which type of IP should buy

Hi, I need some opinion of yours: I intend to purchase an investment property in Sydney, I've been research it for past two month, for the same amount money, I could get 4 br duplex in Merrylands, Guildford surrounding area, or house land package (250 sqm) in Riverstone, Box hills, or Seven hill area which has big block land over $600 sqm. I am looking for further growth and did not know which type of property to choose.

 

Hi @fionac

If you are looking for further growth, then you are likely to be disappointed with Sydney. As you would already be aware, Sydney has grown a lot over the last 5 years, it is unlikely to grow at the same pace.

$600 per sqm seems very cheap to me.

Buy in Sydney if you must, you will be fine long term - but not short term.

 

Neither as the Sydney market is overpriced. There is very little capital growth in new estates or near new developments.

Time is the only thing that will see capital growth but this is a long term investment.

 

Thanks for your information.

 

Do you think the property market is cooling down since auction rate is low than before?

 

@fionac - Buying a H&L package is a different product to established housing.

 

Is that mean: H&L package price will not drop even market is dowining, and others might be influence by property market?

 

@fionac
H&L has the developer's profit, capital growth will take a lot longer to achieve than on a second-hand (established) property.

The developer will move slower to reduce prices (ie they may offer other incentives like rent guarantee, upgrades, a car etc to keep prices high) - then capital growth is less likely.

Each type of incentive has a different effect or outcome.

 

What type of stock you buy should be dictated by supply and demand of a particular stock in an area which will most likely be determined by what the majority demographic of that area want.

Personally and generally speaking I'd forget Sydney and look at other markets. Imo cycles are very important and buying in the right state when a cycle is approx at an optimal part is something that investors should never overlook imho. Its ultimately about 2 things. 1. Risk mitigation and 2. solid investment with the potential for organic growth (and value added growth which is even better).

 

Stay away from new stock in new areas. As demand for these areas increase so does supply so the price remains stagnant.

Try and buy somewhere where there is no ability to increase supply.

You would be a brave person to buy in an overheated market.

 

Maybe its be worth having a read up on Perth. The drivers for the downturn there were different and things there dropped far more than is predicted for Sydney.

However, it will give you an insight into what sort of properties survive a downturn....and which ones crater.

Or you could just read all of @highlighter s posts! Even I you buy elsewhere, probably worth knowing how things can go wrong.

 

It seems to me that it would be smart to park your money and do some reading about property cycles. Reading about the GFC in the US is quite enlightening. Based on the change in Sydney median prices in the last week I would guess things look a little interesting. If you do not know where to buy, do not buy, wait until you are sure or find another use for your money.

 

Sydney is not so great for investing currently as suggested by others in this thread but If you are still looking to invest in and around the areas you suggested and want to get a 550+ sqm block + house around 850 to 1M, look at Quakers hill. The suburb is in great demand for home owners looking to move in and there is still growth left in the suburb due to the high prices in the neighboring suburbs like Schofields, the Ponds etc