Home truths - don't buy there

[kamchatsky]

What the? Parramatta?

Wondered if anyone actually subscribes to his report?

http://www.news.com.au/business/money/story/0,25479,23613617-5013951,00.html

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Money: Property

Article from: The Australian

Brought to you by
Home truths - don't buy there

By Maurice Dunlevy April 29, 2008 12:01am

* List released of worst real estate market
* Sydney's western suburbs dominate list
* Agents outraged at city's listing

MT Isa may be the worst place to buy a house, but Sydney's western suburbs dominate a list of 13 of the nation's top no-go zones for residential real estate investors.

Housing hotspot specialist Terry Ryder says Parramatta, Bankstown and Blacktown have become the home repossession capitals of Sydney.

His website report says Bankstown offers "a smorgasbord" of reasons not to buy, and the Blacktown/Mt Druitt region is regularly held up as a symbol of society gone wrong.
Related story List backlash: Real estate agents outraged at listing
Related story Construction slump: Less houses being built

Ethnic tensions, high crime rates and aircraft noise are reasons to stay away from Bankstown, and Blacktown/Mt Druitt is no better.

"Imagine living in an area where there's an arson attack on a home every second day," Mr Ryder says.

Inner-western Chippendale, the site of a planned $2bn redevelopment of the former CUB brewery, is Australia's best investment opportunity.

"Parts of the inner west and inner south show plenty of promise," he says.

Only two other major capital areas - Melbourne's Lyndhurst and Brisbane's Dinmore - are on the no-go list, which Mr Ryder says is made from observations of the property market based on 26 years as a real estate researcher, writer and investor.

Mr Ryder runs a website that attempts to identify property hotspots before they happen.

He says his list of worst places to invest is meant to help buyers avoid investment property where prices could fall.

"Investors can make big money buying in the right places at the right time," he says.

"Equally, they can lose money by buying in the wrong places."

The Sunshine Coast is a surprise inclusion because of affordability and infrastructure, an apartment oversupply and dubious marketing practices used by real estate agents.

Other no-go zones are the northern suburbs of Darwin and the Northern Territory's Katherine because of a mix of defence-induced inflated property and social problems.

Buyers are urged to stay away from flood-prone Giru in far north Queenland, crime-ridden Shepparton in regional Victoria, and polluted and over-priced Esperance and Kalgoorlie in Western Australia.

Mr Ryder regards outback Queensland mining city Mt Isa as the worst place to invest.

As well as being the most polluted population centre, Mr Isa has inflated prices and low rental returns.

The places property investors should avoid

* Bankstown, western Sydney, NSW
* Blacktown, western Sydney, NSW
* Darwin, northern suburbs, NT
* Dinmore, Brisbane, Qld
* Esperance, southeast, WA
* Giru, north Qld
* Kalgoorlie, outback WA
* Katherine, outback NT
* Lyndhurst, Melbourne, Vic
* Mount Isa, western Qld
* Parramatta, western Sydney, NSW
* Shepparton, northern Vic
* Sunshine Coast, Qld

 

[steveadl]

Was just about to post the link myself Edison.

I don't know the Sydney market - but I'm surprised he's saying avoid the western suburbs? I thought it would be a chance to get some bargains in the current market - even if they don't take off immediately. Nice houses, on subdivisable blocks for under $300k in a capital city like Sydney sounds good to me - even if they are on the outskirts?

 

[feihong]

I think what lacked in the report is the timeframe of the defined "no go zone". Over long term Sydney outskirts should perform very well, but perhaps the ongoing reposession will cap the upside growth in short term (prob. 2-3 yrs?). Lyndhurst in Melbourne actually has a train station proposed, but god knows when it will happen, so until then it will be a "no go zone" for at least a while..

 

[crc_error]

I like how realestate agents are outraged!

hahaha

they expect easy sales with easy commissions handed their way!

don't think so..

 

[sash]

Great news....now only if prices in Bankstown, Parramatta, and Blacktown head down a bit further in response to all the sheep out there! Thanks Mr. Ryder you have just given me a free kick!

Look forward to getting into these suburbs shortly....within the next 6 months...

Whilst, I have bought Terry's reports previously...I think he may be off the mark this time. Took a recon expedition over the last few weeks through these suburbs....and they are changing rapidly. The rents incrceases in these suburbs are incredible.....they have gone up 40%. What used to rent for 160170pw is now renting for 230-280pw....mind you these are the low end units...

 

[alexlee]

Western Sydney, being generally lower income areas, will be more vulnerable to higher food prices, higher interest rates and a recession. So short term, there may be a lot of pain still in store.

However, long term I think it has potential. Where else can you get a decent-sized block of land in Sydney with transport for <300k? In time you'll have people from other areas pushing west.
Alex

 

[tropic]

Inner-western Chippendale, the site of a planned $2bn redevelopment of the former CUB brewery, is Australia's best investment opportunity.

"Parts of the inner west and inner south show plenty of promise," he says.

How about inner-western Chippendale? How promising is this development and what kind of money involve to own a unit/house?
How about transport etc?

 

[Ausprop]

mt isa has served me pretty well!

 

[marg4000]

Heard a report on the radio this morning.

Check the reason he put the Sunshine Coast on the list (he lives there!!):

"The Sunshine Coast is a surprise inclusion because of affordability and infrastructure, an apartment oversupply and dubious marketing practices used by real estate agents."

"lack of affordability and infrastructure" sounds like ALL of SEQ.

We have an IP (house) on the Sunny Coast. New tenant in March. Time between tenants? Two hours - the agent has to do an exit report.

Marg

 

[Peter Parker]

I'll comment on Melbourne's entry, Lyndhurst.

It's true that it has almost no services and no public transport. But that's equally true for other places like the Sandhurst Club estate (Carrum Downs) and other suburbs such as Gowanbrae. And it's closer to Melbourne than fast-growing areas such as Cranbourne.

Lyndhurst may get a station nearby at Lynbrook (marked in Melways, construction indefinite) but my first impression when I went through last week were the huge power pylons. And the water purification plant & boarding kennells might put off the armchair investor.

But if there was a $100k house there, I'd consider it an excellent buy.

As for the western Sydney suburbs, they might not be regarded as 'good', but they're also cheap. So 'value for money' in such places could actually be OK since the 'value' doesn't need to be very much given their low prices. Possibly even be good enough to be called an 'ugly duckling', which is another emotive term (like 'no go') that Ryder is fond of.

If I was to compile a list of 'no go' suburbs, I'd start not with the cheaper suburbs, but the somewhat expensive (newish) suburbs that offer no greater benefits established suburbs nearby, and hence represent poor value for money.

 

[BV]

I dissagree with his opinion on Sydney's Western suburbs.
Does he know how tight the Sydney rental market is?
I doubt that he's done his homework or he wouldn't be making such claims.

IMO Repossesions are not going to last forever and this is the time to get in because when IR's come down there will be mad panic and prices will go up again.

Cheers

 

[skater]

I would also dissagree.

I live in Western Sydney & there are certainly some very good buys to be had. It's true that there are also repossessions, but that doesn't mean it is bad buying now, just because someone paid too much at the hight of the boom & now can't afford the repayments.

 

[sivakumar_sr]

First I would disagree for Sydney Western Surburbs...

I lived in Parramatta, Toongabbie, Pendle Hill, Granville for years and all are west part of Sydney. People are crazy in moving into these suburbs and want to settle here. Have a look at the open for inspection on rental properties. You are competing with atleast 30 other tenants. For last 6 years people from Parramatta been pushed to the next cloest train station suburbs because of afordability. Even I did the same when I lived in Parramatta and then bought my first home in Toongabbie in 2004. People started going further out to the next train stations from Parramatta to West Mead, Wentworthville, Pendle Hill, Toongabbie, Seven Hills and even to Blanktwon. When I started searching for house in 2003 I couldn't see anything under 500 in Westmead and even wentworthville was expensive. I moved further out and bought 4 bedroom house in Toongabbie for 420,000K. But for last few years prices had gone down and now it had given the opportunity to buy in the bottom cycle. I can see more investors turning back to Sydney.

Last week I bought One three bedroom apartment in Parramatta for 299,000 which is bargain. The tenants are happy to stay for 350 per week which is great investment.

I won't say Sydney west is bad place for investment. This is the right time to buy good properties for less in Sydney West.

 

[kaf]

Just got my land valuation for an IP on the Sunny Coast - don't have too much of a problem with a 20% rise last year . But Terry must know, it's all over now!!

kaf

 

[accumulator]

And I'm ecstatic about the gains I've made building IPs in Sandhurst.
As a by the bye, no service is more than a short drive away though, from either Lyndurst or Sandhurst.

 

[ritchie77]

Narangba

Further to Ryder slaying the SC..... He also noted Narangba as another "no-go area".... I was a bit dissapointed on this 1 coz I bought an IP there last year as well as having another at Morayfield!

I did not catch the reasoning behind this one but to me, it seems lots of new roads/estates r going in and good shops/schools etc together with the train line and redcliffe only 10 mins away so I thought it was a good investment? But anyway am no expert...... Anyone shed som light on this area?
Thanks guys,
Ritchie77

 

[Gatoblanco]

My opinion is that Narangba and Morayfield have good aspects.
They are on the northside of BNE which is good. On the trainline to the sunshine coast.
Historically the capital gains over the last 10yrs have not been as good as closer suburbs but that is generally the case for most suburbs relatively further from the CBD (other factors held constant). I will buy in Morayfield next I think because that is the closest I can afford to the CBD on a trainline on the northside.

 

[ritchie77]

Thanks Gato.....
Yeh, I like the Northside as well better than GC corridor (which is very popular!!) North has good trains, the airport and easier access to beaches, although it doesnt have a big satellite centre like Ipswich? (maybe Caboolture)
Cheers guys

 

[Gatoblanco]

The CBD is on the northside. Some people are surprised when they here that there IS a south side of Brisbane.

Chermside is the satellite centre on the northside. It is like a mini CBD with bus exchange and big mall and big govt buildings

Although I think the gold coast is a nice place.

Ipswich is crap. Some parts have done well recently (except collingwood park) but in the long run (just as historically) it will not do as well as northside suburbs

 

[alexlee]

Ipswich is crap. Some parts have done well recently (except collingwood park) but in the long run (just as historically) it will not do as well as northside suburbs

Gato, are you saying that the northside suburbs will always be more expensive than Ipswich? If so, I agree with you. But whether a suburb 'does as well' is a matter of %, not absolute value. So say a northside house is $500k, and Ipswich is $250k now. In 10 years, the northside house is $1m and the Ipswich house is $500k. Which one has 'done better'?
Alex