South West Sydney- yay or nay?

[ZOMG]

Currently stuck in analysis paralysis.

Read through couple of the South West Syd threads- mixed responses. General consensus on the forums seems to be that Sydney overall is near it's peak and to look in other cities. Seems like the NW and West have definitely taken off in the last 1-2 years so we're avoiding those areas.

Residex report from early last year identified a couple of SW Syd suburbs such as Narellan/Harrington Park to be good for CG. Government does have SW growth centre planned but doesn't seem to be too much info around that other than general numbers. Looking around the SW areas, the median for houses on 500-600m blocks of land are still in the affordable range for us (i.e. <$600k). Yield has gone down already (sitting around 4-5% gross) as I think the prices have gone up in the area.

Looking at sale histories in SW Sydney, looks like the average time it takes for a property to double has been around 10-12 years, compared to 7-10 years for areas like inner west, north shore etcetc. If the Sydney market doesn't move and we buy in SW, looks like we won't have any equity for a good decade which would be disappointing.

Despite my reservations about the Sydney market at it's current stage, my partner wants to buy in Syd because it's easier to manage as we live in Sydney, what if everyone is wrong about the Brisbane market etc. We currently have 1 property in Sydney and 1 in Brisbane.

As we have cash assets, I would prefer to buy post next GFC but no one knows when that's happening and whilst the money in offset is nice, feels like we could be doing more with it.

What's everyone thoughts on the South West?

 

[datto]

Zomg, predicting the future has not been my forte.

But I do have 2 IPs in the SW of this glorious city. When I check the prices it is ubundantly obvious that the rate of price increase has ssllooowwed. unless there is some sort of stimulus eg rate cut then CG may just inch along. My opinion only...refer to first sentence of this post lol.

 

[knightm]

What's everyone thoughts on the South West?

I don't have a crystal ball either but IMHO the best time to buy here is past. The ripple is moving further out/up/down.

 

[MitchNik]

have you considered wollongong and areas around penrith? i have been hearing and reading good things about the penrith area and its still quiet affordable.

I do feel the ripple effect is well and truely in motion in sydney, its just how far out from the CBD does it stop

 

[kamchatsky]

I had a look at Narellan/Harrington Park/Oran Park/Gregory Hills/Elderslie/Mount Annan in Jan last year. Yes I followed the Residex report and noticed these suburbs are high yield and potential for growth. When I drove there, the areas seems to be pretty nice. People seems to be friendly (at Narellan Town Centre at least).

However at the end I bought at Schofields at North West instead of SW Sydney because I noticed that there are not that many jobs to be created at SW Sydney. I drove around looking at commercial areas, and I don't notice that there are that much of them, mostly retail which is not big money earner.

Also they are not that close to train station (Campbelltown/Macarthur) as Narallen Road is a choke point. There is talk of having Narellan station as part of SWRL extension however it could be a long way away, and it is just a back of envelope concept for now. So it may never eventuate. Look at how many years it takes for NSW Govt to build the NWRL Rail link when it was first proposed in the 1980s.

There are a lot of houses being built around those areas (Spring Farm/Elderslie/Oran Park/Gregory Hills) so there should be a lot of supply coming which will then cap captial gain for a while.

If there are going to be a lot of jobs generated there, then demand in those area would go up and push up house prices. However I don't really see it right now. For the last 12 months, it is simply following Sydney general price rises but at a slower pace.

Having said that though, there are a lot of new houses for sale so if depreciation benefit is important to you then at least there are a lot to choose from.

 

[Redom]

I had a look at Narellan/Harrington Park/Oran Park/Gregory Hills/Elderslie/Mount Annan in Jan last year. Yes I followed the Residex report and noticed these suburbs are high yield and potential for growth. When I drove there, the areas seems to be pretty nice. People seems to be friendly (at Narellan Town Centre at least).

However at the end I bought at Schofields at North West instead of SW Sydney because I noticed that there are not that many jobs to be created at SW Sydney. I drove around looking at commercial areas, and I don't notice that there are that much of them, mostly retail which is not big money earner.

Also they are not that close to train station (Campbelltown/Macarthur) as Narallen Road is a choke point. There is talk of having Narellan station as part of SWRL extension however it could be a long way away, and it is just a back of envelope concept for now. So it may never eventuate. Look at how many years it takes for NSW Govt to build the NWRL Rail link when it was first proposed in the 1980s.

There are a lot of houses being built around those areas (Spring Farm/Elderslie/Oran Park/Gregory Hills) so there should be a lot of supply coming which will then cap captial gain for a while.

If there are going to be a lot of jobs generated there, then demand in those area would go up and push up house prices. However I don't really see it right now. For the last 12 months, it is simply following Sydney general price rises but at a slower pace.

Having said that though, there are a lot of new houses for sale so if depreciation benefit is important to you then at least there are a lot to choose from.

Sounds like a pretty good assessment - I thought the same about the jobs in SWS. The areas gone nuts over the past 18 months too - pretty strong growth. I think a lot of the infrastructure is priced it now - the supply should keep a lid on future growth. Its not uncommon to see a 25-30% gain in value in that time.

 

[ZOMG]

I had a look at Narellan/Harrington Park/Oran Park/Gregory Hills/Elderslie/Mount Annan in Jan last year. Yes I followed the Residex report and noticed these suburbs are high yield and potential for growth. When I drove there, the areas seems to be pretty nice. People seems to be friendly (at Narellan Town Centre at least).

However at the end I bought at Schofields at North West instead of SW Sydney because I noticed that there are not that many jobs to be created at SW Sydney. I drove around looking at commercial areas, and I don't notice that there are that much of them, mostly retail which is not big money earner.

Also they are not that close to train station (Campbelltown/Macarthur) as Narallen Road is a choke point. There is talk of having Narellan station as part of SWRL extension however it could be a long way away, and it is just a back of envelope concept for now. So it may never eventuate. Look at how many years it takes for NSW Govt to build the NWRL Rail link when it was first proposed in the 1980s.

There are a lot of houses being built around those areas (Spring Farm/Elderslie/Oran Park/Gregory Hills) so there should be a lot of supply coming which will then cap captial gain for a while.

If there are going to be a lot of jobs generated there, then demand in those area would go up and push up house prices. However I don't really see it right now. For the last 12 months, it is simply following Sydney general price rises but at a slower pace.

Having said that though, there are a lot of new houses for sale so if depreciation benefit is important to you then at least there are a lot to choose from.

Cheers for the input. I worked in the SW couple years ago and agree that job wise it's mostly retail or social/welfare services in the area. I drove to Narellan Vale and it seemed very quiet with all the shops being located around Mt Annan. Looks like I'd focus attention on some other areas for now.

 

[ej89]

South west has already moved a fair bit since January... People have realised Northwest and West are either too expensive or the same price as a new house in south west so they've moved towards southwest.. thats just my observation though as I've done the same thing when observing prices in Sydney.. Spring Farm probably the cheapest but smells like poo.. My mate just got his house and land package valued by the bank in Freemans ridge in Carnes Hill, and it was valued at 90k over what he paid 6 months ago.. Which I find to be nuts..

Land release is too slow in both NW and SW.. House and land packages went up like 60k after the interest rate got cut..

 

[windyzz]

I'm thinking about getting a 2 bed old unit in Liverpool or similar area soon. Price hasn't move much at all since 2012-2014. I believed another interest cut might give some further movement to the western area of Sydney.
+ rental yield is still pretty good

 

[WattleIdo]

Just had a quick look at Liverpool on realestate.com.au and it looks out of control. Prices have gone up a lot and there are auctions and sold in one week exclamations all over the place.

The 2 bedda next to mine (Harris Park) sold in a couple of days at an astronomical price. There's nowhere affordable that hasn't moved and isn't hot.

 

[datto]

Windy, you're gonna need 300K plus for an old unit in Liverpool. Prices are steadily rising out there from my observations.

 

[douglasparkcham]

I am born and bred in south west sydney in my opinion let it go through to the keeper when its run is complete it will lay dormant for 7 to 10 years

 

[windyzz]

Windy, you're gonna need 300K plus for an old unit in Liverpool. Prices are steadily rising out there from my observations.

Yes that's what I'm referring to 320-350k is not expensive for a 2bed apartment with rental yield of 4.8-5%.

I remembered It was around 250 -300 back in 2012-2013.

I don't know how much more it can grow , but Liverpool is becoming a central hub in south west with campbeltown.

It has schools, hospitals offices, Westfield, and major transportation ( train line and bus interchange)

 

[Weteggs]

Short answer - No.

That is if you're buying it as an investment because simply you need to look at the type of tenant that you will get. Ask yourself if you think they will look after your property and keep it in good condition and pay their rent. I know it's a generalisation, but I grew up in SWS and I know of people directly having IP's in SWS and it was a horror story of the tenants trashing the place and not paying rent.

So judging it purely as an investment vehicle, there is too much risk and little reward in terms of CG's.

 

[windyzz]

Darn... Now I'm scared ...

 

[skater]

That is if you're buying it as an investment because simply you need to look at the type of tenant that you will get.

So, according to you, all the tenants in SWS are bad?

I know it's a generalisation, but I grew up in SWS and I know of people directly having IP's in SWS and it was a horror story of the tenants trashing the place and not paying rent.

Ah, so you KNOW of someone who has IP's in SWS, and due to their experience, the whole area needs to be written off? You're not even basing this on your own experience.

Have you thought that:-
-Maybe your friend was self managing
-Maybe your friend appeared to be a soft touch, and didn't follow the tenancy laws
-Maybe your friend used a R/E, but they weren't particularly good
-Maybe your friend didn't have tenant insurance
-Maybe the house was not in a great condition, attracting that kind of tenant
-Maybe your friend was just plain unlucky
-Maybe your friend exaggerated, because it was a good story.

So judging it purely as an investment vehicle, there is too much risk and little reward in terms of CG's.

I've been investing in SWS since 1998 with multiple properties. In that time I've had only one tenant do a runner, no trashed properties, no evictions for non payment of rent.

My best tenant is, in fact in SWS. They were the first tenant that went into a property when we bought it. The Agent told us that the neighbour was asking them how much they paid for the place, as they were outside painting the eaves, and thought they were the new owners.

The tenant is a painter & has painted the place several times, and does all minor repairs himself. The agent only ever learns that there was something needing fixing when she does an inspection, and it's always immaculate.

If you call that risk, well, I'll take that any day.

The first property we bought for $90,500, and it's now worth in excess of $400k, so if you want to call that little reward, I'll take that too.

The fact is, that owning properties is like a Business. You have to treat it as such, or you could be quite easily at the mercy of those who want to take advantage.

You need to keep the property well maintained, hire a property manager, if you are not prepared to do what it takes to manage the property properly, and that does not mean just collecting rent. You need to MANAGE the property, and follow the letter of the law whenever things start to go south. You need to have the appropriate insurance cover, unless you've got deep enough pockets to self insure.

This applies whether the property is in the outer slums of a town, or is in Vaucluse.

You need to know that you get both good and bad tenants EVERYWHERE, and do your best to minimise the risks.

 

[Weteggs]

So, according to you, all the tenants in SWS are bad?



Ah, so you KNOW of someone who has IP's in SWS, and due to their experience, the whole area needs to be written off? You're not even basing this on your own experience.

Have you thought that:-
-Maybe your friend was self managing
-Maybe your friend appeared to be a soft touch, and didn't follow the tenancy laws
-Maybe your friend used a R/E, but they weren't particularly good
-Maybe your friend didn't have tenant insurance
-Maybe the house was not in a great condition, attracting that kind of tenant
-Maybe your friend was just plain unlucky
-Maybe your friend exaggerated, because it was a good story.




I've been investing in SWS since 1998 with multiple properties. In that time I've had only one tenant do a runner, no trashed properties, no evictions for non payment of rent.

My best tenant is, in fact in SWS. They were the first tenant that went into a property when we bought it. The Agent told us that the neighbour was asking them how much they paid for the place, as they were outside painting the eaves, and thought they were the new owners.

The tenant is a painter & has painted the place several times, and does all minor repairs himself. The agent only ever learns that there was something needing fixing when she does an inspection, and it's always immaculate.

If you call that risk, well, I'll take that any day.

The first property we bought for $90,500, and it's now worth in excess of $400k, so if you want to call that little reward, I'll take that too.

The fact is, that owning properties is like a Business. You have to treat it as such, or you could be quite easily at the mercy of those who want to take advantage.

You need to keep the property well maintained, hire a property manager, if you are not prepared to do what it takes to manage the property properly, and that does not mean just collecting rent. You need to MANAGE the property, and follow the letter of the law whenever things start to go south. You need to have the appropriate insurance cover, unless you've got deep enough pockets to self insure.

This applies whether the property is in the outer slums of a town, or is in Vaucluse.

You need to know that you get both good and bad tenants EVERYWHERE, and do your best to minimise the risks.

Sounds like you're taking this a bit personally.

I should have said to clarify to people like yourself who go off the deep end that at the current market prices of SWS that it is in my opinion extremely risky.

The OP is asking whether they should buy a property in SWS 'TODAY' and not when they were $90,500. So my question to you is would you buy a property in Liverpool TODAY when a house is 600k+ and a 2 bedder is 400k+ considering your great track record of wonderful tenants?

 

[Weteggs]

So, according to you, all the tenants in SWS are bad?

Ah, so you KNOW of someone who has IP's in SWS, and due to their experience, the whole area needs to be written off? You're not even basing this on your own experience.
.

Oh and for the record, growing up in SWS I sure knew a lot of good people, yet there were also crap load of bad people too and I had a crap load of bad experiences. It's not rainbows and tweety birds out there.

Did you happen to grow up there by any chance or are you basing your comments on your IP's?

Yes, there are bad people everywhere, but there is a higher element of crime and really bad things happening in SWS. Hence, I wouldn't be risking a 400k-600k investment there.

If you don't believe me then check: http://howsafeisyoursuburb.appspot.com/#view=view4SuburbTop10Bar

For me, I will only buy IP's where it's not coloured red: http://howsafeisyoursuburb.appspot.com/#view=view1Map

 

[sumterrence]

I'm currently renting in Liverpool with my gf at the moment (moving next week ) and I can tell you that:

- Every bloody night there is this bloody dog barking 1am in the morning for 10mins....

- Every 2nd week you'll get a hoon driving his slow ares vtec honda blasting each street around the block for 10mins.....

- Sometime on friday night when I finish my work drinks and catch a train home at 10pm you'll have these kids running up and down the train, kicking seats and splitting on the floor, i think they usually got off at cabra or something...

- Parking in the morning is really hard as there are simply not enough parking space, i usually drive to warwick farm as there is a massive car park but you only get lucky if you get there before 7:30....after that good luck

- And yesterday night my gf ask me if i heard a crazy man yelling at night and causing that phyco dog bark again...which i guess i was too drunk i can't hear anything lol...

- There is a time when i parked my car on the street a crazy woman kept asking me if i can give her a lift even when there were police behind me I point at the police ask the woman to ask them the favor instead lol....

 

[windyzz]

Umm... Ok I will no longer consider Liverpool anymore

It appeared that suburb with high rental yield are not that Desirable.