Six figure deposit and want to get into Sydney property market

Discussion in 'Where to Buy' started by robs132, 18th Jun, 2015.

  1. robs132

    robs132 Member

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    $150K deposit and want to purchase $700K Sydney IP

    Hey guys,

    Love this forum, so much knowledge... so hoping to get some insight into following question:

    I have a six figure deposit saved up to invest in property. Keen to get into the Sydney market, however it is kinda hectic out there! So should I....

    a) just bite the bullet and buy first investment property in Sydney market?
    b) Keep saving until 2018 and hope for massive market correct in Sydney?

    Hoping to get some guidance and advice from seasoned investors on this fine
    forum

    Cheers

    Rob
     
    Last edited: 18th Jun, 2015
  2. ej89

    ej89 Member

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    Depends what number your 6 figures start and end with...
     
  3. robs132

    robs132 Member

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    haha fair call! deposit I'm looking at is $150K and looking to purchase a property that is maximum $700K
     
  4. JDP1

    JDP1 Member

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    Do not suggest nor think option b will happen. Your deposit is high enough to get in the market. Obviously, you will get less realestate for your buck in Sydney as compared to other capital cities.
    If you must go for sydney in this market, then I'd suggest to go in and not wait for a future correction as noone knows when and how severe it may or may not be.
    However, make sure you have a clear plan and goals before you buy.. That is more important than timing the market.
     
  5. vtt

    vtt Member

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    A bird in the hand is worth two in the bush. Don't wait for a correction that may never happen. Buy smart and buy well .. good luck!

    vtt
    :D
     
  6. robs132

    robs132 Member

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    Thanks guys, what about using a buyers agent or investing in camptial cities outside of Sydney?

    Any guidance here?
     
  7. Rhinsor

    Rhinsor I'm Batman

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    Why Sydney, why not use that as 3-4 deposits else where?
     
  8. Richard Feynman

    Richard Feynman Mortgage Broker

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    I'd personally be looking interstate. In fact, I am looking interstate, Brisbane, with a very similar budget.
     
  9. BV

    BV Think outside the square

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    Rob

    If its only an investment I'd say b)
    However, the problem with b) is what are you going to do with your cash while you wait?

    If I were to go for a) I'd buy a cheaper property yielding around 4-5%,
    Perhaps a unit or a t/ house on the SW suburbs (where the growth hasn't been excessive) and put all my cash in there so at least the return on my deposit is 5%.

    I hope this helps.
     
  10. Mick C

    Mick C Mortgage Broker

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    DO IT!! Buy when you can afford it ( No such thing as good timing)...EVERYONE goes through this stage... you simply bite the bullet.

    Today you pay $30,000 over... tomorrow your $30,000 ahead.


    "Market correct" what does this even mean??? You expect prices to go BELOW today's value?? i dont think so...

    Yes 2017-2018 market will slow down...but the price you pay now will be higher in 2018..so why wait till 2018 to buy the same stock at a higher price?
     
  11. Pixie

    Pixie Member

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    agree with Mick c..

    Also I would probably use your deposit on multiple properties rather one HUGE deposit for only one property...
     
  12. BV

    BV Think outside the square

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    Mick

    How do you know that prices won't fall?

    I can think of a few potential causes.
    At present APRA wants banks to limit investor loans and to not discount them.
    At the same time the government could come up and ask us to defer -ve gearing losses for when we sell the IP.
    Underemployment: Unemployment could be higher and good paying jobs are being replaced with more part time jobs.
    Interest rates could be higher than today.

    Also, if you are counting on infrastructure boosting prices, IMO the NW Rail link and the new Airport have already priced in.
     
  13. BV

    BV Think outside the square

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    I'd agree if it was part of your investment strategy.
    and if you were at the end of a bust cycle and not at the end of a boom cycle.

    Holding multiple properties at the end of a boom cycle is only going to give you pain and suffering for no short term benefit.

    IMHO
     
  14. TMNT

    TMNT Member

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    Whats a boom/bust cycle?
     
  15. BV

    BV Think outside the square

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    DEFINITION of 'Boom And Bust Cycle'

    A process of economic expansion and contraction that occurs repeatedly. The boom and bust cycle is a key characteristic of today’s capitalist economies. During the boom the economy grows, jobs are plentiful and the market brings high returns to investors. In the subsequent bust the economy shrinks, people lose their jobs and investors lose money. Boom-bust cycles last for varying lengths of time; they also vary in severity.


    We've just had a big property boom.
    I hope this helps
     
  16. Azazel

    Azazel Member

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    Definitely interstate, plenty of places that are on the way up, not at the crazy top.
     
  17. Logica

    Logica Buyers Agent

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    Hey Rob

    Working in the trenches of Sydney (and Adelaide) markets, I don't see any clear signs of the "oil tanker" slowing down or starting to turn. Whilst I agree with other contributors that this cannot go on for ever, it may be a while for the price growth to grind to a stand still here...

    Therefore, I would agree with Mick C, assuming your strategy is buy-and-hold. However, if you fancy for example development, then other cities may provide better opportunities. For example in Adelaide you could buy a property suitable for a future 1 into 3 development in good suburbs, near the coast and 8-10km from CBD.
     
  18. JohnHenry

    JohnHenry Mister

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    Welcome to the greatest Investor forum Rob,

    as pere this news: http://news.domain.com.au/domain/re...ers-will-be-disappointed-20150623-ghv7x2.html

    You'll see that buying a house and land package in Northwest Sydney will surely a winner:

    From the website above, somewhere in the right hand frame, you'll see that Schofields is the blue chip suburbs that was once a neglected area.

    Now it is the top number 1 Fastest Growing Suburbs in Sydney.

    Code:
    RANK SUBURB	MEDIAN PRICE * AND TREND
    1	Schofields	$780,000	+43%
    2	Sylvania Waters	$1,600,000	+37%
    3	North Ryde	$1,260,000	+34%
    4	Ryde	$1,250,000	+33%
    5	Burwood	$1,691,000	+30%
    I predict the next area will be Riverstone , Ropes Crossings and Marsden Park in the Northwest, this is simply because of the ripple effect of the neighbouring suburbs like The Ponds, Kellyville, Baulkham Hills, etc... they are all multi million $ suburbs.

    In the Southwest, there is also area which can grow to be like that such as:
    Glenfields, Edmondson Park, Airds, Oran Park and you can also buy existing property (house) to be redevelopped in Ingleburn and Campbelltown.

    If I were you, I'll be buying one in each region (one in Northwest and one in Southwest) to diversify the risk and profits.

    I've been long enough in this forum and that's what I can see from the fields over the past 2 months going around to each area display house.

    Happy Hunting.
     
  19. BV

    BV Think outside the square

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    The infrastructure spending has already been priced in (property prices increased for this reason).
    Schofields is in a flood zone, when we have heavy rains you will be looking to find your underwater house. There are some high streets but I think they've already been sold out.


    IMO not in the short term, people will be stuck with a high mortgage in a Price declining or Price stagnating environment.
     
    Last edited: 23rd Jun, 2015
    JohnHenry likes this.
  20. see_change

    see_change Apprentice Timing Lord

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    JH

    you really have no idea what you are doing .

    so some where has jumped 43 % and now you want someone to buy there .

    Seriously

    WTF !!

    Cliff