Why it is worth buying PPOR in Good Suburbs

Hi All,
I have been reading lots of posts lately and read people saying things like:

1. spending money on good School catchment is rubbish
2. Good suburbs doesnt appreciate as much etc etc

I understand above, however, there I feel there is a lifestyle cost and where people want to live today will have more demand in terms of rent and buyers.

Whats your views?

FYI : I have PPOR in Marsfield and looking to buy my first investment property.

 

Dont agree with either of your assumptions.

there is a clear value to a desirable school catchment. In that people are willing to pay for it, so whether a minority think its not worth it doesnt matter.

don’t see the value in buying the newest phone, but there are enough people who do so that my view doesnt matter.

Good suburbs will go up probably at least as well as cheaper suburbs. But they often have lower rental yields and higher entry points.

Have to look at property types, not just suburb. New unit in rouse hill v old house in st marys? St marys house might grow faster imho. Old house in marsfield v old house in st marys? About the same though price point is different.

a redbrick unit at macquarie v house in st marys? The house would have subdivision potential, but the macquarie park redbrick has highrise redevelopment potential.

 

Rubbish from the point of view that school catchment correlates to a successful student -yes.
There are enough people who either believe it, or want to believe it, that you are not going to go too far wrong buying in zone however.

Anecdoatolly I would agree. The 'less good' suburbs have more room for gentrifying and a more affordable entry point caters to a wider range of buyers.

Like everything those are broad generalizations and there are plenty of exceptions to the rule.
There is a lifestyle cost accociated with everything and the type of property/location that appeals to a tennant is probably different to that which appeals for PPOR. There are properties/locations I love to live in and rent, but I would never buy as a PPOR etc.

 

Why?..

 

More expensive areas often have lower rental yields. Because owner occupiers dont look at what they can rent it for. What price home?

Why would you buy in an area that has low yield (i.e. you could rent for cheaper and invest elsewhere?) Because people want nice homes. One benefit is no CGT.

As long as it is still a desirable area (schools, prestige, land, whatever) then it will continue to go up as it gentrifies. Eastern suburbs are expensive, but theres no reason to think it wont continue to go up.

 

Property type: I enjoy living in an apartment rather than a house as a tenant but there is no way I have any interest in paying for or dealing with strata and owners corps.
Likewise I have no interest in yard maintainance, although if it was a PPOR I'd happily spend my spare time creating something unique and appealing to me.

Property location: I like to be as close to the noise an action as I can. I compromise on space to do it.
For a PPOR I would want more quiet and convience such as a garage and storage etc as I would be in a mindset of permanency vs that needed for renting.

 

Paying up to get into a "premium" suburb could be seen as a bet that higher income citizens will in the long run outperform others in terms of wealth accumulation.

The higher price prevents lower income earners or mum/dad rental investors from getting in, hence everyone new person that moves in maintains or improves the status quo.

Compound the difference in incomes generated by all in the premium suburb vs low income over a long working life could result in a very different future for each. I.e. more money poured into homes, networks formed, ability to borrow more against home at negative interest rates to invest elsewhere, kids end up getting high incomes also due to nepotism etc.