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From: Robert Longmore


At the moment i am living in the inner city area, Paddington to be exact. Over the last 2 yrs there has been a very large number of Units, apartments and terrace houses built, even right next door, there has been over 300 units built and 45 terraces in the last 12 months. now this development is complete, another development is under construction just across the road. everywhere you look in sydneys eastern suburbs, there are massive redevelopments going up everywhere.
Now the banks want 40% deposit on any units bought in the area. their reasoning is there will be a massive oversupply in the area resulting in falling prices, rents in the area are already falling. I was just about to start looking for an Investment Unit in the area, now i am having second thoughts, My opinion is that the area will suffer falling values and rent returns as the completion of all this development draws near. and as a result i will hold off buying in this area for about 2 yrs, hopefully by then, prices will be a lot lower than now and people will be more desperate to sell. untill then i will start looking for other growth areas in sydney.

Any other opinions on this emerging situation?
 
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Reply: 1
From: Paul Zagoridis


Hi Robert

Have you actually been told by a bank that 40% deposit will be required? Or are you going on the scare-mongering story in yesterday's telegraph? I'd be surprised if banks are insisting on 40% deposits.

Anyway. I do think there is oversupply looming, it has limited price rises in the area (I'm 3 blocks from Hyde Park).

Vacancy rates in most of these developments are actually quite low.

Having said that I'm selling my home and renting for a while. Why own it when I can rent it at a %5 yield?
 
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Reply: 1.1
From: Robert Longmore


yep, i read the scare mongering tactics in the papers, then i rang my fin advisor, and he said that a few banks were considering changing their requirements for buying units in that area, but most was just media BS. but the construction going on is a little unsettling, especially when zettland gets underway (the area where the blue containers are stuck in the ground at strange angles, next to the eastern distributor)
 
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Reply: 1.1.1
From: Jeremy Laws


NAB is to my knowledge one of the few banks that aren't demanding at least a 30% downpayment on 2000 postcode properties. Personally I think they are a little silly, but if you want something in SYD then try 'em. Thoroughly recommend buying something old, unique, or very affordable though. Good luck
 
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Reply: 1.1.1.1
From: KEITH MYLES


HI THERE,

DEFINITELY OVERSUPPLY WILL AFFECT PRICE DUE TO THE SUPPLY AND DEMAND RULE. IF THERE ARE TOO MANY NEW PROJECTS IN THE AREA WHICH WILL AFFECT PRICING, MAY I SUGGEST LOOKING NEARBY AT A "SPILL-OVER" SUBURB THAT MAY CURRENTLY BE GOOD VALUE AND NOT OVER "ART DECO'D" FOR SOMETHING A BIT OLDER THAT YOU MIGHT WANT TO RE-FURBISH AND MAKE UNIQUE AND ATTRACTIVE.YOU MAY BE SURPRISED. REMEMBER THOUGH...UNIQUE IS THE KEY!
 
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