Inner Sydney: Time to buy?

[House_Keeper]

I have been thinking for a while that Sydney should be the next market to bounce back. I am considering purchasing another investment property in Sydney inner west. Considering the current market, I see the following pros and cons:

Pros:
Falling interest rates. The financial market expects interest rates to drop by another percent, bringing mortgages rates down to 7%.
Tight rental market
Low supply of new housing

Cons:
Concern over economy in short term. While Australia may avoid a recession, Sydney is likely to be hardest hit by the downturn.
Tighter lending criteria restricting ability to borrow.

Overall, it looks like we're moving into a period of low supply & lower demand. Buying now seems speculative. Since the real estate market moves slowly, there is plenty of time of observe the market.

My inclination is to observe the market and look for signs of a recovery.

Anyone else willing to share their thinking?

Cheers,

 

[devo76]

I am targeting inner west also and i have also decided to wait.If there is a slump regardless of the size it does not change the fact that Sydney appears to be the next to move. It might just be from a lower than current value or a longer time frame. the points you mentioned may also limit how far it drops compared to some other areas.

I have cash and loans ready and im watching and waiting until early next year. That should be enough time to pick the direction things will move and by how much.

 

[tess85]

I've always been fond of the inner west and I agree that rental demand is very high in that area. although it is somewhat overpriced, I can't see it having the same CG it has had in the past decade. I'm considering places not on the inner-west train line (eg. the campsie/canterbury one)... more affordable for me (FHB) and likely to gentrify (as opposed to already gentrified)

 

[tess85]

Just wondering (and slightly off-topic), I've lived in the inner west all my life and it seems that public transport & traffic is becoming increasingly bad. Travelling from one part of the inner-west to another can be a nightmare on Saturdays. Catching a filthy packed train to work every day is putting me off living in such a high density area. Now I just wonder whether the inner-west is going to be less appealing, esp. if sydney's population keeps expanding at this rate? surely places in the west will have a proportionally greater increase in demand compared to the inner west?

 

[House_Keeper]

Public transport & traffic is getting worse everywhere, not just in the inner west.

Ever tried to drive to the city through the M5 tunnel in the morning? I'm not sure that the places further out will be more appealing as traffic gets worse.

Cheers,

 

[Tash_85]

Public transport & traffic is getting worse everywhere, not just in the inner west.

Ever tried to drive to the city through the M5 tunnel in the morning? I'm not sure that the places further out will be more appealing as traffic gets worse.

Cheers,

Once and never again- I live south west Sydney, takes me 45 min on the train. Train is not so bad, driving i wouldnt even try. In saying that though my suburb i live in there is high rental demand, which is why i bought out this way, but also because of affordability and its my FH. But, its going to be rented as an investment. I am currently looking to rent in the inner west but its quite pricey and i dont like ashfield where it starts to get cheaper. Its not a very nice suburb in my opinion. I was looking at 150/160 a week but its prety much impossible. ( 2 bedrooms 160 per person)

 

[imonmyway]

im from melbourne so forgive my ignorance but what suburbs are in the inner west?

 

[Humphrey]

im from melbourne so forgive my ignorance but what suburbs are in the inner west?

According to Domain.com.au:

http://www.domain.com.au/Public/ChooseSuburbs.aspx?mode=buy&state=NSW&areas=Inner+West

 

[tess85]

there's a few things there that I wouldn't classify as inner west
- beaconsfield, alexandria, etc. are more like inner city
- westgate (i had to look this up cos i'd never heard of it! and i've lived in the inner west all my life)

otherwise that's a useful link.

 

[tess85]

Public transport & traffic is getting worse everywhere, not just in the inner west.

Ever tried to drive to the city through the M5 tunnel in the morning? I'm not sure that the places further out will be more appealing as traffic gets worse.

Cheers,

good point. I don't venture out much from the suburbs around me but I can appreciate that everywhere is getting terrible in terms of traffic.

Driving through Ashfield drove me nuts on Saturday. Was trying to get from an inspection to Croydon and couldn't get there in the end due to traffic!

 

[sash]

Patience grasshopper.....we still have a way to go for things to playout!

I am also waiting in the wings....unemployment is the last indicator...wait for that to stablilise before jumping in. I personally am of the opinion we have a couple of more months before things bottom out.

Cheers
Sash

Overall, it looks like we're moving into a period of low supply & lower demand. Buying now seems speculative. Since the real estate market moves slowly, there is plenty of time of observe the market.

My inclination is to observe the market and look for signs of a recovery.

Anyone else willing to share their thinking?

Cheers,

 

[Glebe]

All I hear from my friends are redundancies at their companies

friend a - optus general manager flew in and made 200 people redundant
friend b - at ubs half our floor has been made redundant
friend c - at bankwest we're not sure what's going to happen to us now that CBA has bought us
friend d - at telstra they've made so many of us redundant due to their transformation project

It's great that interest rates are coming down but I wouldn't buy within the next 6 months.. the economic slowdown is arriving..