NSW Who wished they purchased in Sydney

Discussion in 'Where to Buy' started by MTR, 24th Jul, 2015.

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  1. Azazel

    Azazel Well-Known Member

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    Nice one!
    Look forward to reading about in a thread if you post one.
     
  2. sash

    sash Well-Known Member

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    What is your definition of real money...if it is 50-100k then yes over the last 2-3 years.....

    As for making money in Sydney yes you would have made money in Sydney if you bought before late 2014...now I think the ship has sailed..it is heading past Wollongong and the Central Coast as we speak

    Just had a word to my broker...told a hilarious story about an Asian lady who bought 7 off the plan properties a mixture of houses and units....some of these are ready to settle and finance is an issue.

    Judging by the last Wenty turn out...property is losing its attraction ...it happens every cycle.

    I find it hilarious some people here carry on about Sydney keep jumping up in price (not directed at you but some of the one cycle experts...).......

    It astounds me why people focus on Sydney when the cycle has clearly turned.......
     
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  3. MTR

    MTR Well-Known Member

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    I think you already made your N money in Syd...nice
     
  4. MTR

    MTR Well-Known Member

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    lol...very good point, but do they mean, you can throw a dart in a booming market and make money in any area regardless??
     
  5. Gockie

    Gockie Life is good ☺️ Premium Member

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    Actually you almost could have in the last Sydney boom... I do feel however when things drop back, some properties and areas and property types will be more solid than others.
     
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  6. Tattler

    Tattler Well-Known Member

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    Whilst people have made significant gains in Sydney, most people don't talk about the high level of holding costs. All they see is the buy price and sell price (or current house price) and they think they have done well.

    Unless you time yourself buying just before the rise, and selling at the peak, you would need deep pockets to service the loans and hold the property.

    People with multiple houses in Sydney will soon be hit with very high land taxes especially with the land tax being calculated by average of last 3 year's valuation. Investors will be shocked over next 2 years when they get their NSW land tax bill due to their land valued at very high. So unless they bought them a long time ago and is cash flow positive, they will need very deep pockets.

    I was looking at buying a duplex in Cherrybrook this year. The rental yield is good, and is definitely poised for further growth, but the potential high land tax absolutely killed the deal for me, as I checked the last 3 years' land valuation of the property.

    So I ended up buying in Melbourne for the first time last week. It is in cooling off stage. Melbourne has much more affordable housing than Sydney and people will be moving down because of this reason.
     
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  7. MTR

    MTR Well-Known Member

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    what would be ideal is to have purchased in both markets, reduce debt and sell down in Syd as you mentioned and buy up in Melb
     
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  8. Tattler

    Tattler Well-Known Member

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    Well I don't have enough IPs yet to sell down. Only PPOR and 1 IP (cash flow neutral/positive) in Sydney, and just 2nd IP in Melb. Amazing the same money you can get in Melb compare to Sydney. Whilst I have quite a bit of equity but it is tied to my PPOR and we are not planning to move out soon.
     
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  9. MTR

    MTR Well-Known Member

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    I am pretty sure that the median house price of Melb is 200k less than Syd, massive gap
     
  10. sash

    sash Well-Known Member

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    Ditto......I already pay 9k in land tax in NSW

    You are spot on about land tax...which is a dead tax.......I know someone who owns a house worth $1.4m.....the land component is already about 950k...that is about 8k in land tax. Yes they made a ****** load of gains from the mid 7s paid. But if you rent is only 700pw...and the horrendous maintenance costs of an older house. You are bleeding CF to the tune of 10k per year.
     
  11. Sackie

    Sackie Well-Known Member

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    It all depends when you bought, where you bought, at what price and what strategy you employed for each deal. To me, the answer is not to avoid Sydney or any place for that matter when all the signs are showing it to be in a rising market, but rather to use the data, due diligence, closely monitoring cycle stages, strong negotiations and choosing optimal strategies to place yourself in the best position for each deal at the time of purchase and beyond. Those who do that will reap much better than those who do it less and less. Each will reap accordingly based on their efforts and approach. But to contemplate avoiding a strong cycle in any state (if your financially capable and looking to invest) makes no sense to me. There is no easy way to build wealth consistently. It takes constant effort and risk mitigation.

    Just my opinion,
     
    Last edited: 9th Aug, 2016
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  12. Sackie

    Sackie Well-Known Member

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    Coulda, shoulda, woulda... talk is easy. And there are many darts that have been thrown that will yield some shockingly poor results when compared to other areas and dwelling types in Sydney.

    I agree @Gockie, there will be certain dwellings and areas that will keep their value and grow steadily, others that will remain flat for a long period and then others that will drop in value 20% plus due to oversupply. For the people who threw the dart at OTP units in 2015 in high-rise, massive strata high upkeep buildings... That's called, game over.
     
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  13. Gockie

    Gockie Life is good ☺️ Premium Member

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    Yep.... agree 100%.

    I saw what held value and what lost value in the last cycle, my thought is people want to be close to the city with good transport, and a second factor is that parents what to buy where the good schools are. This sorts of factors make an area bullet proof in Sydney. Ps. While beaches are nice and will always attract a premium, few can actually live there. That's why the inner west started to get so expensive, people couldn't buy the east so they had to move out to the inner west. It has transport and with this new population, it increases it's hip factor.

    Now I say that Inner west factor has pushed even further out in the last few years and the train line to the Canterbury area is now somewhat considered like the Inner west.
    Anyway, this is a domino, pushes out areas that were previously unfavourable (eg. suburbs surrounding Parramatta). As everything closer to the city becomes expensive. The areas around Parramatta previously were just ok areas, not hip at all pre this boom..... Now they are very solid areas and people are proud to own homes there.

    Another factor is good schools. People will pay a hefty premium to reside in a catchment area of a school with a good reputation. I know so many people wanting to move for this singular reason.

    What I think will suffer are the massive strata complexes... for example a colleague bought OTP in Castle Hill.... in the area there are 7 buildings, all planned to be released at the same time or thereabouts, all 5 levels, all with say 6-8 apartments on each level. I believe he is going to struggle to get tenants with this massive influx of stock. And he would struggle to sell as others decide they need to sell.

    For all property types (incl houses) I think the far flung corners will struggle. If your home is over an hour's trip to the city by the fastest means available, with little differentation to neighbouring properties, my question is, how widely appealing is it? Would people still choose to buy there when the market is cool? Would people in the area with lots of equity in their homes in the area want to upgrade to some place more convenient or would they prefer to stay in the area (e.g. move to a better dwelling or knockdown/rebuild)? Crime and stigma can also be factors. Do you like your neighbourhood? Often the answer is they only buy there as a foothold but want to move closer in when they are in a better economic situation.

    I know not everybody works in the city but that's where a lot of jobs are. People will get fed up with long commutes. A colleague bought a new home in Prestons.... our workplace was in the city. After a few months she moved out and started renting closer in as she didn't like the commute.

    Amother friend has to drive for her job... coming from the south west, getting all the traffic every day... personally if I encountered that i'd either move (but she has family incl. a school aged child so moving is harder) or get a new job.

    On the other side of the coin where I live people tend to stay in the area and when moving tend to move to another home in the area (i'm guilty of that plus I know someone else who bought up 3 homes in the street I used to live in... and not for development either. He just wanted to buy.. one reason I think was he wanted to live on the other side of the street!)

    Other factors for selling are for reasons such as owner occupiers want to do a big move like move to the country in retirement or move overseas. (That's what our vendors did in both cases!) Owner occupiers where I am don't tend to move to other parts of Sydney. Actually people tend move to here even from other parts of Sydney... my buyers of my old home were from Hurstville, and one of my neighbours moved here from North Strathfield (note this one moved in maybe 12 years ago though). Incidently the one that moved from North Strathfield said his car insurance dropped dramatically after moving. Anyway, people tend to want to live here and for that reason, you'll tend to find few properties on the market, it might be around the 0.2% mark. Note as investments they don't give a great rental return though (just over 2%) and land tax will really bite as land in the area is valued well and truly higher than the threshold, so it's a very owner occupied area.
     
  14. Sackie

    Sackie Well-Known Member

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    @Gockie fantastic post, cheers.
     
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  15. See Change

    See Change Well-Known Member

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    Obviously the ONLY place to buy at the moment is Manly !!!!!!!!!!!!........:cool::p:D :);)

    Should be able to buy a nice three bedroom for under 1.5 :eek::D ....

    Cliff
     
  16. Gockie

    Gockie Life is good ☺️ Premium Member

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    Awww... ps. I always love your posts Leo.... I think you are always on the mark.... :)
     
  17. Luke T

    Luke T Well-Known Member

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    LOL i think you are correct !
    Except Go to the Manly approx 12 hours further North and you can buy for $600K!!
     
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  18. Gockie

    Gockie Life is good ☺️ Premium Member

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    Still great value.... Manly in Brisbane, that is.
     
  19. Sackie

    Sackie Well-Known Member

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    If only..hehe...I wish. But that's life. Win some, lose some..but always better to be in the game and give it a go. :)
     
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  20. Property Twins

    Property Twins Mortgage Brokers & Buyers Agents Business Member

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    Revisiting....peaked at 60% capital growth in 3 years
     
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