Northern Sydney Units

Hello all,

I'm looking for other people's opinions regarding the rentability and capital growth potential of Units from Gordon to Hornsby (Northern rail line in Sydney). I am researching 2 bd units in this area and have a broad budget of between 500-650k.

Looking to understand how easy these units rent at 600-650 pw and conservative estimates of capital growth.

All feedback appreciated

Cheers
SC
 
I assume you mean the North Shore Rail line?

After Chatswood the North Shore line is Roseville > Gordon > Turramurra > Hornsby

The Northern Rail line after Chatswood is North Ryde > Epping > Pennant Hills > Hornsby

For the newer units $600 per week is achiveable for a 2 bedroom/ Bathroom with parking in a good location around Gordon/ Pymble. Capital growth in this area might not be the best because there have been so many units built at one time and many more on the way.
 
I assume you mean the North Shore Rail line?

After Chatswood the North Shore line is Roseville > Gordon > Turramurra > Hornsby

The Northern Rail line after Chatswood is North Ryde > Epping > Pennant Hills > Hornsby

For the newer units $600 per week is achiveable for a 2 bedroom/ Bathroom with parking in a good location around Gordon/ Pymble. Capital growth in this area might not be the best because there have been so many units built at one time and many more on the way.

Yes sorry the North Shore line.

I am concerned about the number of units around this area and the potential impact on CG, I think this is the way ahead for parts of Sydney, most heavy rail lines will have this redevelopment due to the NSW denser rezoning plans (LEP).

I'm willing to consider other area's and are open for suggestions.. so will be researching it for a bit. What would you and others recommend?

Also would consider buying house.
 
......... rentability and capital growth potential of Units from Gordon to Hornsby (Northern rail line in Sydney). I am researching 2 bd units in this area and have a broad budget of between 500-650k.

I am a bit concerned about the potential future CG of these in the near future because there are so damn many of them. Bear in mind that bright shiny new ones - like those that have popped up all over in the last 12-24 months - often do not have much CG in the first few years as that goes to the developer's bottom line profit.

I've made mention of this on a few posts before, but personally I'd be looking to take Residex's advice on this, from his newsletter:
http://www.residex.com.au/newsletter/source2010_04aMC.html?content=commentary&from=news0410a

Sydney units which are well-positioned (close to transport hubs) and more than a decade old look to me as if they are going to see the best growth. Having said this, avoid suburbs where there are significant volumes of new development taking place.

So we have been buying in the Inner West - Newtown out to Croydon and everything in between. Very pleased with the CG there!
 
There are a few ways to look at this. Ku-Ring-Gai (Roseville to Wahroonga) had a very low number of units prior to 2004 and so compared to many areas the ratio of houses to units is still relatively small. They are all concentrated around the rail line and the Pacific highway with the exception of the St Ives developments so they dont affect the general area as much as in other parts of Sydney but are close to transport and shops.

The next deluge of units is supposed to be built only around the railway stations in the town centres providing a refresh for these centres. Ku-Ring-Gai is a pretty and leafy area around 20 to 30 mins by train from the CBD and close to the employment areas of North Sydney, St Leonards, Chatswood and Macquarie Park so these are positives.

They are building so many units at once because apparently there is demand. The units are not cheap to buy so they have done well so far. Once the units in the town centres are built I would be surprised if there was many more built in the area. The existing units should then start to show some nice CG. So if you hold, the results should be decent. If you want a quick turn over this is not the area to buy in right now.

There is also the fact that the area is one of the most blue ribbon Liberal seats in the country. Its also the seat of the NSW opposition leader Barry O'Farrell. He is well aware of the local angst surrounding the building of so many units in Ku-Ring-Gai.

He has made statements that suggest if elected he may assist the local council in regaining control of its planning powers (stripped by the NSW Labor Government and given to their own chosen "planning panel") and then you will see a lot less units built. They may still revamp the town centres I guess but with lower density so as to stop a repeat of their current situation. This should see some good CG for the area when supply dries up as the area is desireable but obviously that is all crystal ball type stuff.

You then have to consider where they will build the units Sydney needs. I would think it would be the inner to middle Western corridor but that will require transport improvements.
 
I am a bit concerned about the potential future CG of these in the near future because there are so damn many of them. Bear in mind that bright shiny new ones - like those that have popped up all over in the last 12-24 months - often do not have much CG in the first few years as that goes to the developer's bottom line profit.

I've made mention of this on a few posts before, but personally I'd be looking to take Residex's advice on this, from his newsletter:
http://www.residex.com.au/newsletter/source2010_04aMC.html?content=commentary&from=news0410a



So we have been buying in the Inner West - Newtown out to Croydon and everything in between. Very pleased with the CG there!

Thanks for the URL, its was very informative. I'm going to keep researching and keep my options open. An IP should be at least a 10 year plan and buying a quality asset in a good area has worked well for me previously.

When did you purchase the units in the areas mentioned? Where they recently built or older than 5-10 years, also where they 2 or 3 bedders?

Cheers
 
An IP should be at least a 10 year plan and buying a quality asset in a good area has worked well for me previously.
Agree with you 100% there. And even the bright new shiny ones in Hornsby > Gordon should do well in that kind of timeframe IMO (and as Red Car says).

When did you purchase the units in the areas mentioned?
I do it for a living :) - but lots of purchases over the last 12 months especially.

Where they recently built or older than 5-10 years,
Definitely older blocks of 9, 12 or 20 mostly. No lifts. Generally built in the 1960's & 70's. Some in the 1930's - Art deco types. Although I just purchased an 8 yr old, 2 storey townhouse there this morning.

also where they 2 or 3 bedders?
Mostly 2 brms. 3brm are harder to find and also attract a premium (but also more in rent too).
 
There are a few ways to look at this. Ku-Ring-Gai (Roseville to Wahroonga) had a very low number of units prior to 2004 and so compared to many areas the ratio of houses to units is still relatively small. They are all concentrated around the rail line and the Pacific highway with the exception of the St Ives developments so they dont affect the general area as much as in other parts of Sydney but are close to transport and shops.

The next deluge of units is supposed to be built only around the railway stations in the town centres providing a refresh for these centres. Ku-Ring-Gai is a pretty and leafy area around 20 to 30 mins by train from the CBD and close to the employment areas of North Sydney, St Leonards, Chatswood and Macquarie Park so these are positives.

They are building so many units at once because apparently there is demand. The units are not cheap to buy so they have done well so far. Once the units in the town centres are built I would be surprised if there was many more built in the area. The existing units should then start to show some nice CG. So if you hold, the results should be decent. If you want a quick turn over this is not the area to buy in right now.

There is also the fact that the area is one of the most blue ribbon Liberal seats in the country. Its also the seat of the NSW opposition leader Barry O'Farrell. He is well aware of the local angst surrounding the building of so many units in Ku-Ring-Gai.

He has made statements that suggest if elected he may assist the local council in regaining control of its planning powers (stripped by the NSW Labor Government and given to their own chosen "planning panel") and then you will see a lot less units built. They may still revamp the town centres I guess but with lower density so as to stop a repeat of their current situation. This should see some good CG for the area when supply dries up as the area is desireable but obviously that is all crystal ball type stuff.

You then have to consider where they will build the units Sydney needs. I would think it would be the inner to middle Western corridor but that will require transport improvements.

Great point, this is my thinking as well. When you compare the options of Sydney, Ku-Ring-Gai ticks a lot of the boxes. Its hard to forecast CG, but if you think about future population growth in Sydney over the next ten years I think the asking price of a 2 bedroom unit will look relatively cheap in 2021.

I'm looking for a long term investment in a good area. My thinking is that in the future I could utilise this type of asset if I move out of Sydney or have children that are working or studying in Sydney, so a well placed quality asset could become multifaceted.

I read in other posts you have a unit in Pymble, is this working well for yourself? Also is it new, 2 or 3 br etc

Cheers
 
Agree with you 100% there. And even the bright new shiny ones in Hornsby > Gordon should do well in that kind of timeframe IMO (and as Red Car says).

I do it for a living :) - but lots of purchases over the last 12 months especially.

Definitely older blocks of 9, 12 or 20 mostly. No lifts. Generally built in the 1960's & 70's. Some in the 1930's - Art deco types. Although I just purchased an 8 yr old, 2 storey townhouse there this morning.

Mostly 2 brms. 3brm are harder to find and also attract a premium (but also more in rent too).

What is the methodology of buying an older unit? Is it the lower buy in price and potential CG? Also is the lack of lift and other unit facilities a positive for lower strata costs?

A lot of commentators reference older unit blocks and I'm sceptical to why this the case.. but I maybe over analysing things :)
 
Great point, this is my thinking as well. When you compare the options of Sydney, Ku-Ring-Gai ticks a lot of the boxes. Its hard to forecast CG, but if you think about future population growth in Sydney over the next ten years I think the asking price of a 2 bedroom unit will look relatively cheap in 2021.

I'm looking for a long term investment in a good area. My thinking is that in the future I could utilise this type of asset if I move out of Sydney or have children that are working or studying in Sydney, so a well placed quality asset could become multifaceted.

I read in other posts you have a unit in Pymble, is this working well for yourself? Also is it new, 2 or 3 br etc

Cheers

I picked my Pymble property up for a good price as the new ones were taking all the attention of the prospective buyers :D I have done some basic renovations on it and I am happy with it but I am looking to hold it as its a decent rental. Its 2 bedroom/ 2 bathroom with parking and an easy walk to the station and shops. I have applied the same thoughts as above to this purchase but I can see the risk too if the market is flooded or they build so many units the area becomes less desirable but I dont think it will be the case.
 
What is the methodology of buying an older unit? Is it the lower buy in price and potential CG? Also is the lack of lift and other unit facilities a positive for lower strata costs?

Lower buy in price
Ability to add value with a renovation
Potential CG that you don't get in the first few years on the purchase of brand new
Established BC and strata managing agent - all bedded down with 5 - 10 yr plans
Building issues long since addressed (if there were any during the warranty period)
Lower number of units compared with new - so higher land component per unit
Lower strata fees - typically $550-600 per quarter. (I saw a new one yesterday with a strata of $1,400 per qtr :eek: which is what lifts, gyms and pools can do to you)
I could go on....;)
 
Agree with you 100% there. And even the bright new shiny ones in Hornsby > Gordon should do well in that kind of timeframe IMO (and as Red Car says).

I do it for a living :) - but lots of purchases over the last 12 months especially.

Definitely older blocks of 9, 12 or 20 mostly. No lifts. Generally built in the 1960's & 70's. Some in the 1930's - Art deco types. Although I just purchased an 8 yr old, 2 storey townhouse there this morning.

Mostly 2 brms. 3brm are harder to find and also attract a premium (but also more in rent too).

I picked my Pymble property up for a good price as the new ones were taking all the attention of the prospective buyers :D I have done some basic renovations on it and I am happy with it but I am looking to hold it as its a decent rental. Its 2 bedroom/ 2 bathroom with parking and an easy walk to the station and shops. I have applied the same thoughts as above to this purchase but I can see the risk too if the market is flooded or they build so many units the area becomes less desirable but I dont think it will be the case.

Some very good points.. thanks for the feedback, will keep looking and see what eventuates.

Cheers
 
Lower buy in price
Ability to add value with a renovation
Potential CG that you don't get in the first few years on the purchase of brand new
Established BC and strata managing agent - all bedded down with 5 - 10 yr plans
Building issues long since addressed (if there were any during the warranty period)
Lower number of units compared with new - so higher land component per unit
Lower strata fees - typically $550-600 per quarter. (I saw a new one yesterday with a strata of $1,400 per qtr :eek: which is what lifts, gyms and pools can do to you)
I could go on....;)

Good points, thanks for the feed back, much appreciated.

Cheers
 
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