10 Years of Stagnation - Pottsville Units Nth NSW

[Tim]

I have units which I bought in 2000 or so in Pottsville NSW for a song - they quickly went up and during 2003 prior to a downturn in property in that area they were around $260-280k.

Its interesting that they are still below this figure and I cannot help but think that they simply wont stay there much longer than 1-2 years.

Examples:
http://www.realestate.com.au/property-unit-nsw-pottsville-107139692
http://www.realestate.com.au/property-unit-nsw-pottsville-107139692
http://www.realestate.com.au/property-unit-nsw-pottsville-113528335
http://www.realestate.com.au/property-unit-nsw-pottsville-114449371
http://www.realestate.com.au/property-unit-nsw-pottsville-113474507
http://www.realestate.com.au/property-townhouse-nsw-pottsville-110059597
http://www.realestate.com.au/property-unit-nsw-pottsville-107079634
http://www.realestate.com.au/property-apartment-nsw-pottsville-110423517

Any thoughts?

Tim

 

[mikezen]

Hi tim, I can't comment on how I think the performance of your units will go but I frequent the area to surf and see friends and sometimes browse the area for Reno deals.

What I have noticed is the large amount of land currently being developed in or near the casuarina area

http://m.mydailynews.com.au/news/work-begins-on-the-casuarina-beach-village-complex/1871957/

Maybe oversupply for a while?

I realise potts is slightly south of this but maybe the development may have a effect

 

[mikezen]

Also the kings forest development which will be massive

http://www.goldcoast.com.au/article/2013/08/14/456383_gold-coast-news.html

 

[Tim]

Thanks for the replies - interesting.
Tim

 

[china]

I think this scenario parallels what happens in regional nsw e.g. central coast. There are spikes every 10-15 years and long periods of quiesence. Does this make these plays in regional centres far more speculative wherein you must sell at very specific times? This is different to say Sydney wherein there is more constant growth.

 

[Tim]

Thanks China for the reply - I am not too familiar with that part of NSW but I can easily imagine it being the same, so possibly longer cycles, but that would suggest it can't be that long until the wave moves up from Sydney, possibly a few years at most?

 

[china]

Thanks China for the reply - I am not too familiar with that part of NSW but I can easily imagine it being the same, so possibly longer cycles, but that would suggest it can't be that long until the wave moves up from Sydney, possibly a few years at most?

So a lot of people who invest in regional areas say and hope.

 

[Tim]

To be honest I am not particularly concerned I am more curious that a solid 10 years has passed with no capital gain which I think is curious and means the concept of doubling every 7-10 years is not applicable in the short term, possibly it is over a 30 year period.

If this is true then in theory these properties would be worth significantly more in the next couple of years - if they do not increase then it becomes say 12 years with little growth that is very interesting and one should look at that possibility when investing in property - that it may not go up for well over 10 years

 

[china]

To be honest I am not particularly concerned I am more curious that a solid 10 years has passed with no capital gain which I think is curious and means the concept of doubling every 7-10 years is not applicable in the short term, possibly it is over a 30 year period.

If this is true then in theory these properties would be worth significantly more in the next couple of years - if they do not increase then it becomes say 12 years with little growth that is very interesting and one should look at that possibility when investing in property - that it may not go up for well over 10 years

It is definitely a fallacy to say that property will definitely double in a ten year time frame. This is a pretty standard sales pitch of real estate agents in rural / regional areas. In 2002-3, newish or new two bed room units in Gosford were selling for 500k. At the time, I offered 400k but was rejected. These days, ten years down the track, these units are now selling for about 280k, up a little from their all time low of 240k from a year or two ago. I think ultimately, it depends on the location of the property but it would be a disastrous generalisation to assume that if you buy a property that it will double over time or even maintain original purchase price.

 

[willair]

If this is true then in theory these properties would be worth significantly more in the next couple of years - if they do not increase then it becomes say 12 years with little growth that is very interesting and one should look at that possibility when investing in property - that it may not go up for well over 10 years

I have been going down that area for 35 years and it may well have a lot to do with all the new estate that surround the area,plus I know a few investors that have been in the area for 20 years and plan to retire there in a few years ,the same as Coffs Harbour some I know paided 75k 20 years ago and some would only sell for less then 175k,in 6 pack blocks and walk too the beach and have always had problem with tenants from day one..imho..

 

[BayView]

I think this scenario parallels what happens in regional nsw e.g. central coast. There are spikes every 10-15 years and long periods of quiesence. Does this make these plays in regional centres far more speculative wherein you must sell at very specific times? This is different to say Sydney wherein there is more constant growth.

Buying regional is not where you look for Cap Growth, unless you research an area and find there are plans for some significant infrastructure, which would suggest the area is set to grow in population....new schools, road improvements and/or widening, a new supermarket, Bunnings, and so on.

Without all this, it is fair to assume that regional areas will only plod along, and may even go backwards as folk move to the cities for jobs and the populations in these areas stagnate or decline.

Places like the Central Coast seem to me to be where folk look to buy holiday houses, and/or retirees move to, and the odd younger families looking for a cheap house, but within commute to somewhere else.

While economic times are good, this will probably spike the growth a bit.

When times are not good, stagnation, a few cheap sell-offs etc.

Buying regional is probably best for long term hold and cashflow - if it is there.

 

[sports fan]

It is definitely a fallacy to say that property will definitely double in a ten year time frame. This is a pretty standard sales pitch of real estate agents in rural / regional areas. In 2002-3, newish or new two bed room units in Gosford were selling for 500k. At the time, I offered 400k but was rejected. These days, ten years down the track, these units are now selling for about 280k, up a little from their all time low of 240k from a year or two ago. I think ultimately, it depends on the location of the property but it would be a disastrous generalisation to assume that if you buy a property that it will double over time or even maintain original purchase price.

tread with caution stating any logical facts about the central coast the people on here that own PPOR and IPs there are certain its a great lifestyle and the areas prices are poised to skyrocket

 

[see_change]

It is definitely a fallacy to say that property will definitely double in a ten year time frame. This is a pretty standard sales pitch of real estate agents in rural / regional areas. In 2002-3, newish or new two bed room units in Gosford were selling for 500k. At the time, I offered 400k but was rejected. These days, ten years down the track, these units are now selling for about 280k, up a little from their all time low of 240k from a year or two ago. I think ultimately, it depends on the location of the property but it would be a disastrous generalisation to assume that if you buy a property that it will double over time or even maintain original purchase price.

But 2003 was the market peak , china.

Btw , outer sydney properties have the same boom and long flat period cycle .

That's why I think timing IS important , and for many places , now is a good time .

Cliff

 

[Tim]

Some great replies here - thanks.

Before the last boom prices in Pottsville were low, as in the first unit I bought was $86k and it tripled in value in 2 years. I now see the current price as being flat again and likely poised for growth - but who knows when.

if the prices of these units didn't average the median capital city price growth then people would eventually buy them for amazing cash flow prospects, so I tend to think they will average the same growth rates but will just go in longer cycles depicted by flat periods and sudden spurts of growth.

We'll see I guess, all the predicting in the world wont be as accurate as what actually happens.