NSW Where to buy in Sydney - couple of options.

Hi,

First time poster here - looking some expert advice around here.

I live in Sydney and have been pre approved for $800,000 but would prefer to spend around $600-700,000 to $750,000 max if it's one bedroom (but cheaper the better). I have couple of options here to choose from at the moment.

1) Buy a one bed unit/apartment close to Sydney CBD (Alexandria, Rosebery, Ultimo, Newtown) and live here for couple of years before we can fund for a house - might be high maintenance, strata could be expensive, but higher chance for property price to not go down, rental demands could be high post covid.

2) Buy a small house with the current pre approved amount somewhere far away from Sydney CBD (ie Western Sydney like Merrylands, Penrith, Blacktown, Rouse Hill) and live here for couple of years before we turn it into investment property. It is far away from CBD, property price in these areas might not go up but it's a house and the current market for house/land is crazy at the moment.

3) Buy a one bed unit/apartment for cheap (somewhere in Wentworth Point, Macquarie Park) where you are less likely to make a loss somewhere that is good/ok and live here for couple of years before we can fund for a house. Could be low maintenance, rental demands could be low but it doesn't look like it's slowing down too much, these areas are high density though.

4) Buy investment property somewhere in Hunter region, Gold Coast or other cities and make that as investment property whilst renting here.

What would be the most ideal option here if you want to lessen risk and maximise on profit? We are heavily focusing on option 1 since that was our original plans but with the unit price so up, I'm also considering option 3 or 4 here too.

Are units/apartments generally going down across Sydney? Because Alexandria price is booming crazy at the moment for example and even condensed areas like Wentworth Point, Rhodes and Macquarie Park unit/apartment prices have not gone down (actually went up slightly).

I've also looked at Rosebery, Newtown and Alexandria - any thoughts on these areas would be appreciated.

I’m not sure if housing in not the most demanding areas will increase as much as buying a unit in Sydney CBD or somewhere close too...

Thoughts or advice would be appreciated.

Thank you.

 

What type of unit (new / old, highrise with amenities, old needing reno) are you considering?

 

Well we considered every possible unit/apartments that are within our price range - it's generally 1 bedder (build post 2000s) which might or might not need reno in the Alexandria/Rosebery/Newtown region(i.e closer to CBD) OR we looked at 1/2 bedders around Rhodes, Wentworth Point, Macquarie Park which are more newer apartments.

 

Why do you think that 1 BR apartments in CBD or those areas you mentioned might not go down but houses in Western Syd might not go up?

Do you have to live close to the CBD?

 

Hmm, I might be wrong so I'm asking here. I think because around the world, you rarely see properties around the Capital City CBD go down (at least from my experience in Asian country where properties around Tokyo, Seoul and Beijing/Shanghai have gone up again) and I feel it could be similar in Sydney. I guess it's not apple to apple comparison hence why I want to know more about it here but you don't see property value plummet around Sydney CBD (not that I know of pre COVID, after COVID - we won't know how market would be tbf).

Western Sydney - house prices have gone up but it's way out of my budget + I do work close to CBD hence why it's more convenient for me to work closeby too. Those which I can afford is like 2-3 hours drive away OR the general reputation for the area isn't that great (e.g. my family have bought a unit at South West Sydney and we have lost about 150k in market value in the last 3-4 years and it's continuing to go down at the moment - again house vs unit is two completely different thing so I'm asking here).

Any feedbacks/advice would be appreciated.

 

This is what I would do based on the limited information you have given.
1. Invest in QLD house under $400k
2. Invest in Perth house under $400k
3. Rent a unit wherever you want to live

 

The past data of price trends suggest houses performed better than units.

I'm just commenting on your assumptions. I'm not endorsing any City or State or any type of property. You should decide based on your own DD considering your circumstances. There are so many threads in the forum about all different strategies. Try learning as much as you can.

 

Thanks - will do. If I may re-word my original question -

1) If I have to buy a unit/apartment (since house is too expensive) around City or around 20mins from City though for convenience since me and my partner both works in Sydney CBD, where would be the most optimal location with my price point?
2) If I were to buy a house with my price point in Sydney region - which suburb would be the starting point to look at?
3) For interstate investment, I suppose I would need to hire a property agent especially as it's hard to move across with lockdowns and all. Would I be able to receive some free advice around where to start for this?

Kind regards,
John

 

I couldn’t find the article - but saw another day that there is a plan to build 7000+ apartments in Macquarie Park. The massive increase in supply will have a downward pressure on the value of the existing property - so avoid that suburb if you can.

Rentvesting as mentioned above is a good strategy but I recognise it isn’t for everyone. If you prefer buying something to live in, a house in Western Sydney would give you better growth but if an inner city apartment is preferred, perhaps look at Pyrmont and Erksinville too.

 

Perfect - thank you. You are right, I had looked at Macquarie Park before - there was 1 bedder, quite newly built, well managed, clean and good to live in just 2 mins away from Shopping Centre and 5 mins away from metro station - going for 630-640k price but it was out in the market for nearly 3 months and the demands there are not as it use to be. If there's more than 7000+ apartments coming in despite having 7-8% vacancy rate - it's definitely oversupplied in the area.

Pyrmont is quite expensive and won't get anything decent for 800k, I had looked at Erskinville too - also as expensive as Alexandria and not many out there at the moment sadly. I would like to spend more around the 700k mark rather than 800k...

If house - where in Western Suburb is a good starting point? I had looked at Rouse Hill, Windsor area previously but they have all been sold out and price points have now reached 1mil there!

 

Not advice, just general opinion.
Three vastly different options, and jumping from one option to the other won't be easy or quick. You need to be clear on what your short term and long term goals are, and stick to one.
1) I would look for solid, established units that I could add value via reno in a small complex close to a train station or a new Metro (eg Ashfield, Burwood). I would stay away from brand new or off the plan.
2) There are a lot of infrastructure planned around St Marys, Penrith, Mt Druitt and surrounding suburbs. Houses are in high demand and you need to act quickly once you see a good property
3) Most BAs would be very busy and you will be in the waiting list. Try talking to a few so you get the idea of the process and what you need to provide for the brief.

 

1 bedder is doable at Pyrmont. Erskinville is going nuts too, with an apartment just sold $100k above reserve two weekends ago, but $800k isn’t a bad budget for a one bedder. Avoid one of the recently completed brand new building in Erskinville - it’s built on contaminated land even though a two bedder is only $800k.

On Western Sydney, take a look at the St Mary thread. Do some research and ask questions there - many pros there who can help.

 

Pyrmont - haven’t seen one that’s around 800k. Erskinville, I’ve had couple of properties in mind but the strata was crazily expensive, some going over to $2000 (minimum $1600 at least). Alexandria is similar - not sure why it’s so expensive in this area vs in the inner west where strata averages around $700-1000). Are you referring to the one in Metters St?

Thanks for that - I’m going to take a look.

 

That’s true - I guess for now, what I want is a property that won’t go down in value (might go up even slightly for future investment) but somewhere good to live that is convenient location wise. Hence why I’ve been focusing on looking at units/apartments but when I hear house prices are booming etc. I can’t help but also look at housing opportunities around…

I’ve looked at Burwood - it’s already peaked and very expensive with 1 bedroom going minimum 750k there (beside the ones at Railway Parade which is known to have issues) but hard to find one out there that’s good. I didn’t realise Ashfield was getting Metro (thought it was around Five Dock area) but yes, it’s also already quite expensive there too.

Yes, I did a quick search around the area - I might visit there to see what’s available. Thanks for the suburb recommendation. I’ve looked at Box Hill areas they are all go over 800k

I see, good to know. I've even thought of attening those property expert classes (they were about $50 for a 2-3 hours session). But thank you - will do.

 

I would be buying an Established House with at least 550sqm land in Western Sydney close to established infrastructure. Blacktown is a classic example of this.

Blacktown, when I was growing up .. was a bit of a ghetto. Over time it has gentrified and is slowly turning around. Houses now go for $700-$800K, rental yields are up and you can put a granny flat on them for even more yield.

550sqm of land is going to be a thing of the past and in the next 10 years you will be hardpressed to find anything >400sqm.

Scarcity of land has always been a problem. Look at our friends in London - my cousin lives in Slouth in a Terrace Home that is ~$1.5mn on 250-275sqm of land and it takes him ages to get into London

 

Yep, quick search around Blacktown - I can see approx 350 sqm house going for 800k... it's hard to find a house with big land size these days around even 2-3 hours away from CBD. What would rental average be here if I were to get a house like this one? I would assume it won't be as high as unit rental in areas close to CBD?

 

As a first step, you need to ask yourself whether you are OK to (a) live far away from the city; or (b) rentvest.

Your budget, while not much, does give you some good options.

Assuming that you do not want to do rentvesting due to personal preference/circumstances, think about these three options:

1. If you want strong short to medium term capital growth, as @Shawn said you should buy a house around Western Sydney. I would focus on more OO suburbs for better growth (e.g. St Clair, Colyton, Werrington County/Down, Cambridge Park, and a few more - do your homework). The market is pretty heated so you need to be sensible and not overpay (too much). $800k can get you something decent.
2. Next step would be to buy a two bedder apartment in good suburbs. You may be able to buy a two bedder in an old block (but nicely renovated) in Lane Cove. Also consider Ashfield and Kogarah too.
3. Finally, the one bedder apartment in "convenient" suburbs, which you have already identified. Would also add lower north shore (e.g. Cremorne). I like St Leonards because it is super convenient - the luxury apartments are very popular amongst young professionals/wealthy downsiders - but note that there are a few large developments going on which would massively increase supply (and therefore CG could be flat for a while).

 

@jaemink52

Something like this was what I was thinking of. Sold over the weekend for $768,000.
https://www.realestate.com.au/sold/property-house-nsw-blacktown-137247490

Would probably rent for $520 a week.
However this is house and land.
Apartments scarcity is limited. But a house with 500+sqm... those are never coming back in Sydney/Melbourne.

When my parents moved to Sydney, the average land size being sold in Glenwood/Parklea/Stanhope was 500sqm-750sqm. Over the years as I grew up, I saw that growing smaller and smaller.

In the latest new estates in Box Hill & Marsden Park we are see land sizes of 250-450sqm. If you find a block in these suburbs > 500 sqm it's either a corner block or a 1 in 100 (and they go for > $1mn)

 

How confident are you with the rent? I thought it would be more like $450/week

 

With that budget, you could get a new 1bd in a close area like Lane Cove, Artarmon, Willoughby etc. All within 15 minutes of the CBD.