NSW Would you buy an apartment in Sydney right now?

http://www.smh.com.au/nsw/inner-syd...highs-amid-transport-concerns-20150721-gigaj0 More units to come!

 

HI Larry,
I think your question was "what about a 3 bedder?" just the way you've quoted it looks like I wrote it.

Personally i'm not a fan of three bed units because:

1. Higher price points. Much higher, especially if your within 20km of the Sydney CBD.
2. Can have higher NG
3. Can be harder to rent
4. Many people looking at this stock are emotional families who don't have quite enough money for a home but can afford a 3 bedder. They are emotional, happy to pay a premium and dangerous to try and outbid at auction or compete against in a For Sale situation. When compared to a 2 bedder, your up against many other what I call 'dabble' investors which makes it easier to get a good deal if your more experienced than them. Less emotions involved generally.

So for the reasons above, a 3 bedder in Sydney is not something that I would be interested in.

 

Apology. Yes I asked the question "What about a 3 bedder". Thank you for your view.

 

Personally if the numbers stack up why should you close yourself to a purchase.

 

Agree. But do the numbers stack up for many units in Syd now? Can your deposit get you a better return else where for less risk?

 

With the input from an investor friend and some analysis, it appears that I missed something and "misled" by agent causing my own analysis flawed. Will have a good chat with the agent. ATM it's not a buy for me with other variables considered. A good exercise for me.

 

I answered the post's question: Would you buy an apartment in Sydney right now? Even in heated markets an opportunity may pop up. Ask the BA's working the working this market and they will tell you the same.

Whether you as an investor would rather spend your time researching elsewhere is a personal opinion and a decision many of us make.

 

Chilliblue I was only answering the rhetorical question you posed when you said "why should you close yourself to a purchase".

I also agreed with you about if the numbers stack up then go for it.

Problem is, imo, all too often (and i'm not saying this about you at all), but all too often people think that the numbers stack up.. or the deal stacks up..the investment is good.. when in actual fact it doesn't.. or in some cases is terrible.

Hence why its only a very small %age of investors who get past 2 properties. There is a very important reason for that.

 

Yes, i agree with you @Chilliblue, investing is about long term not short term gain benefits.

@Leo2413: Yes, thanks for the tips in selecting a good apartment units.

 

No problems Tekoz.

Just 1 thing. You said investing is about long term not short term gain benefits. Well imo it depends on your goals. For people who want to build a portfolio a large portfolio asap , (and I know its not everyone who wants to do this) but for those people who do, the short term growth is very important as without it, it will greatly slow down portfolio expansion, slow down equity growth and make you take longer to achieve your goals. Again, I know its not everyone who wants to build a large portfolio asap, but I suspect many would.

 

@Leo2413 Ah now I see. I suppose for a large portfolio building, it mustbe diversified in multiple different suburbs or states to avoid putting the risk into single basket.

I never thought about those options when buying 3 bedders apartment as long as it is 20% under the same 3 bedroom house then it should be fine, I guess another thing to look for when buying apartment is the Strata/Body corp levy, it is certainly the big put off for me, the more rooms you have or the higher the level, you pay more strata thus it always increase never decrease. [Can anyone please clarify my understanding here?]

Once again many thanks for the sharing of your knowledge and experience here mate.

 

[QUOTE="Tekoz, post: 25381, member: 912"@Leo2413 Ah now I see. I suppose for a large portfolio building, it must be diversified in multiple different suburbs or states to avoid putting the risk into single basket.
Well that is my preference and the preference of many ultra successful investors I engage with. But I know its not everyones preference. Personally I think its a smart move to diversify in other states for a number of reasons. But I know different ppl have different goals. I cant say its the right thing for an investor who is happy to only buy 2 ips in his home place for life. If that's his goal then that's his goal.


I never thought about those options when buying 3 bedders apartment as long as it is 20% under the same 3 bedroom house then it should be fine, I guess another thing to look for when buying apartment is the Strata/Body corp levy, it is certainly the big put off for me, the more rooms you have or the higher the level, you pay more strata thus it always increase never decrease. [Can anyone please clarify my understanding here?]
Definitely insanely high strata, some of which I have seen investors pay $2500/quarter is imo insane and something most investors should never contemplate. Generally high strata comes with new and sometimes not so new, modern apartments with all the bells and trimmings. Pools, spa, sauna, gym etc. Your high strata fees is for the maintenance of those amenities. You also pay a premium in sale price for that.

Once again many thanks for the sharing of your knowledge and experience here mate.
My honest best advice to you is if you want to build a portfolio to use as a vehicle to create wealth, then go and buy some books and start reading, highlighting and absorbing the basic knowledge. I will keep banging on this point over and over again because its vital. You have to start to learn the basics, then build on from there depending on how interested you are and what your goals are. But you have to learn the basics imo. You have a look at most of the really successful investors on here and I bet you they have a wealth of knowledge they acquired, and its not all from experience. A lot of it is from reading, learning, studying.

 

Nah. Doesn't suit me strategy.

I've got a few apartments in Sydney already, and I expect better returns on QLD houses over the next few years which is where my money is going now.

 

+1.

 

agree. i think although city cbd is getting overpriced, it still presents an opportunity to invest in the 'future'. do you think sydney CBD will become a manhattan in 10-15 years from now?

 

@slumdogmillionaire & @WinDyz.

Yes I agree it will become jungle of high rise buildings. Therefore investing it now while the interest rate is record low is surely a good way to enter the market.

See this supporting evidents:

http://www.urbangrowthnsw.com.au/wo...h-urban-transformation-transport-program.aspx

http://www.planning.nsw.gov.au/en-u...ordevelopments/centraltoeveleighcorridor.aspx​

 

I disagree. I think people are better off looking at other states to invest right now. I don't have a crystal ball but I think Sydney's growth will flatten, I could be wrong though.

But saying because the interest rate is low does not make it a good justification to invest in Sydney. The property clocks all say Sydney is at its peak now. We don't know how much longer it will be there, but surely it will slow down, flatten or even fall...
If you happen to find an undervalued property in Sydney then by all means go for it, I just want to balance out Tekoz's enthusiasm.

I'm writing this comment because I purchased in Sydney 2005 and while it didn't fall in value, nothing happened in the property market for that property till 2009. You don't want to be buying something where you don't get any gains for 4 years.

You can get some results over that period, you just have to buy in the right location, and for me I believe thats interstate. I believe we are nearly at that same stage in Sydney as we were in 2005.... timing matters.

 

I don't know how far it can go. But our property prices are still cheaper than London, New York, hk, Singapore, etc and we're still have higher average income compare to those cities.

Just do your DD before making purchasing in Sydney as the competition is very strong and you don't want to pay too much. And avoid some high rise area as the growth will be pretty weak.

 

@WinDyz. Does Parramatta is now cosnidered as High Rise already today .... ?
if Sash heard this, thene thre will be ass whooping time ...