How to buy a property in a hot market??

[DavidMc]

I'd be taking more notice of how many seasoned, experienced investors on here who have said to steer clear of Western Sydney...

Part of successful investing is about ignoring the herd and listening to the rich people who have the battle scars.

 

[Television]

All this talk makes me a bit nervous... I want to buy a 2BR apartment in Marrickville as a PPOR (not an investment) but then I think perhaps I'm just better off paying rent and trying to invest somewhere else whilst waiting for the market to go back?

That is of course, if it goes back...

 

[see_change]

PPOR different .

Don't know marrickville market , but look at how much they have gone up in last few years.

Most people think sydney has a way to go .

Cliff

 

[RetireRich101]

Had a interesting chat with my PM in Penrith yesterday after we had decided to issue a termination notice to an arrears tenant.

They are seeing a big oversupply in the western sydney market due to the last 12-18 months of investor activity... more rentals than good tenants (there are always bad tenants)

Last weekend they had 11 open for inspections and only 2 were leased, remainder were either nobody at the open or too poor quality tenants.

Owners are dropping rents to get tenants, so the last couple of years of up up up on rents is drying up as well.

Previously, I say NO to some of tenant request such as flyscreen door to be installed and replace missing vertical blinds, I now find I would say YES to them in order to keep them in renting/renewing.

We need to balance out by having more owner occupier buying there rather than investor putting granny flats in like rabbits.

 

[RetireRich101]

All this talk makes me a bit nervous... I want to buy a 2BR apartment in Marrickville as a PPOR (not an investment) but then I think perhaps I'm just better off paying rent and trying to invest somewhere else whilst waiting for the market to go back?

That is of course, if it goes back...

Redfern which is 5km from Marrickville. I had a bank valuation done in Nov 2013 and again Feb 2014. Both valuation was done by the same firm and same individual. It came back with a 13% increase. Imagine this quarterly increase replicates this year.

 

[neK]

Previously, I say NO to some of tenant request such as flyscreen door to be installed and replace missing vertical blinds, I now find I would say YES to them in order to keep them in renting/renewing.

We need to balance out by having more owner occupier buying there rather than investor putting granny flats in like rabbits.

Looks like the NSW government Affordable housing initiative is working then isn't it
Based on that, they should ban councils from applying S94 contributions

 

[sash]

TMNT...when things drop in Sydney it will drop for a couple of years. It happened in 1989-1994 and then again 2003-2009.

Western Sydney was hit hard!

It's interesting how many agents, investors, property experts are still talking up west Sydney for example and most still say we will still see continued well above average growth but yet no one mentions the oversupply of.rentals.and falling yields based on lowered rent and increased prices

Historu suggests that part of the natural cycle, we will see a drop or a claw back but I personally get the gut feeling that "what goes up.must come down" won't apply here

Ie. Prices will not come down and the prices now will be the base of a new cycle, ie there has been a positive correction

Just my 2c
And no I don't own anything in west Sydney

Like Warren Buffet says be greedy when others are fearful and be fearful when others are greedy. Very sage (pardon the pun) advice indeed. Absolutely spot on with your comments below....I feel it is amateur hour in Western Sydney at the moment...

I'd be taking more notice of how many seasoned, experienced investors on here who have said to steer clear of Western Sydney...

Part of successful investing is about ignoring the herd and listening to the rich people who have the battle scars.

 

[ZachAnSel]

TMNT...when things drop in Sydney it will drop for a couple of years. It happened in 1989-1994 and then again 2003-2009.

Western Sydney was hit hard!


Like Warren Buffet says be greedy when others are fearful and be fearful when others are greedy. Very sage (pardon the pun) advice indeed. Absolutely spot on with your comments below....I feel it is amateur hour in Western Sydney at the moment...

Sash,
I can smell (JAWs theme) mid or end 2015 interest rate start going up. Interesting to see 2016-2017, especially 2018-2019 in Sydney..

Which means if you want to order val to draw equity, mid - end 2014 is the best (CMIIW)

 

[TMNT]

Sash,
I can smell (JAWs theme) mid or end 2015 interest rate start going up. Interesting to see 2016-2017, especially 2018-2019 in Sydney..

Which means if you want to order val to draw equity, mid - end 2014 is the best (CMIIW)

I think timing your equity redraw is good for the short term but quite dangerous if you are expecting a fall around the corner, because when all hell breaks loose, you essentially have negative equity

 

[TMNT]

TMNT...when things drop in Sydney it will drop for a couple of years. It happened in 1989-1994 and then again 2003-2009.

Western Sydney was hit hard!


Like Warren Buffet says be greedy when others are fearful and be fearful when others are greedy. Very sage (pardon the pun) advice indeed. Absolutely spot on with your comments below....I feel it is amateur hour in Western Sydney at the moment...

Absolutely. I agree with buy in gloom, sell in boom as well,

Unless you are buying for ppor, buying an ip now unless you literally decided to start looking now, in west Sydney is not a great idea.....and yes amateur hour!

 

[DaveM]

I feel it is amateur hour in Western Sydney at the moment...

Sure is. I am seeing places selling $430k and going on rental market at $390pw.

If people are struggling to get 5% in western sydney they are doing it wrong.

 

[JohnA]

Does the same advice to stay way apply to inner west Sydney? Someone said for ppor it's different. As an ip is it an amateur move to buy there now and better to revisit in a few years

 

[Richard Feynman]

All this talk makes me a bit nervous... I want to buy a 2BR apartment in Marrickville as a PPOR (not an investment) but then I think perhaps I'm just better off paying rent and trying to invest somewhere else whilst waiting for the market to go back?

That is of course, if it goes back...

Don't let talk make you anything. You've got the advantage of being able monitor the market yourself, and to continue your own research while you save the deposit.

 

[Propertunity]

All this talk makes me a bit nervous... I want to buy a 2BR apartment in Marrickville as a PPOR (not an investment) but then I think perhaps I'm just better off paying rent and trying to invest somewhere else whilst waiting for the market to go back?

That is of course, if it goes back...

Please have a look at the attached CG chart for Marrickville units - last 15 years. Can you identify a time that the prices went backwards and you would have purchased?

Does the same advice to stay way apply to inner west Sydney?

Not in my personal opinion.

As an ip is it an amateur move to buy there now and better to revisit in a few years

Based on what I see on a past yearly (7 years of buying there to date) and what I see happening right now, I think I'd have to disagree with you.

 

[wilkie0611]

Did you mean mercury? The average surface temp on mars is something like -50?C.

Lol if there were a like button I would of just pressed it

 

[Tinkler]

Buying in this heated part of the cycle is pretty dumb. No choice, no negotiating, no desperate sellers......just hurry up and pay through the nose. Patience and memory of how the cycle works, is the key. When the over supply of rents, a growing un employment rate, a cash strapped Government and massive shut down of the manufacturing industry take full effect over the next couple of years, there will be people who payed 400k now, who have to cop 360k, under a buyers terms and conditions, and there will be no need to rush the decision or grab IP's in locations that are only your second choice. Remember how it works?

 

[starter]

That you Nathan?

 

[see_change]

That you Nathan?

He's probably too busy looking over his shoulders for the debt collectors ....

Cliff

 

[ok180]

Buying in this heated part of the cycle is pretty dumb. No choice, no negotiating, no desperate sellers......just hurry up and pay through the nose. Patience and memory of how the cycle works, is the key. When the over supply of rents, a growing un employment rate, a cash strapped Government and massive shut down of the manufacturing industry take full effect over the next couple of years, there will be people who payed 400k now, who have to cop 360k, under a buyers terms and conditions, and there will be no need to rush the decision or grab IP's in locations that are only your second choice. Remember how it works?

I agree with Nathan. I think things are way too hot now in Sydney especially. Same thing happened last cycle and a couple of years later you could pick up properties that were selling in the 500's for 400k. If it is a PPOR you are looking for then I guess buy now but for investment I would wait unless you can flip it in 12 months.

 

[TMNT]

Based on what I see on a past yearly (7 years of buying there to date) and what I see happening right now, I think I'd have to disagree with you.

I see your point about there never being a drop or even plateau in marrickville

And hence your opinion

But

Where do you put in the fact of a cyclical property market?

The last seven years has been bible average growth, surely it cannot continue

Hence why I'm a bit surprised that some very central suburbs in any state if you look at their 20 year growth it's usually very straight consistently increasing!