Sydney CBD vs Lower North Shore

[Azzy]

My sister and i want to buy an apartment - its our first property, and we are just starting with our research

we are thinking either CBD or Lower North Shore.: Looking for good capital growth, and high yield too.

We will live in it for a while then maybe later rent it out.

1.Would the Lower North shore be better for capital gains than the CBD? and is that because of too many units in the city?

2.What suburbs would be considered more desirable on the lower north shore? Eg Neutral Bay better than Crows nest?

3.If someone can attach a link (s) as to what be an example of a sought after property in either Sydney CBD or Lower North shore that would be much appreciated.

4.We were hoping to buy to be able to get the first home owners grant but we can spend up to $640,000 if required.

5.We were also considering getting a buyers agent if we found the whole research too much. Has anyone used a BA?

 

[Rolf Latham]

My sister and i want to buy an apartment - its our first property, and we are just starting with our research

we are thinking either CBD or Lower North Shore.: Looking for good capital growth, and high yield too.

We will live in it for a while then maybe later rent it out.

1.Would the Lower North shore be better for capital gains than the CBD? and is that because of too many units in the city?

2.What suburbs would be considered more desirable on the lower north shore? Eg Neutral Bay better than Crows nest?

3.If someone can attach a link (s) as to what be an example of a sought after property in either Sydney CBD or Lower North shore that would be much appreciated.

4.We were hoping to buy to be able to get the first home owners grant but we can spend up to $640,000 if required.

5.We were also considering getting a buyers agent if we found the whole research too much. Has anyone used a BA?

Hi Azzy

Welcome

My first comment would be , dont buy property with family unless u must, and cant do it by yourself. The reasons are varied, but 2 obvious ones are

1. FHOG eligibility, you only get one!

2.Joint and several liability. Its likely you havent considered the future issues associated with this purchase. Suggest to cool heels and have a look what this means for each of you in the future.

ta
rolf

 

[Azzy]

thanks rolf. Yes you are right... Not gonna buy together now. With some help from my parents I can still manage to buy a two bed. This is what is great about this forum ... the best advice.

Also if anyone can answer my other questions ... Will be appreciated

 

[Azzy]

Anyone with advice/ feedback pls I would like your response.

 

[Aaron_C]

Why don't you go have a look at some inspections and work it out. Nothing beats actually meeting agents and walking through properties.

 

[Scott No Mates]

The CBD & LNS are two totally different markets.

I would probably steer clear of the south end of the city although it is cheaper & tackier in many cases.

As for the LNS, look for something with good transport either the train (Waverton, Wollstonecraft, St Leonards or fringes of each), ease to buses or ferry. None of these areas are cheap (by Western suburbs standards) but for proximity to the city, you can't go too far wrong.

 

[Azzy]

The CBD & LNS are two totally different markets.

Is the CBD better now for capital gain people working in the city would prefer to stay there wouldnt they?

But from your post it appears that you are leaning more toward LNS?

 

[Propertunity]

If you look at the CG of Sydney CBD units Vs those say in Greenwich, Woolstonecraft and surrounds you will see that there is not much difference over a 10 year period.

One of the issues you'll face is the strata levies on the high rise units which can be way in excess of $1,000 per qtr. See if you can get into a 3 storey walk-up on the LNS, without lifts, pools, gyms and spas which all add to the strata costs.

 

[DaveM]

CBD probably has better yields, but lots will be high rise and as Propertunity says, yield will be eroded by levies.

LNS is a better lifestyle location and there are lots of 60s/70s 3 storey brick places that are very well built and will easily rent, with much lower strata.

If you are going to look at city, go to fringe areas around the eastern suburbs where there are smaller blocks with more personality.

 

[Azzy]

CBD probably has better yields, but lots will be high rise and as Propertunity says, yield will be eroded by levies.

LNS is a better lifestyle location and there are lots of 60s/70s 3 storey brick places that are very well built and will easily rent, with much lower strata.

.

Quite right yield will be eroded by levies. I have been looking at LNS and find that for 2 bed place the levies are like 700-870 per quarter.

The city doesnt seem much diff except for the buildings with lifts and pools etc. correct me if I am wrong

 

[Aaron_C]

It is wrong to assume that just because there is no lift/pool/gym that the strata fees will be lower. It all depends on how many apartments there are in the complex, since the body corporate fees are apportioned by each lot. A small complex with only 8 units may have low body corporate fees overall but due to the low denominator it becomes quite pricey per lot owner. There is a magical number where the minimum strata levies are found, and this is most likely to include lifts and be high-rise apartments. But always check the fees beforehand.

 

[Rolf Latham]

It is wrong to assume that just because there is no lift/pool/gym that the strata fees will be lower. It all depends on how many apartments there are in the complex, since the body corporate fees are apportioned by each lot. A small complex with only 8 units may have low body corporate fees overall but due to the low denominator it becomes quite pricey per lot owner. There is a magical number where the minimum strata levies are found, and this is most likely to include lifts and be high-rise apartments. But always check the fees beforehand.

Maybe you Mexicans do things differently

In Sydney and on the GC, We have usually ( but not always) found that the ugly old red or blonde brick 6 to 12 pack is the sweet spot.

Where it does get ugly is when there is something major wrong and you need to say window replacements or concrete work etc. Thats where the special levies can be big on small unit numbers.

ta
rolf

 

[johnkerr]

I'm a little curious about this topic, it comes up a lot. Is there any point at which it is worthwhile to pay strata for extra facilities.

At the higher end of the market or in certain rental markets does the extra rent you can charge make up for the strata fees?

Basically is it almost always a no-go or can it sometimes be pretty viable?

 

[Aaron_C]

I'm a little curious about this topic, it comes up a lot. Is there any point at which it is worthwhile to pay strata for extra facilities.

At the higher end of the market or in certain rental markets does the extra rent you can charge make up for the strata fees?

Basically is it almost always a no-go or can it sometimes be pretty viable?

It depends on how reasonable it is. For example, in my complex the strata fees are about $1,000 per quarter but you can rent an apartment for at least $600 pw. In a neighbouring complex, the strata fees are $1,500 per quarter but you can only rent out the apartment for $440 pw. It all depends.

 

[johnkerr]

Yeah I always thought there would have to be situations where it could be viable, just have to look at it case by case. Thanks Aaron

 

[smy7484]

Welcome here Azzy.
In regards to Strata Levy, $700 to $870/qtr. is pretty common. From experiences, I would go for low maintainance building (2/3 storey walk-up, facebrick, minimum facilities etc.).
High rise building in the city with lifts, gym & pool etc. might cost you less than $1000/qtr when the age of the building is less than 10 or 15 years, but down the track it's no surprise to have strata levy more than $1000/qtr when all the warranties period expired.
My advise to you is check the strata report, make sure a reasonable size of sinking fund in there and no proposed special levies for upcoming works.

Back to your question of CG, personally I dont see good capital growth in CBD, may be high yield. Considering the already expensive property price, not many people who can afford to buy there. your budget of $600k for 2 bedder will also limit your choice of properties to buy in CBD areas.

Sorry mate, I am not trying to pull you off. However I am just thinking many other areas will outperform Sydney CBD in the long run. BA might be a good idea for you to start off with.
Anyway, it's just my 2 cents worth of thought! good luck.

 

[Lindsey Naegle]

If you're contemplating Sydney CBD, I have 3 words for you. AVOID ANYTHING MERITON! You'll do better swimming in shark infested waters (..and with fewer sharks!).

 

[atsim]

It is wrong to assume that just because there is no lift/pool/gym that the strata fees will be lower. It all depends on how many apartments there are in the complex, since the body corporate fees are apportioned by each lot. A small complex with only 8 units may have low body corporate fees overall but due to the low denominator it becomes quite pricey per lot owner. There is a magical number where the minimum strata levies are found, and this is most likely to include lifts and be high-rise apartments. But always check the fees beforehand.

Just to back this claim, Iam paying $609 pq on a investment property with a lift and mine is on level 9 of a 11 storey block. That includes gst also

 

[C-mac]

That is an excellent strata rate for a building with those facilities you mentioned; regardless of where the unit is located in Sydney!

I think LNS will have higher CG potential in the next ten years; whereas CBD will likely fair better for RR. So, I guess pick your flavour depending on what your preferences are, as an investor.

If the place is for an owner-occupied residence, and you have your heart set on one of these two locations; it'll come down to personal preference; but if it's to be an IP; can I ask how you came to compare the two? Or even further, to shortlist these two options?

If you're looking for a mix of great CG and RR, it is not as rare as people make it out to be; I'd just be looking at markets between 2-8km east, south, and west of the CBD. These all have great prospects and some real bargains are to be had in the current downswing market, in these areas; making some properties in these areas not only great for CG, but rental return also.

 

[atsim]

That is an excellent strata rate for a building with those facilities you mentioned; regardless of where the unit is located in Sydney!

I think LNS will have higher CG potential in the next ten years; whereas CBD will likely fair better for RR. So, I guess pick your flavour depending on what your preferences are, as an investor.

If the place is for an owner-occupied residence, and you have your heart set on one of these two locations; it'll come down to personal preference; but if it's to be an IP; can I ask how you came to compare the two? Or even further, to shortlist these two options?

If you're looking for a mix of great CG and RR, it is not as rare as people make it out to be; I'd just be looking at markets between 2-8km east, south, and west of the CBD. These all have great prospects and some real bargains are to be had in the current downswing market, in these areas; making some properties in these areas not only great for CG, but rental return also.

In fact, I committed an entire blog post to defining and then seeking bargains in this downswing environment, just a week or so ago; check it out here:

http://www.propertyspectator.blogspot.com.au/2012/03/spotting-bargain-in-cooler-market.html

Cheers,
Cameron McEvoy
Contributor - www.propertyobserver.com.au
Blog - www.propertyspectator.blogspot.com

the unit is adjacent to mascot train station (2 stops to cbd) has 2 bdr and 2side by side car parking