Sydney - Northern Beaches

It's great to see these areas doing well in the current cycle. I was interested in the comments about the Northern Beaches holding their value so thought I'd run some RP Data reports. Purely an objective observation but thought these might stimulate some discussion:

1997 - 2007 (Northern Beaches)
Bilgola: 118%
Manly: 117%

1997 - 2007 (Western Suburbs)
Blacktown: 132%
Penrith: 114%

It's a small snapshot but similar results for many of the other suburbs in those areas show there is not the large gap some people believe exists. The more desirable areas showed less fluctuation but over the longer term it looks like much of a muchness. The North Shore figures do show a positive bounce in 08 but then the last cycle also took a while longer before the outer suburbs caught up.

Hi guys,

Time to bump this thread again...

Yesterday was my birthday, so I guess this article published yesterday counts as a nice little birthday present then.

Reason to cheer across suburbs

Cameron Kusher said:

I must admit I'm surprised at how well the Sydney and national property markets have bounced back during the first seven months of the year.

Median house values have increased 7.2 per cent and median unit values have climbed 5.4 per cent. Sydney houses have outperformed the nation and units have underperformed only slightly.

By breaking Sydney up into its suburban sub-divisions we can determine the performance of different markets more closely.

Over the first six months of the year the standout performers in terms of house value growth have been the inner-west (14.2 per cent), northern beaches (8.8 per cent) and Blacktown (8.7 per cent).

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Happy days! 8.8% in 6 months is worth about $150K to me on my two IPs there. Its been a tumultuous period, but for those willing to put their money where their mouth is, the rewards have been worthwhile.

Cameron Kusher said:

It is undeniable that the property market's performance has exceeded most people's expectations this year.

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Ok, maybe even mine. 18% annualised is more than even I was anticipating!

Cheers,
Michael

I'd like to see just one report or article where the writer does not have a vested interest in spruiking rising prices. Just one.

Beside that, what did people expect from the lowest rates in 40 years plus throwing billions of stimulus money around plus the FHOG boost.

Every time i've seen this it turns out bad.

MichaelW said:

Hi guys,

Yesterday was my birthday, so I guess this article published yesterday counts as a nice little birthday present then.

Happy days! 8.8% in 6 months is worth about $150K to me on my two IPs there. Its been a tumultuous period, but for those willing to put their money where their mouth is, the rewards have been worthwhile.

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Happy B'day Michael, nice little present indeed! I hope my Newporter contributed to the 8.8%. I don't really care how the growth comes - low interest rates, government grants, supply/demand, immigration, inflation, blah blah blah...There will always be sustainable growth factors, unsustainable growth factors, and everything in between. Go Sydney!!!!

Re the discussion a few pages back on selling in 2003, it reminded me that my folks sold a two bedroom flat in 2003 at the beach end of Dee Why Pde, with two of the smallest bedrooms ever, eg one you would not have fitted a double bed in and the second you could have just, for $750k !

Looking back it now seems like a huge amount of money for what it was.

Investing rather then comfort

Have you ever thought of investing in an area outside the area you live, say an area with higher demand and lower supply that would be more desirable long term as an investment?

Great link MichaelW!

Especially pleasing to see the percentage for the inner west 14.2%, hooray. I'd been thinking that the PPOR has increased by $50k (conservatively speaking) but based on that percentage it's more like $80k.

Only downside is that looking for an IP in sydney's innerwest is so expensive nowadays. Shifting my outlook to Dee Why and surrounds based on the expansion in the area.

A couple more updates for my personal little investment backyard:

Land ho! The outlook for property

SMH said:

Anthony Ishac, Australian Property Monitors "Those suburbs that suffered during the [global financial crisis] and have lagged in the price recovery will stage the strongest rebound and growth in 2010." He suggests Mona Vale as one hotspot.

"Pre-GFC, the median house price was $925,000; by September 2009 it had dropped 11.1 per cent to $822,500." Other Sydney suburbs set for recovery are Gladesville, North Richmond and Newington. "Holiday destinations one to two hours outside Sydney are also due for growth."

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So, if you've bought recently or at discounted levels then expect a nice little recovery. I suspect Mona Vale will continue well beyond pre-GFC levels. As an aside, I just got back from Sydney and meetings with my short-listed builders for my Mona Vale MUH site. I visited the unit site two along from mine in Pit****er Rd and they'd just sold the 3-bed townhouse at a lower spec than my ones for $945K. Their 2-bed units with no courtyard were asking $845K. My development has 3-bed plus studies with big wrap-around courtyards and should fetch nigh on $1M each. My initial Gross Valuation was only $850K each when doing finance which already stacks up at 70% lend at that lower level. Happy days.

And this:

Rents set to rise as land values soar

SMH said:

Warringah, which has 12,400 rental dwellings, recorded a 12 per cent rise in values to a median of $577,000.

Pit****er land values were up 8.1 per cent to $638,000. Its 3800 tenants typically pay $600 a week.

The NSW Valuer-General issued new valuations that will form the basis of tax assessments sent out by the Office of State Revenue next month.

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Seems the Valuer-General is on to it as well. Expect both Warringah and Pit****er land values to be up sharply on last year. The Northern Beaches is having its day in the sun (intentional pun) and is set to continue for some time yet.



Cheers,
Michael

*edit* Oh great, a new addition to the block list. That should read Pittw@ter Rd. Will make a lot of my future posts hard to read... *endedit*

MichaelW said:

*edit* Oh great, a new addition to the block list. That should read Pittw@ter Rd. Will make a lot of my future posts hard to read... *endedit*

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Haha! Took me a few seconds to work out why Pitt-water is now a banned word! I was slightly puzzled at first

I agree things are moving really well on the beaches. I bought a new PPOR here in mid-2009. Prices were just starting to take off again at that point, and are up strongly since. The RE agents I've spoken to recently are sounding so much more upbeat than they were in 2008.

Best of luck with your development Michael.

Shadow said:

Best of luck with your development Michael.

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Thanks mate. Lets just say that at present its looking fantastic. I'll start blogging it again in a few days time. I've been quiet on this front as one of the developers bidding for the work is a fellow Somersoftian and I didn't want to disadvantage them in any way by posting the process until we've selected a builder.

I should have selected the builder by the end of this week then I'm going on an ocean cruise next week so will post the whole process and outcome when I get back under a new thread. Happy days!!

Cheers,
Michael

Big Tone said:

I had an IP in Manly Vale, Quirk RD, Bought 1997, $262k sold 2003 $347k, similiar in same block now $330k ?????
Big Tone

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Well done!
I been pointing a similar scenario in my areas, but keep getting labeled a doomer & gloomer, but paying to own is not what investing is about.
Many of those who bought after 2003 at high LVRs now need a huge rise just to break even after spending 6yrs throwing money down a big Buy & Hold pit.

Good to see my favourite little investment patch is still bucking the trend...

SMH Article on June qtr increases

SMH said:

There was no growth in the median house price in the lower north shore (0.0 per cent) and very little in the inner west (0.6 per cent). But in a reversal of fortune on last year, prices bounced back in the west (3.2 per cent), south-west (2.4 per cent) and Canterbury-Bankstown (2 per cent). Bucking the trend were increases of 5.9 per cent on the upper north shore and 3.6 per cent on the northern beaches.

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Yeah, the banks are still holding me up on my build, but they did call me Friday and confirm I now have approval pending the valuations which shouldn't be an issue. They're doing those now and will have finance documents to me in a couple of weeks. Then it will all start to get interesting when I get Don in to take the house away. I've sold it already and he'll remove it and clear the site and save me $15,000 in demolition against my contract price.

All coming together nicely. I guess all my good luck is starting to pay off...

Why do you reckon they titled this article "Bounce for the West" when the upper north shore and northern beaches saw the biggest gains? Maybe a title like "Continued outperformance for the Upper North Shore" wouldn't have grabbed as much attention. You couldn't call it a bounce as it comes off a stellar last 12 months of outperformance too, unlike the West. Love the media.

Cheers,
Michael

Any further suggestions?

MichaelW said:

A bit of a repeat to my last post, but I absolutely agree. Choice picking at the moment. Here's two I know of:

1. Mona Vale, Pittwater Rd. Freestanding house on 600m2+ $550K (normally would have sold for $750K but distressed seller)

2. North Narrabeen, Nareen Pde. Freestanding house on 800m2+ $450K (normally would have sold for $600K but distressed seller).

The latter is a few houses down from my PPOR, but a much shabbier little older place. Was a private seller so didn't make it onto RE.com or others so limited interest. Still, if I could have afforded it, I would have bought it. Awesome buying at $450K and will only do well for the new owner over the next decade. Should easy see $1M in that time.

Cheers,
Michael.

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Gee Michael, I'm all cashed up... Can perhaps buy about 4 IPs to the value of $550K. Any further ideas?
I will check the areas you mentioned but the infrastructure there holds me back.....
How long have you been investing in those areas and do you develop only?

coastymike said:

about 2% - 3% above inflation. Nothing spectacular.

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I keep eyeing Allambie Heights as it's not that far, no bargains as yet found, however, IMHO there's a difference between PPOR and IP approach that I take.....

Big Tone said:

I don't know, may be I got this whole property thing all wrong,
Purchased '98 250k, 180k Reno in 2002, Now a conserviative $1,175 mil.

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That's 14 years....! So you basically illustrated that some properties double every 7 years! Well done....

asdf said:

thats a lot better. All you asset rich baby boomers out there... i'm jealous... Then again i'd take youth anyday...

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ha! Ha! Ha!