South Penrith, have I missed the boat?

Hi All,

I'm relatively new to investing or rather relatively new at 'properly planned investing'. I'm wanting to buy a property which will have good capital growth over the next decade so I can use the equity to buy more properties. I only just started monitoring South Penrith and properties are going really quickly and seem to be going for good prices, so have I missed the boat? It would appear so as a bit more digging suggests it's been going hot for a while too.

Since this forum is gifted with many experienced and knowledgeable investors, my question to them is would you invest in South Penrith with a budget of $450-$500K? Since it's already 'hot', would it be still wise to invest there? My impulse says don't buy now and wait for the RBA interest rate hikes (hoping there'll be correction of property prices), but I'm scared that there won't be much correction and property prices will go up even further. And I dread of a day in future, few years from now where I think, "I could've bought that house for $500K back then but didn't!". A few years ago a friend of mine told me to invest in Mount Druitt and I didn't listen to him. I was too busy paying off my then PPOR which is now an IP and I'm screwed with a chunk of non tax deductible portion! But I want to start investing now and I guess better late than never :)

Thank you for all your input.
 
I think you missed the boat with most/all of Sydney for now.

Ditto .

We missed the boat in Sydney last cycle , but realised that Brisbane was starting to move . Many frumites have been buying there was in the last year or so.

We bought last year . It's moved a bit since then , but I haven't been watching the market closely as we bought for a long term frame.

I may be wrong , but I wouldn't be surprised if people will be able to pick up places out west for similar prices to now, in the next slump whenever that comes . That's what I'll be tell my kids .

Cliff
 
"The best time to buy is 20 years ago. The second best time is now."

There are still places in Australia where it's worth buying!
 
I can still see good buys in Sydney but you need to be on the ball and ready to jump when the opportunity arises. Some people religiously spend weekends attending auctions just to snap up a bargain.

I had one client on the weekend go to an auction expecting 20 plus people and only one other person showed up and he picked up the property for a really good price. Apparently there were 2 other auctions at the same time and it seems that met attended the other 2 auctions.
 
Penrith LGA has seen a huge increase and is reaching its peak... still a little to go though, but dont expect the past 18 months growth to continue indefinitely.

I had an IP nearby appraised in May for 400k and again last week at 440k so the past 6 months in particular have been a sprint.
 
Hi Shahin, when you say you can still see good buys in Sydney, do you mean western Sydney or Sydney Metro + Suburban overall? Last year we were looking for a PPOR in Hornsby and my goodness the competition was crazy! Properties went 10-20% above the asking price. We just couldn't compete with such ridiculous offers :mad:

Good on you DaveM! I've been spending my nights reading up things on this forum and it's amazing the amount of knowledge I've been able to gather just in days! I know I'm late to investing but I still think it's better than never. I want to buy for the long term or even buy and never sell. So as a new investor I need equity.
 
Just another thought, thinking out loud here.

If knowledgeable investors suggest that Western Sydney has been blown long time ago and the prices are at their peak, why are the properties selling so quick? I read reports that first home owners in the current market have a very small share of purchases so most purchases would be done by investors then. So, for example, the investors currently buying in Western Sydney, do they have a different strategy which is why they are buying there even when there are not many bargains and most properties are going to auction and sell at record or near record prices?

I might be overlooking something quite basic here and my question might sound foolish, but as a beginner I've got to ask questions to learn :p

Thanks
 
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The western sydney market aka the Penrith area has grown a large amount during this cycle. So much so it is more expensive then the south-west market. I recently purchased in leppington in the new estate by stocklands and got in on the second release and seen quite a healthy increase in the price I paid and what people are paying now.

I saw a house in kearns in the south-west region campbelltown lga for 345k was in good nick I thought that was bargain. Their are some good deals out their in sydney as people said you just have to be quick to pounce on them once you do see them
 
Ditto .


I may be wrong , but I wouldn't be surprised if people will be able to pick up places out west for similar prices to now, in the next slump whenever that comes . That's what I'll be tell my kids .

Cliff


I really hope youre right. need to find a PPOR and not sure if i should jump in now or wait :(
 
If knowledgeable investors suggest that Western Sydney has been blown long time ago and the prices are at their peak, why are the properties selling so quick? I read reports that first home owners in the current market have a very small share of purchases so most purchases would be done by investors then. So, for example, the investors currently buying in Western Sydney, do they have a different strategy which is why they are buying there even when there are not many bargains and most properties are going to auction and sell at record or near record prices?

There is a significant price drive from second home buyers and the mid market is doing very well.

Much of the transition is from second home buyers upgrading while interest rates are low, which is freeing up lots of more entry level homes which are being bought by late to market investors who are buying "before they miss out".

Trouble is this has caused a surge in rental stock and a reduction in yield, driving down returns. Self fulfilling prophecy, buy into a market due to the strong yields and in doing so, drive down yields.

I have cashed out one IP in western sydney to fund purchases in other markets which are yet to rise.... half my portfolio is western sydney if that gives you an idea of where I think the market is at and what the future holds from a CG point of view...

On a side note, the IP was bought by another investor via a BA... they will be getting 5% return based on purchase, I was getting 9%.
 
Thanks DaveM, that makes sense. So while they say the first home buyer numbers are low, they obviously don't consider the upgraders (second home buyers) who are still buying a PPOR. I don't know why but for some reason I kept thinking of people buying PPOR as first home buyers, silly me :D

One more question. When you say "half my portfolio is western sydney if that gives you an idea of where I think the market is at and what the future holds from a CG point of view", does that mean you have already benefited greatly by investing in Western Sydney or do you mean that you still see a lot of growth happening in the next decade or so and thus you are still holding on to those western sydney properties? I read your post again a few times and feel that you might actually mean both. Already benefited a lot but still a long way to go (perhaps).

I am thinking along the lines of "Get in before I miss out". But my gut says wait until the next slump comes (as Cliff mentioned).
 
I'm in the same boat as you, I want to stay close to home, (sydney) and the cheapest places seems to be western sydney,

The market is red hot right now, so many people at opens, properties on the market for a handful of days before being under offer.

it's definatley harder to find a good deal. but of course you can find a good deal in a any market if you know what you're looking for.

This will be my first IP, and I want to get in before I miss out. But even if there is a correction, are we really going to see negative growth? alot of commentators are saying that over a longer period (last decade) western sydney prices havent even caught up with CPI and are playing catch up.

Surley interest rates will have some impact on capital values of wastern sydney?
 
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