numbers can vary and more to illustrate a guide.

 

I agree with JDP about going for properties that are not extremely expensive.
I would buy multiple median value properties across a few markets but properties that have potential. Perhaps some above median value if they have extra land for development etc. I am not sure I would buy too high over $1m as the market is more limited.
I wouldn't buy a townhouse. Maybe in Sydney only would I go for that stock type.
My 2c

 

Ah i see. I haven't really looked at the light rail route. With burwood/stratified I mean yes you completing with the chinese right now but if you can secure something, the capital growth and resale value will be a lot better especially if it's a good location within few hundred meter to shops and rail, which are the ones I'm looking at

 

I understand the eggs in one basket concept. But from my experience in sydney.
land value always go up a lot higher compared to strata titled properties