Fairfield, Sydney VERSUS St Marys, Sydney - Thoughts??

[BV]

Guys, I'm a little (well, more than a little really) offended by these comments. Mt Druitt/St Mary's does have it's rough elements, it's true, but so do many other suburbs. I've lived out here for nine years now with no incidents whatsoever, and no, I don't have balls of steel. In fact being female, I don't have any at all.

Skater
You're right there are good and bad people in all suburbs but some streets around there scare me.

However, there are many others that feel very safe.
The other day I went to an inspection in one of the Mt Druitt suburbs but arrived early so I decided to come out of the car and walk. I crossed the road and went around the block and then walked up and down the street stopping a few times to check out the houses etc.

One of the neighbors saw me and thought I was a thief but when we started chatting and I explained the reason for my presence he invited me in to show me his house. I was a bit skeptical at first because I didn't know the guy, I was also alone and being a housing commission area he could have been a nut case but I followed him inside and guess what?
Nothing happened. I came out of his house in 1 piece.
The only problem is...now Mrs BV thinks I'm nuts....

 

[Belbo]

Bob Carr pushed the idea of having population bases that worked and lived in the area without reliance of Sydney CBD.

The nominated areas were

-Parramatta
-Chatswood
-Campbelltown
-Penrith
-Liverpool

Thanks for that list. It makes me wonder how the current bunch running the state are thinking. Personally I can't see Penrith happening in a big without something serious like an airport being installed there (and a very fast train to get travellers quickly into the CBD, come to think about it).

 

[beachgurl]

I'd go with Guildford. The rents would be higher there than St Marys wouldn't they? As far as a "good" area goes, I'd go Guildford before Fairfield. Is a few stations closer to the city than Fairfield and like the others have said, closer to Parramatta. If you've been keeping up with proposed development, Merrylands is about to go through some major changes. Approvals for 15-20 storey buildings are likely on the main drag and the shops to be built underneath will be a big improvement on what the main street currently looks like. Not to mention the 4th stage of the Stockland shopping centre to finish next year. I reckon Merrylands will be too busy once the extra development goes in so all the more reason why people will go to Guildford - if nothing more than to get a seat on the train before everyone spills on at Merrylands.

 

[Mom]

I'd buy in Wiley Park/Lakemba. Yield is good, and I'm anticipating riple effect from price increase in neighbouring Belmore and Campsie. Check-out the prices in these 2 suburbs.

Blaktown LGA is good too, but not sure about immediate capital growth, long term look as bright as daylight.

Will stir away from Liverpool and warwick farm, I know them both to be very volatile in difficult market (high interest rates), units are also available in abundance, and some part of warwick farm used to have problems with road flooding during rainy seasons.

 

[cadence]

auburn would be the closest to city

 

[skater]

My bad, sorry! No offence intended. Just fooling around. Wasn't meaning to upset anybody out there.
No worries.

Mt Druitt/St Marys is probably a great place to invest and to live. I wouldn't know, to be honest, as I've never tried either. (Perhaps need to some day if it's as good as you say.)

Operative Me, it sounds like you're in good company in being positive for a go on St Marys, and I like your style in hitting the ground to test the mood of the main strip in person.

I find it interesting that he was positive on the main strip. Obviously he went there during the day, that is the best time to go there and you will generally see mainly 'normal' people then, however there are heaps of brothels and then the methedone clinic near the station which is very busy with some very interesting characters, early in the mornings. Best viewing time is around 6.00-7.00am, when I drop hubby at the station for work.

Anybody - How have apartments vs houses actually performed in yeild vs CG terms in the area?

The housing commission areas look much scarier than they really are. OK, yes, there are some rather dodgy people housed in some of them, but the majority of the people are OK. Just do some research before purchase as you only need one family of troublemakers to make a particular street (or part of a street) not an ideal purchase. These guys usually don't go out of their way to terrorise the areas, they usually only affect their immediate locality.

 

[skater]

Skater
You're right there are good and bad people in all suburbs but some streets around there scare me.

However, there are many others that feel very safe.

This is exactly right.

If, however, you find the streets scarey that have boarded up homes, then let me put you at ease.

Many of the empty housing commission places stay that way for 12 months or more before they sell them. The housing commission will often board up the windows to prevent vandals from doing damage to them. It is usually (but not always) kids who get inside and do damage.

These kids are not dangerous, just bored, and the enticement of an empty home sitting there for a long period of time is just too much temptation. Please note that I am in no way condoning what happens, just trying to explain what I see.

Once the home is sold and fixed up, there is often no long term problems.

The really scarey places, however, are not the boarded up homes (unless there are a lot in close proximity that have, say, been burnt out). Just by spending a bit of time in a street, you will get a general 'vibe' of whether it is somewhere to stay clear of.

 

[tlp]

Great to hear Mt Druitt area is a popular choice for Sydney investors of this forum. I grew up in the area for first 17 years of my life but havent been in touch recently but it sounds appealing. Few of you have mentioned St Marys which I once knew quite well so keen to investigate further.
Anyone have any comments on Belbo's question re units vs house/yield vs CG? that would be useful info for consideration.

TLP

 

[BV]

Will stir away from Liverpool and warwick farm, I know them both to be very volatile in difficult market (high interest rates), units are also available in abundance, and some part of warwick farm used to have problems with road flooding during rainy seasons.

Can you name 1 suburb which isn't volatile to high interest rates?
I didn't recommend all of Warwick farm, I said walking distance to Westfield.
Liverpool isn't too bad but their cbd these days is full of units and I feel that the new unit market is oversupplied so I wouldn't recommend buying new but an older unit in a good block and close to Westfield IMO won't be a bad investment.

 

[Mom]

I meant to say more volatile than others, off course no suburb is immune to high interest rate and some other factors. Back in 2006 units prices there dropped like swatted flies and didn't picked up until late 2009-10 plus their yields are also picked up much slower than the rest of Sydney because of the over supply of units. But hey, this is just a formed personal opinion. You never know what the future hold.

 

[Belbo]

The housing commission areas look much scarier than they really are. OK, yes, there are some rather dodgy people housed in some of them, but the majority of the people are OK. Just do some research before purchase as you only need one family of troublemakers to make a particular street (or part of a street) not an ideal purchase. These guys usually don't go out of their way to terrorise the areas, they usually only affect their immediate locality.

As you know, I live in Surry Hills, and I can tell you - It's as dodgy as Skater notes St Marys is. It's a weird place here: 50% of tenants are in public housing, 50% are professionals in million-dollar terraces. Nor is it dangerous, it's just mixed, and possibly even a bit real for it.

There's a few crackheads, a few wine'os, and a fair few visitors to the local methadone clinic, but aside from a few annoying teenagers bumming money for smokes on the odd corner, it's pretty pleasant.

Funny, I feel as defensive about its virtues as Skater evidently feels about St Marys, while on reflection there's probably no supporting negative reason to differentiate.

 

[skater]

As you know, I live in Surry Hills, and I can tell you - It's as dodgy as Skater notes St Marys is. It's a weird place here: 50% of tenants are in public housing, 50% are professionals in million-dollar terraces. Nor is it dangerous, it's just mixed, and possibly even a bit real for it.

There's a few crackheads, a few wine'os, and a fair few visitors to the local methadone clinic, but aside from a few annoying teenagers bumming money for smokes on the odd corner, it's pretty pleasant.

.

Well, there you go. Pretty similar really, except instead of 50% professionals in million-dollar terraces, we have a mixture of lower paid blue & white collar workers with some professionals thrown into the mix. There are some million $$ plus homes often on acreages as well as average family homes. I'd say that there are definately less than 50% in public housing too. Housing Commission have sold a lot of properties off.

This is probably why I get a bit defensive when people say that the West is inhabited by low-lifes & crims. It really isn't any worse than other places, it just costs less.

 

[Cartoon]

also consider penrith!

westfields, bus and train hubs, its like a smaller parramatta with both industrial and commercial business close to each other.

Personally my next place will more than likely be in cabramatta due to the fact Im more likley to pick up an older run down place there to renovate but thats what i like to do

For good returns st marys/mount druitt/cabramatta are my pick. For a mix of gearing and gains look into penrith!

 

[Belbo]

also consider penrith!

westfields, bus and train hubs, its like a smaller parramatta with both industrial and commercial business close to each other.

Personally my next place will more than likely be in cabramatta due to the fact Im more likley to pick up an older run down place there to renovate but thats what i like to do

For good returns st marys/mount druitt/cabramatta are my pick. For a mix of gearing and gains look into penrith!

Please elaborate, Cartoon? Penrith, really?

Can you suggest some examples as to why you are so keen on Penrith?

The 10yr CG for Penrith houses is reported in June's API as a relatively ordinary 6.3%, with an altogether reasonable yeild of 5.1%. I am curious as to what sort of future it's got for the investor, because the prices are seriously attractive by Sydney standards.

I confess I am a bit personally biased against Penrith, but for reason only that my niece lived for a while in a dead-end cul de sac there that her younger sister branded for us all in the family, "The Village of the Damned". You get the picture I'm sure, but it may not be a fair one.

 

[BV]

Please elaborate, Cartoon? Penrith, really?
The 10yr CG for Penrith houses is reported in June's API as a relatively ordinary 6.3%, with an altogether reasonable yeild of 5.1%. .

Belbo mate

As you know Sydney growth over the past decade hasn't been very good and this is what you see in API magazine. Penrith like many Sydney suburbs had a lot of growth in a short of period of time so we brought forward future growth and it was inevitable that we were going to have a longer period of price stagnation.

Ofcourse we all know that past performance isn't an indication of future growth but investors are attracted by numbers so we tend to go for higher performing suburbs thinking that the same growth will be maintained forever when this is not the case.
Suburbs are next to each other so there is always going to be a price relationship between them so when 1 suburb gets too expensive so does the neighbouring one and so on. Therefore Penrith is likely to track the performance of its neighbouring suburbs.

You might think that you're on a winner because you bought a Newtown property for $500K and is now worth $1Mil but if you bought 2 IP's worth $250K ea in Western Sydney you could have had the same result. Even if the 2 IPs didn't have exactly the same growth as the Newtown 1, your overall holding costs would have been much lower and if you timed your entry and exit from the market you could have made just as much money if not more.

I'm not saying that 1 technique is better than the other but you should also consider that the person who could afford the 2 IP's in W Sydney perhaps wouldn't be able to afford the $500K IP in Surry Hills because of the lower yields.

Something to think about

 

[Belbo]

Belbo mate

As you know Sydney growth over the past decade hasn't been very good and this is what you see in API magazine. Penrith like many Sydney suburbs had a lot of growth in a short of period of time so we brought forward future growth and it was inevitable that we were going to have a longer period of price stagnation.

Ofcourse we all know that past performance isn't an indication of future growth but investors are attracted by numbers so we tend to go for higher performing suburbs thinking that the same growth will be maintained forever when this is not the case.
Suburbs are next to each other so there is always going to be a price relationship between them so when 1 suburb gets too expensive so does the neighbouring one and so on. Therefore Penrith is likely to track the performance of its neighbouring suburbs.

You might think that you're on a winner because you bought a Newtown property for $500K and is now worth $1Mil but if you bought 2 IP's worth $250K in Western Sydney you could have had the same result. Even if the 2 IPs didn't have exactly the same growth as the Newtown 1, your overall holding costs would have been much lower and if you timed your entry and exit from the market you could have made just as much money if not more.

I'm not saying that 1 technique is better than the other but you should also consider that the person who could afford the 2 IP's in W Sydney perhaps wouldn't be able to afford the $500K IP in Surry Hills because of the lower yields.

Something to think about

HI BV,

You're not wrong I now think, plus, that better yeilds in the western suburbs will serve the investor's accumulation of properties more speedily, to say nothing of the safety in splitting your vacancy risk.

If I had my time over again I'd definitely have taken a different route. Buying into city-fringe suburbs is definitely a CG play, horribly NG'd, and hopelessly outmoded for the immediate future years of highly-likely slow CG all round.

(On a personal note: I bought the PPOR in SH in late 2004 because I worked there, the wife could walk to work in the city, and the she-devil-to-whom-I-am-devoted fell in love at first sight with our tiny sandstone cottage with it's rough-hewn internal walls. Buying the other half of this semi (that is, the house next door) in 2007 50:50 with my sister was a long-term paired-development prospect sort of thing. Buying the Alexandria apartment in 2008 was to give my brother a place to live when he came to work in Sydney, but he hated working in Sydney and went back to WA quite soon. Buying out my sister's 50% of the place next door at the beginning of this year was so she could buy her own place in Melbourne, but it suited my desire for absolute control anyway.

All NG'd; all emotionally-driven purchases; none rationally-analysed to work within a long-term financial strategy, and an annual land tax kick in the butt for my troubles to boot. I am the poster boy of impulse property buying, I admit. Hedland is my penance and my prayer! But I do wish I'd seen the light earlier: I'd have bought 10 less-costly IPs elsewhere all around the place instead.)

I reckon on hard-earned reflection that Skater's got it fundamentally right. If you're starting out, buy lots and lots of cheaper property with a view to CF neutrality asap (of course do quick schmick renos where money and time allow), and don't be tempted by the NG tax tail temptation to wag your PI terrier. It's not wise, even if you're collecting an after-tax 6 figure salary. It just makes you cash-poor, and leaves you struggling to remain motivated even if you can make ends meet.

If you're young and on a starting salary, I'd advise to live at home with the parents and buy cheaper IPs as fast as you possibly can. If you're a bit older and have money-incinerators in school, buy the cheapest PPOR you can personally tolerate and keep buying budget IPs accordingly. Only if you're seriously cash-up or well-spread PI-wise consider buying into a mining centre for some quality CF+ cream, but recognise that it's incredibly risky if anything goes wrong.

BV mate, I don't mistake myself for a winner. More of a mug punter trying to put things right with a bigger punt. Not widely recommended (indeed, not narrowly recommended)! Consider mining centres when you're fundamentally desperate or financially flush only. They're kind of like CIP profile - or worse - in both their risk and reward.