$8 billion boom as Parramatta reaches for the sky

[kamchatsky]

I reason within 2 years.

Well they said 2016 is when it will be completed. So it means as soon as it is finished.

Also I assume that those number does not include sinking fund, right? That could be another large sum per quarter? Once council and water rates get added, it seems to become a large hole to suck money for "negative gearing purposes", even though the 25K depreciation (first year only) helps.

Is it normal to "underquote" strata at the start of OTP selling? I noticed a lot of strata are less than $1000 per quarter when they try to sell OTP units to me. I have seen a lot and they all seemed very expensive. I haven't seen a reasonable one yet for the last year.

Another thing (Off topic), another agent (which I knocked back from buying an OTP unit earlier) just called me advising that they are selling all units of an OTP development in 1 hit, instead of stages as originally advised, and they will reduce the price of units by 20K each to sell. They said that I should not miss the opportunity as it is a "discount bargain not to be missed". Based on this information, I feel that the market has peaked and a lot of developers are trying to sell as many units now as possible. The OTP development is at Hurlstone Park.

I will be waiting on the sidelines for now to see what happens when all of these units are completed and hit the market at once. I will see if there are any bargains to pick up.

 

[dabear]

Well they said 2016 is when it will be completed. So it means as soon as it is finished.

Also I assume that those number does not include sinking fund, right? That could be another large sum per quarter? Once council and water rates get added, it seems to become a large hole to suck money for "negative gearing purposes", even though the 25K depreciation (first year only) helps.

Is it normal to "underquote" strata at the start of OTP selling? I noticed a lot of strata are less than $1000 per quarter when they try to sell OTP units to me. I have seen a lot and they all seemed very expensive. I haven't seen a reasonable one yet for the last year.

Another thing (Off topic), another agent (which I knocked back from buying an OTP unit earlier) just called me advising that they are selling all units of an OTP development in 1 hit, instead of stages as originally advised, and they will reduce the price of units by 20K each to sell. They said that I should not miss the opportunity as it is a "discount bargain not to be missed". Based on this information, I feel that the market has peaked and a lot of developers are trying to sell as many units now as possible. The OTP development is at Hurlstone Park.

I will be waiting on the sidelines for now to see what happens when all of these units are completed and hit the market at once. I will see if there are any bargains to pick up.

The issue is Canterbury council is doing next to nothing when Parramatta has major plan to attract people flow.

Aged infrastructure and low-social-eco demographics. Just lack of growth drivers despite it's not that far to the CBD.

 

[ije]

So, given some of the comments above...does it make sense from a long term ( 10+years ) to buy into any of old the unit blocks that in a few years ( based on public plans from the council ) will be rejuvenated? (near river foreshore, near autoalley, etc )

I personally believe Parra has the makings of the next CBD - i live nearby and work there. We are currently looking at a unit that is older, but great location to the river. However, can also see the benefit of something bigger, newer, cheaper, but in Westmead ($380k) for example.

I mean, for around $400-440k for an older unit (2/1/1) and $4k per year strata/water/fees getting approx $400pw - whats the evaluation on the potential for its value to move strongly, pulled up by the price of the OTP modern units being built? Or would these older units just become the poor cousins of new units?

PS - happy to meet any investors in Parra - i can show you around the neighborhoods in a lunch break no probs.

 

[monalisa]

I mean, for around $400-440k for an older unit (2/1/1) and $4k per year strata/water/fees getting approx $400pw - whats the evaluation on the potential for its value to move strongly, pulled up by the price of the OTP modern units being built? Or would these older units just become the poor cousins of new units?

I would stay away from the OTP, and instead get something older where I can add value.

Make sure you look at whether the units are high density units. In my view it is better to have in a smaller complex, as there is this unique factor. Also consider supply / demand.

 

[lamecrocs]

Supply and demand

Yea no doubt parra are experiencing so much development and it will be become one of the biggest hub in Sydney. However, I could also see there are so many high rise apartments being built in the area which would impact the high supply.

Do you think there will be a continue demand in the area?

 

[kamchatsky]

Yea no doubt parra are experiencing so much development and it will be become one of the biggest hub in Sydney. However, I could also see there are so many high rise apartments being built in the area which would impact the high supply.

Do you think there will be a continue demand in the area?

It reminds me of Melbourne where there is so many apartments approved and being built right now, it is putting a cap on the prices of those apartments. Parramatta can certainly becoming a big hub but there will be a lot of supply coming up.

 

[ije]

Thanks - yes, over supply is a concern.

I noted that http://forecast.id.com.au/parramatta/about-forecast-areas?WebID=250 forecasted - "2015 population forecast for Parramatta CBD is 10,647, and is forecast to grow to 27,498 by 2036." There are less modest growth areas in the Parra council areas ( like only 800 people in my neighbourhood that is on the edge of Parramatta council!)


Also, on the employment side, i noted the tight commercial office supply, which i hope means more employment opportunities.

http://content.knightfrank.com/research/450/documents/en/parraoff1409-2344.pdf

Will population growth match evenly the supply rate - how to tell, how to tell??!!


That all said, I am still not sure how to evaluate a lower cost investment in Westmead vs older but higher cost in Parra CBD.

 

[lamecrocs]

Lje, thanks for posting that interesting reports.

For your question, it really depends on an individual lifestyle.
For young couple (no kids), it's preferably to be close to transport, amenities, etc. e.g. I consider units around the south side of parra more convenience compare to the north.

However, your may consider north parra or westmead to be more suited for families. It's not to close/far from the amenities.

In terms of the location, you cant really go wrong with either westmead or parramatta. Just have to choose a well maintained unit. Hope it helps.

 

[redwing]

Parramatta Square development moves forward after demolition approvals

Plans to transform the heart of Parramatta into "western Sydney's Martin Place" have taken a major step forward after years of delays and cost blowouts.

A path has been forged for the development of Parramatta Square's key sites, with the demolition of local council offices and city library approved and workers preparing to move.

The proposed $2 billion Parramatta Square redevelopment is one of the largest urban renewal projects in the country and aims to position the city as a rival to the Sydney CBD.

 

[Player]

Parramatta Square development moves forward after demolition approvals

Just returned from Parramatta after spending two days there last week. It's changing that's for sure. Plenty of cranes in the sky already....... all residential. The first stage of Parramatta Square commercial development has already been pre-committed by Uni of Western Sydney for additional campus. Then there is more commercial offices to come and another residential tower. Circa 90 stories if I'm not mistaken.

Nothing else like it in Australia. A city within a city.

 

[Rixter]

A city within a city.

Otherwise known as a large satellite cbd.

 

[devank]

It should be renamed 'Sydney Central'

 

[JohnHenry]

I would stay away from the OTP, and instead get something older where I can add value.

Make sure you look at whether the units are high density units. In my view it is better to have in a smaller complex, as there is this unique factor. Also consider supply / demand.

Yes, that's true so pick any existing older apartment or house within the first 5 KM of Parramatta region, it will be a good choice for long term investment.

especially when this news has been published: http://www.smh.com.au/nsw/parramatt...ter-demolition-approvals-20150518-gh3ydx.html

 

[JohnHenry]

Well they said 2016 is when it will be completed. So it means as soon as it is finished.

Also I assume that those number does not include sinking fund, right? That could be another large sum per quarter? Once council and water rates get added, it seems to become a large hole to suck money for "negative gearing purposes", even though the 25K depreciation (first year only) helps.

Is it normal to "underquote" strata at the start of OTP selling? I noticed a lot of strata are less than $1000 per quarter when they try to sell OTP units to me. I have seen a lot and they all seemed very expensive. I haven't seen a reasonable one yet for the last year.

Another thing (Off topic), another agent (which I knocked back from buying an OTP unit earlier) just called me advising that they are selling all units of an OTP development in 1 hit, instead of stages as originally advised, and they will reduce the price of units by 20K each to sell. They said that I should not miss the opportunity as it is a "discount bargain not to be missed". Based on this information, I feel that the market has peaked and a lot of developers are trying to sell as many units now as possible. The OTP development is at Hurlstone Park.

I will be waiting on the sidelines for now to see what happens when all of these units are completed and hit the market at once. I will see if there are any bargains to pick up.

Yes, that's why I don't prefer OTP apartment, the new building has no track reord of what things was repaired or need urgent repair until too late the builder went bankrupt ;-)

and also High Strata fee >$ 800 is too much cost to bear for a negative gearing IP.

 

[JohnHenry]

Thanks - yes, over supply is a concern.

I noted that http://forecast.id.com.au/parramatta/about-forecast-areas?WebID=250 forecasted - "2015 population forecast for Parramatta CBD is 10,647, and is forecast to grow to 27,498 by 2036." There are less modest growth areas in the Parra council areas ( like only 800 people in my neighbourhood that is on the edge of Parramatta council!)


Also, on the employment side, i noted the tight commercial office supply, which i hope means more employment opportunities.

http://content.knightfrank.com/research/450/documents/en/parraoff1409-2344.pdf

Will population growth match evenly the supply rate - how to tell, how to tell??!!


That all said, I am still not sure how to evaluate a lower cost investment in Westmead vs older but higher cost in Parra CBD.

Hi ije,

after reading the article on the Outlook section from Knight Frank:

The progression
of Parramatta Square in conjunction with
the sharp upturn in residential
development, which will provide around
7,000 new apartments to Parramatta over
the next five years, are expected to boost
local amenity and provide an attractive
option for businesses looking at a non-CBD
location.

7000 apartment sounds too many or over supply for the next 5 years.