Need some great capital growth

Hi All,

Appreciate your advice/opinions re achieving some strong capital growth over the next 3-5 years. Whilst good yield is nice, only a secondary concern because serviceability is strong.

I have a PPOR and 1st IP in Canberra. Pretty highly leveraged now (80%), but want to push it out to 90% to get into the market again this year. I'm aware of the LMI, but would rather cop it now than wait another 1-2 years.

Met with a good broker (Ed Nixon) that reckons he can free up about $100k in equity to make the next purchase. So I can get my hands on $500k, maybe $550k at a stretch.

This next purchase is going to max me out for quite a while unless I can achieve somer seriously good growth in the short-medium term. At the moment I'm leaning towards a 1 or 2 bedroom apartment in Sydney's Eastern Suburbs or Inner West.

Suburbs I'm considering are Bronte/Randwick/Coogee or Chippendale/Camperdown. Hoping to buy something in 'original' condition and bring up to date.

Now I know none of us have crystal balls, but if you were me, what would you do?

Final query. Anyone know of good buyers agents that specialise in these areas?

Thanks heaps in advance!
 
......I'm leaning towards a 1 or 2 bedroom apartment in Sydney's ........ Inner West.

BINGO! But choose 2brm, balcony, car space or garage and an internal laundry.

Occassionally you can find a 4 pack art deco on a block - so huge land component (although often no car space). These always attract a lot of interest for their character but also have low strata fees (& are often OO & managed).

We've been buying for clients in the Inner West for the last 12 months or so and have seen some excellent CG - upwards of 10% in the last 6 months. From what I see on the ground, for every one property for sale there are at least a dozen serious bidders. Limited supply + huge demand = you know what :)
 
Thanks for the quick reply Propertunity.

Is there a particular reason you favour the inner west over the easter suburbs? As far as I can tell, I can get a bit more for my money, slightly closer to the CBD and a better yield.

What do you think of Chippendale/Camperdown vs the rest of the inner west?
 
Thanks for the quick reply Propertunity.
You're welcome.

Is there a particular reason you favour the inner west over the easter suburbs?
I was not saying that I favour the inner west over the eastern suburbs. In fact, Bronte for example, has been a stand-out performer.

As far as I can tell, I can get a bit more for my money, slightly closer to the CBD and a better yield.
Probably not I suspect. I think, depending on where you are getting your yield figures from, that the higher yields you speak of are being skewed by 1brm studio / student accom. that exist closer to the CBD - Camperdown, Broardway, Ultimo etc.

What do you think of Chippendale/Camperdown vs the rest of the inner west?
My personal preference is for the older blocks where you can add value with a reno rather than the newer shiny stuff. It would not matter to me if that was in Chippendale or Ashfield per se.
 
Any other thoughs on inner west apartments v eastern suburbs?

Will definitely be looking for smaller blocks (no more than 10), parking, internal laundry. Whether it's 1 or 2 bedrooms will probably depend on the suburb in question.

Appreciate any advice.
 
Any other thoughs on inner west apartments v eastern suburbs?

Yes. In the last 2 week-ends I estimate prices have risen another 10% :eek:

Small 2bedder in Summer Hill was good buying at $435K but because of the interest generated I estimated could have gone for $460-470K, sold for $502K.
2bedder in Croydon which would have taken an offer of $460K prior to auction but only had offers to $445K sold at auction today for $501K.

Eastern suburbs no better. I did an appraisal on a tiny terrace house for $mid $600K's 3 weeks ago. Agent was quoting high $500K's. Sold for $750K.
 
Far out! I might miss the boat the way things are going. Will be a month or two before I can get finances sorted.

Planning to use a buyer's agent, so hopefully he or she will be able to dredge up some deals for me...
 
I've noticed that a lot of the properties that match the specs I'm looking for are 'auction' or 'by negotiation'. I suppose it's a sign that agents/sellers are avoiding putting a price on the property and hoping (seemingly with good reason) they'll get a price above the odds.
 
I've noticed that a lot of the properties that match the specs I'm looking for are 'auction' or 'by negotiation'. I suppose it's a sign that agents/sellers are avoiding putting a price on the property and hoping (seemingly with good reason) they'll get a price above the odds.

Talking to a couple of agents today, they have been genuinely caught out by the huge prices being paid at auction. Nothing much will get listed for private treaty now - it will all be auctions. The fuse has well and truly been lit.
 
I looked for an IP in Sydney's inner west for the past year but personally I wouldn't buy here at the moment. The properties that Propertunity listed...... $500k for the usual 2 bedder apartments.... I know the suburbs well, that is an absolutely staggering price and I think you can find better value for money elsewhere, as well as a much better yield if that's what you're after.

(I bought a 3 bedder house in the inner west for mid-$500k 15 months ago, so I don't believe it's worth it to buy a small 2 bedder apartment for $500k. The rental yield would be abysmal too.)

I know Propertunity does a lot of work in the inner west so you could always have a chat to him. I found him to be a great person to deal with. In the end we purchased an IP in a different area to my preferred one (inner west) because unfortunately I was priced out of the market!
 
Talking to a couple of agents today, they have been genuinely caught out by the huge prices being paid at auction. Nothing much will get listed for private treaty now - it will all be auctions. The fuse has well and truly been lit.
You would want to hope it's a long fuse,because the way agents talk it sound to me like the lull before the storm:)..willair..
 
You can't go wrong with Coogee, Randwick or Bronte, people will pay over the odds to live in places as good as them until the cows come home.
 
Thought about Zetland or Beaconsfield area. Think this is a great up and coming (although 5 years away) area with the push towards higher density inner city living.

There are alot of original condition one level terraces that would be within your budget, or on the flip side i looked at a very large 2 bedroom, <3 year old property in Beaconsfield recently for $480k...Rent was $550pw for this i reckon.
 
You would want to hope it's a long fuse,because the way agents talk it sound to me like the lull before the storm:)..willair..

That's the difference between buyers buying because they see good value, good yields, good financing rates etc and buyers buying because they're worried they'll miss the boat, even though yields are ordinary, debt burden is growing excessively.

That said, the OP probably has missed the boat.
 
I'm not buying for any other reason other than wanting to get into the market again, build equity and buy again and again until my early retirement. Haha.

I might have missed the Bronte boat, but there are plenty of other opportunities within my range. Zeatland and Beaconsfield have been mentioned. And I still like Randwick, Chippendale, Camperdown for their growth prospects.
 
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