How do you see Sydney's Western Suburbs Growing into next year?

[Tenex]

Hi Everyone,

I am new here and I have been researching over the past few months around property development.

I have been looking into Sydney western suburbs for building dual occupancies as short term investment (build and sell asap). In particular I have been watching Dundas / Dundas Valley, Ermington, Rydalmere as well as Guildford and Merrylands.

I have not particularly looked into Parramatta due to a lot of competition from many high-rises that are going up at the moment.

I am wondering what people here think about these suburbs and their rate of growth in terms of investing to purchase old properties and building a duplex.

Are there any other suburbs in Sydney that present better opportunities?

 

[Tenex]

I take it not many people are interested to comment?

 

[ZachAnSel]

Tenex,

Please use search function on this forum, your topic has been discuss many many times before..

 

[Shahin_Afarin]

Have you done the numbers based on what your profit will look like in today's market or are you banking on an increase for you to make a profit?

I think you will find it very difficult turning over a reasonable profit (if any at all) by building duplexes in the areas you have mentioned.

 

[Tenex]

Have you done the numbers based on what your profit will look like in today's market or are you banking on an increase for you to make a profit?

I think you will find it very difficult turning over a reasonable profit (if any at all) by building duplexes in the areas you have mentioned.

I have done the numbers based on today's market, based on what the land sells, approximate building costs as well as other costs.

The only way that we wont make a profit is if the market goes down.


The reason I have made this topic is that I know the mentioend areas above have grown but by how much.

For example you may get a healthier profit margin by building in liverpool than building in Ermington.

I hope that makes sense.

 

[Tenex]

Tenex,

Please use search function on this forum, your topic has been discuss many many times before..

Zach, we are talking about the comparison of a number of suburbs now rather than what was discussed in 2009.

Would you mind using the search function to find me one recent topic that attempts to compare the said suburbs? I would really appreciate that.

 

[Shahin_Afarin]

I have done the numbers based on today's market, based on what the land sells, approximate building costs as well as other costs.

The only way that we wont make a profit is if the market goes down.


The reason I have made this topic is that I know the mentioend areas above have grown but by how much.

For example you may get a healthier profit margin by building in liverpool than building in Ermington.

I hope that makes sense.

Can you share you numbers?

 

[Ace in the Hole]

Can you share you numbers?

Yep, would be interested too on duplex development numbers too.
I did my first Sydney duplex a few years ago with back of the envelope figures, no thorough feaso, and it worked out ok, nothing spectacular at the time but it was a develop to hold.

Keen to see what true profit when calculating all sales costs, GST, tax, etc based on conservative sales figures would be.

 

[gach2]

I can't say too much about future

I have considered putting a duplex in merrylands and have from what REA have advised in terms of numbers

Duplex block - $700,000 (yes you may be able to find a little cheaper)
Stamp Duty - $25k
Cost of 4 bedroom Duplex - $600,000
Sale Price - $750k each - 1.5 million
Selling cost of each Duplex $20k - 40k
Holding Cost - 50k approx

Profit before GST(notsure how the purchase is considered)/CGT = $85k

Only ways i can see there how to make a decent return is to buy cheaper land (maybe damaged house, does not fit with council requirements - but take the risk - i have personally done this and succeeded) or if your builder or doing owner builder and can get the cost of construction down.

Also a lot of people who are doing so have had good return as prices in the area have skyrocketed (upto 50% cg over 12 months)

 

[Shahin_Afarin]

I can't say too much about future

I have considered putting a duplex in merrylands and have from what REA have advised in terms of numbers

Duplex block - $700,000 (yes you may be able to find a little cheaper)
Stamp Duty - $25k
Cost of 4 bedroom Duplex - $600,000
Sale Price - $750k each - 1.5 million
Selling cost of each Duplex $20k - 40k
Holding Cost - 50k approx

Profit before GST(notsure how the purchase is considered)/CGT = $85k

Only ways i can see there how to make a decent return is to buy cheaper land (maybe damaged house, does not fit with council requirements - but take the risk - i have personally done this and succeeded) or if your builder or doing owner builder and can get the cost of construction down.

Also a lot of people who are doing so have had good return as prices in the area have skyrocketed (upto 50% cg over 12 months)

$600k plus all the other expenses relating to DA, CC, OSD, Driveway, Fencing, Retaining, etc.

 

[aaronjod]

I find it hard to see how people are going to make a profit. I don't have any experience with building but I live in the area. I watched two houses one next door, and one 2 doors down. The first sold for 900K on a 700SQM block, older style brick house (Ex Housing Commison) with a driveway leading up the side for the house behind. The second on 1000SQM with a large double story brick house, sold for $1mil.

You'd need to get at least 3 on each to make a profit and I think it would be quite risky. I don't really see them selling for more than 650K EA.
Big outlay.

Love to know the figures behind something like this for somebody that actually pulled it off.

 

[Truly Exotic]

in a hot market, unless you are very lucky or you pay well below market value,
a simple duplex development isnt going to be decently profitable, as every joe and jane is trying to do it, backed up by lower interest rates and confidence

so I'm a bit skeptical too, however, I'd love to be proven wrong

 

[Shahin_Afarin]

I find it hard to see how people are going to make a profit. I don't have any experience with building but I live in the area. I watched two houses one next door, and one 2 doors down. The first sold for 900K on a 700SQM block, older style brick house (Ex Housing Commison) with a driveway leading up the side for the house behind. The second on 1000SQM with a large double story brick house, sold for $1mil.

You'd need to get at least 3 on each to make a profit and I think it would be quite risky. I don't really see them selling for more than 650K EA.
Big outlay.

Love to know the figures behind something like this for somebody that actually pulled it off.

They don't generally make money because they don't take into consideration a whole bunch of expense such as GST, CC, etc and/or (specially with the recent Sydney market) think they have made money where in fact the market has organically risen. The thing is they they would have made the same profit by not doing anything at all.

I just don't think you can make money developing in Sydney unless its at least 4 units/dwellings.

 

[Tenex]

Ok, I agree with the people that mentioned there is a risk element involved as everyone else also wants to build. But it is almost identical to saying if you invest money in the stock market there is a risk element involved because many other people also want to make money from the stock market. If it was as simple as buy, build and make money then I think the entire premise of research and most certainly the reason behind the existence of these forums would be redundant.

I am not here to share numbers or prove anyone wrong so I rather I stayed on topic. Numbers are subjective. The amount of tax and GST that a builder pays is almost entirely different to what I would pay so that wont help at all.

Being back on topic......

There are suburbs such as Ermington that have grown significantly in value over the past few years. What costed $650k back in 2012 now costs north of $950k. I have watched the prices and in fact own a place here.

What I am keen to understand is, with regards to the suburbs I mentioned above, how the value is likely to behave in the next few years. Ermington and suburbs around it may well be on their peak already. I am trying to find out if there are other suburbs that are on the growth path but are not there yet and therefore present attractive build or renovation opportunities.

I would appreciate it if people share their thoughts with regards to the above and reasons behind them.

 

[macca446]

Ok, I agree with the people that mentioned there is a risk element involved as everyone else also wants to build. But it is almost identical to saying if you invest money in the stock market there is a risk element involved because many other people also want to make money from the stock market. If it was as simple as buy, build and make money then I think the entire premise of research and most certainly the reason behind the existence of these forums would be redundant.

I am not here to share numbers or prove anyone wrong so I rather I stayed on topic. Numbers are subjective. The amount of tax and GST that a builder pays is almost entirely different to what I would pay so that wont help at all.

Being back on topic......

There are suburbs such as Ermington that have grown significantly in value over the past few years. What costed $650k back in 2012 now costs north of $950k. I have watched the prices and in fact own a place here.

What I am keen to understand is, with regards to the suburbs I mentioned above, how the value is likely to behave in the next few years. Ermington and suburbs around it may well be on their peak already. I am trying to find out if there are other suburbs that are on the growth path but are not there yet and therefore present attractive build or renovation opportunities.

I would appreciate it if people share their thoughts with regards to the above and reasons behind them.

So basically you want someone to tell you where the next big hotspot will be,good luck with that.
Macca446
Macca446

 

[Tenex]

So basically you want someone to tell you where the next big hotspot will be,good luck with that.
Macca446
Macca446

If I was actually asking for someone to tell me the next big hotspot, do you think anyone could do that?

Why are people so opinionated?


I am just asking how some of the suburbs are going to perform in the next few years, it is all about making an intelligent conversation. Could it be that difficult to comprehend?

 

[ToGetProperty]

Hi, Tenex:

I will never have your question in my mind. However, to answer your question, we need to know how RBA is doing in Interest Rate as well as the mentioned new lending rules for coming years.

Obviously, nobody can answer the last question.

There are always some developers making huge amount of money during the boom, but declaring bankrupt after the boom is over. When the market turns, it is very very hard to sell even the price is dropping dramatically. Bank will move in and auction it regardless.

If I am a developer in this market, I will make sure most can be sold in OTP during development. Otherwise, I must be able to keep the development when the market is against me.

Any suburb is good if the market condition is good and any suburb is bad if it is going down.

 

[Tenex]

Hi, Tenex:

I will never have your question in my mind. However, to answer your question, we need to know how RBA is doing in Interest Rate as well as the mentioned new lending rules for coming years.

Obviously, nobody can answer the last question.

There are always some developers making huge amount of money during the boom, but declaring bankrupt after the boom is over. When the market turns, it is very very hard to sell even the price is dropping dramatically. Bank will move in and auction it regardless.

If I am a developer in this market, I will make sure most can be sold in OTP during development. Otherwise, I must be able to keep the development when the market is against me.

Any suburb is good if the market condition is good and any suburb is bad if it is going down.

Thanks, there are a few valid points above.

I dont think we will witness a major drop in property values in Sydney in the next couple of years, it is always possible but not highly likely and if that does happen, given the prices people pay for a house right now it will cause a great recession.

From a builder point of view anything is good because they have good control over their costs.

I am interested to find out more about the suburbs with potential and in this way I can better control the buying cost.

I am not sure if anyone around here has any information that they may be willing to share.

 

[WattleIdo]

People are replying to you and each time you're putting forward your own argument and not taking on board what they're saying. That is what they really think. This is it. It just happens to be not what you want.They're warning you to be careful but you want something else.

There are several prominent Sydney threads which may be putting out exactly what you want to read. I'm sure they would love to have another member contributing to their thread.

 

[scha9799]

According to every spuiker who wants to sell you some property in western Sydney, the property price are going up and up, not only next year ,but also every following year. You need to buy "this one" which they prepare earlier.


According to me, honesty opinion, I really have no idea how to make the duplex number work for the above areas you mentioned in today's market.


I really wish those spuikers are correct. Because we all want our property value in the western Sydney as good as the eastern Sydney, don't we


By the way, who would have thought property price in Sydney in 2013 & 2014 are totally different from 2011 & 2012 !