Sydney Silliness Warnings 2015

[oc1]

Be very afraid ...if you are buying in Sydney.....particularly anything in the over heated markets in Inner West, Epping/Eastwood, Hills District, Blacktown/Mt Druitt.

The party will stop at some point there in a big way.....

Well said. Maybe your post might just save a person or two from heartache.

 

[oc1]

oh and if I had a $ for every argument I had read about population growth and structural demand holding up prices! irrational markets can flush out all such sensibilities

Yep, human nature at it's finest hey?

 

[sash]

Like lambs to the slaughter.... greed is an interesting....human trait. All sensibilities are lost.

Us old men know what happens when the caboose comes off the rails....lessons from 1989-1991 in Sydney and Perth. Sydney from 2004-2006....lost of mortgagee in possession sales.

Before...anyone says I am troll...I am fan of property I have over 20 IPs including 8 in NSW.....just want to balance the irrational exhuberance!

Well said. Maybe your post might just save a person or two from heartache.

 

[see_change]

Well said. Maybe your post might just save a person or two from heartache.

Probably not . The sensible people are already watching from the sidelines while those buying won't be listening

We've sold one property in Sydney , because it was part of a downsizing process where we changed our long term PPOR for a downsizer and our weekender .

It's cleared a lot of debt ( the weekender ) and will enable us to buy more IP's

Outside that. I'm happy to keep our Sydney ip's as they were all bought as long term investments .

Cliff

 

[oc1]

Like lambs to the slaughter.... greed is an interesting....human trait. All sensibilities are lost.

Us old men know what happens when the caboose comes off the rails....lessons from 1989-1991 in Sydney and Perth. Sydney from 2004-2006....lost of mortgagee in possession sales.

Before...anyone says I am troll...I am fan of property I have over 20 IPs including 8 in NSW.....just want to balance the irrational exhuberance!

You always talk sense Sash. You should post more often.

 

[oc1]

Probably not . The sensible people are already watching from the sidelines while those buying won't be listening
Cliff

They are listening, just listening to what they want to hear only.

 

[sash]

Correct....spot on....I tried to steer some people at work from making mistakes....but got sneered at.

A few are buying 750k OTP stuff completing 2016-2017! Once claimed something in the Hills District bought for 950k brand new in the current market will be worth $1.6! What can I say..had to turn away so that I did not laught in their face.

I might get the just desserts and buy them out when the bank does not value at 950k!

They are listening, just listening to what they want to hear only.

 

[see_change]

Well done skater. White hot is a good term and I'm glad you are in on the action.

Yeah - I find it hard to guage from west of the sandstone curtain but from all the feelings I'm getting is that East Sydney really has not performed as well as the west and I'm wondering that if the catch up factor comes into play then Sydney east is in for some big gains. Someone mentioned above that below 700k is doing well and up to 1.5 m is a bit slower. Maybe this is some of the reason.

Serious reply

Actually the east moved well before the west as it did in the previous cycle . My niece bought a unit in Coogee several years ago and was sitting on a nice capital gain before the west started moving . The west moved later but was playing catch up and moved faster and because there are a lot of forumites with westie properties it's been talked about more . ( spell check changes westie to wedgie .... )

Another factor is that the bottom market in Sydney has moved stronger than the upper part , so I wouldn't be surprised if your eastern suburb one bedders have moved a significant amount of the amount they're going to move this cycle .

They won't come close to covering their holding prices , so with the buying and selling costs you may find that a one bedder in the eastern suburbs at this stage could be one of the worst potential investments around , but then I could be wrong ... Time will tell . I know it's not for me .

The market that hasn't moved in Sydney that much is the 2.5 mill plus , which in many places would still be below previous highs . I've seen some adds for nice waterfronts on Pittwater whic I know were selling for more a few years ago .

But again the holding cost can be a bit much .

Cliff

 

[see_change]

Correct....spot on....I tried to steer some people at work from making mistakes....but got sneered at.

A few are buying 750k OTP stuff completing 2016-2017! Once claimed something in the Hills District bought for 950k brand new in the current market will be worth $1.6! What can I say..had to turn away so that I did not laught in their face.

I might get the just desserts and buy them out when the bank does not value at 950k!

I have a friend who sets up development syndicates for sophisticated investors and he's been struggling to find places that make sense in Sydney . He did his dd on a couple of sites in the hills and could see the justification for the asking prices . Felt it was too risky a proposition to take to his investors .

Cliff

 

[ZachAnSel]

(Apologies if you've mentioned elsewhere) but are you considering selling because you are concerned of a noteworthy correction, or because you want to free up capital to reinvest elsewhere for what you expect to be a greater return, to simply reduce debt, to fund a retirement or something else?

Hi Richard,

We have few reason, plan to leverage into another asset class. As well as debt reducing strategy and improve cashflow. Personally I also think Sydney near/at peak..

 

[baby blue eyes]

We sold our PPOR in the hills district, timing was good to sell our McMansion of 15.5 years and downsize to the Northern Beaches. I believed the price we achieved was influenced by three factors: the train line being priced in, the shortage of new land releases, and the m2 widening finally being completed. These factors made a big difference in prices achieved in the Hills district from a couple of years ago.

I thought the Hills district lagged in price because of transport and accessibility issues. I also believe this was a one off correction in price to its real value now transport issues are finally being addressed. The market will slow down, and the market made our decision to sell easier.

Buying the new PPOR well that's a different story, we have a bit of renovating to do, still awaiting settlement. It was a hot market with that purchase too. Time will tell if it was a good buy.

Sydney has so many different markets, inner west and eastern suburbs lower priced stock always seems tightly contested.

Investment wise I have not bought in Western Sydney since 2012, I have revalued those properties and bought in other markets.

 

[kamchatsky]

Be very afraid ...if you are buying in Sydney.....particularly anything in the over heated markets in Inner West, Epping/Eastwood, Hills District, Blacktown/Mt Druitt.

The party will stop at some point there in a big way.....

All depends.

Epping/Eastwood is strongly influenced by Asian investors who seems to have bottomless amount of money and are not really influenced by interest rates (they paid all in ca$h remember, no negative gearing/holding costs required). It would probably hold value the most.

Inner West, it seems to have high demand all the time but units/apartment is major concern given tons of them being built. House/terrace should be OK unless they paid emotional prices in auction.

Hills District is interesting one. NWRL is coming at 2019 so that should hold the price a bit, especially all those suburbs are newish and have feel good factor. But then again, some land at Kellyville closer to train line is selling like 800K for 700sqm, and new OTP 2br apartments at Kellyville far away from NWRL line, are selling at mid to high 500s. I think that is crazy.

Blacktown/Mount Druitt I dunno too much but unless there is massive number of new people moving in there, I don't think gentification will be quick enough to improve the image of those suburbs.

I think at the end, houses will hold value the most. I cannot wait to buy older apartments at cheaper prices when all those OTP gets completed in year 2017-2019.

 

[sash]

Agree about Asian investors paid in cashin Epping/Eastwood. Most of them are are mainlanders. They have simply sold properties in China and have borrowed some money to buy here as they don't trust the Central govt and their corrupt cronies.

Inner West is rivalling Eastern suburb prices...this will slow things down price wise.

The Hills is going to be the disaster...lots of work colleagues live there....will come to grief. The price rise there (35-40 klms) is crazy.

As job losses occur Blacktown and Mt Druie will take a beating...

All depends.

Epping/Eastwood is strongly influenced by Asian investors who seems to have bottomless amount of money and are not really influenced by interest rates (they paid all in ca$h remember, no negative gearing/holding costs required). It would probably hold value the most.

Inner West, it seems to have high demand all the time but units/apartment is major concern given tons of them being built. House/terrace should be OK unless they paid emotional prices in auction.

Hills District is interesting one. NWRL is coming at 2019 so that should hold the price a bit, especially all those suburbs are newish and have feel good factor. But then again, some land at Kellyville closer to train line is selling like 800K for 700sqm, and new OTP 2br apartments at Kellyville far away from NWRL line, are selling at mid to high 500s. I think that is crazy.

Blacktown/Mount Druitt I dunno too much but unless there is massive number of new people moving in there, I don't think gentification will be quick enough to improve the image of those suburbs.

I think at the end, houses will hold value the most. I cannot wait to buy older apartments at cheaper prices when all those OTP gets completed in year 2017-2019.

 

[bumblegoodie]

any body know why asians are buying in Eastwood in particular?

i saw a shabby old house wanting to sell for over $2 million.

Isnt that insane?

Eastwood is no where near the water , no major shopping centre like westfield or a major interconnecting train station.

So what so good about Eastwood? and why the ridiculous prices?

 

[Michael_X]

any body know why asians are buying in Eastwood in particular?

i saw a shabby old house wanting to sell for over $2 million.

Isnt that insane?

Eastwood is no where near the water , no major shopping centre like westfield or a major interconnecting train station.

So what so good about Eastwood? and why the ridiculous prices?

I grew up in Eastwood and saw the change with my own eyes. When my parents first moved there, Eastwood only had one tiny Asian grocery store and very few Asians. I remember my Year 1 class only had two Asian students, this was back in 1991.

One of the key drivers was the Eastwood Public School. It was considered to be one of the best in the area and had a very good OC (Opportunity Class) that selected the top students in the Ryde district and formed a class every year.

Eastwood is also close to good High Schools like James Ruse (top in the state), Baulkham Hills, Epping Boys and Cheltenham Girls.

Over time the Asian community grew. Each time a store closed it would be replaced with an Asian store. The local McDonald's became a Chinese Vegetarian Restaurant! Now on one side of he train line its predominantly Chinese and the other Korean.

Lots of good places to eat If we eat out it's almost always in Eastwood.

 

[nolive]

Agree about Asian investors paid in cashin Epping/Eastwood. Most of them are are mainlanders. They have simply sold properties in China and have borrowed some money to buy here as they don't trust the Central govt and their corrupt cronies.

Inner West is rivalling Eastern suburb prices...this will slow things down price wise.

The Hills is going to be the disaster...lots of work colleagues live there....will come to grief. The price rise there (35-40 klms) is crazy.

As job losses occur Blacktown and Mt Druie will take a beating...

RE: Eastwood and the Hills district.

Chinese that buy in Eastwood are predominantly FOBs just like those who are buying up in the Hurstville area. Reasons driving them to buy are two.
1) they have elderly parents who are about to come to Australia to retire and speaks 0 English or
2) they have younger children and need to match their purchase decision to access good public primary schools just as they would have back in China.

The bunch that are buying up the hills district are Chinese who have been here for some time, say 5 - 15 years. They really would like to buy into the North Shore but are priced out. Thus, the Hills is the next best bet other that sorta looks like NS but with a discounted price tag. And at the same time their children are slightly older, so the proximity to good high schools and to Eastwood and Epping are particularly desirable.

 

[nolive]

Agree about Asian investors paid in cashin Epping/Eastwood. Most of them are are mainlanders. They have simply sold properties in China and have borrowed some money to buy here as they don't trust the Central govt and their corrupt cronies.

Inner West is rivalling Eastern suburb prices...this will slow things down price wise.

The Hills is going to be the disaster...lots of work colleagues live there....will come to grief. The price rise there (35-40 klms) is crazy.

As job losses occur Blacktown and Mt Druie will take a beating...

I think you might have really missed the mark on why the Chinese are buying here. For one, the property prices in China, especially 'first line cities' (think Beijing, Shanghai, Guangzhou' are very high. Any random apartment remotely close to the city will fetch $5mil RMB. Many people actually choose to continue their hold onto these with very few selling off to go overseas (I actually know a couple of people who sold up their Australian properties to buy back into the China market earmarked for 20-30% YoY increase). It is more than likely that they would have their parents still in China and there is always an ounce of probability that they might return at some stage. This is also the same reason why some are not willing to hand in their PR for citizenship. Believe it or not, the majority of people give very little rats *** about the government, more so for people coming from regions below SH and inclusive.

The real reasons of why they like countries like Australia is because:

1. Average person's quality of life - Earning vs property prices. Effort vs reward. Australia , undoubtedly has a much better living style for the average worker.
2. Good education system. In China, there is so much pressure exerted over the younger generation. Kids go to school from 7:30 - 20:00 in some cases. There is much emotional turmoil to get your kid to complete the HSC equivalent on both the kid and parents. And should your kid graduate university then he/she has to compete with thousands for the same job. IF you don't have connections then the pleb workout heads to nowhere much.
3. Clean air. Don't think I need to say much on this...
4. Safe food. Ditto. But I have to say the farm produce tastes a lot better in China, albeit it might be fake. Haha.
5. Retirement? This one is really for the parents who are coming over to take care of their grandkids. But the debate is still out on whether the lifestyle is better here or in China for Australia proves to be too boring for the elderly with 0 friends and 0 English level.

 

[wombat777]

As for Hills ( Rouse Hill / Kellyville ), I've been watching the DAs and the local rag for news of all the unit / townhouse developments going in.

There are some big ones around the perimeter of the Rouse Hill Town Centre and near the Kellyville station site that seem timed for completion 2018/19. Construction is just starting for some.

The big developers certainly seem to be in a rush to get the OTP units and townhouses on the market, whilst the market is hot. Development wise it was stagnant for years, although that was partly due to on-again, off-again rail link.

 

[kamchatsky]

RE: Eastwood and the Hills district.

Chinese that buy in Eastwood are predominantly FOBs just like those who are buying up in the Hurstville area. Reasons driving them to buy are two.
1) they have elderly parents who are about to come to Australia to retire and speaks 0 English or
2) they have younger children and need to match their purchase decision to access good public primary schools just as they would have back in China.

The bunch that are buying up the hills district are Chinese who have been here for some time, say 5 - 15 years. They really would like to buy into the North Shore but are priced out. Thus, the Hills is the next best bet other that sorta looks like NS but with a discounted price tag. And at the same time their children are slightly older, so the proximity to good high schools and to Eastwood and Epping are particularly desirable.

I would say the next upcoming Chinese suburb is Castle Hill.

In the past, Castle Mall next to Castle Towers have hardly had any people shopping there. Then 1 year ago the level 1 of Castle Mall begin to have Chinese groceries and fish shops and meat shops, and more Chinese starts to shop there. A few days ago a Chinese bread shop opens at Castle Mall as well (with the owner having same shop from Eastwood). I go there regularly for shopping and rely on Eastwood a lot less.

I can see sooner or later the whole Castle Mall will be all Asian shops/restaurants attracting more Asians living there. Make sense with all the mainstream shops at Castle Towers, and all the Asain shops at Castle Mall (both Castle Towers and Castle Mall are owned by QIC so no real competition there). Also with Castle Tower expansion, NWRL completion (connecting CH to Epping, Macquarie Park, Norwest, Chatswood), and all those new developments/apartments building there, more and more cashed up Chinese will live there.

And in many ways Cherrybrook will also be big beneficiary on this because of excellent Cherrybrook Tech High School (one of the best non-selective public high school in NSW), also on NWRL link and just between Epping and Castle Hill train station. Lots of Chinese and Indians already have been buying there for the school.


Another interesting observation is the new "The Ponds High School" at the Ponds. The ex-CTHS vice-principal moved to be the new principal of the Ponds High School, and they are trying to replicate what happened at CTHS to TPHS. It would be interesting to see how it pans out. If it turns out well, more Asians will move there as well. But it could take some years.

 

[kamchatsky]

any body know why asians are buying in Eastwood in particular?

i saw a shabby old house wanting to sell for over $2 million.

Isnt that insane?

Eastwood is no where near the water , no major shopping centre like westfield or a major interconnecting train station.

So what so good about Eastwood? and why the ridiculous prices?

The Chinese who buys there cares about:

- Chinese shops
- Chinese restaurants
- Walk to Eastwood train station
- Schools (Eastwood Public, Epping Boys, Cheltenham Girls etc)

Koreans buys there cares about:
- Korean shops
- Korean restaurants
- Walk to Eastwood train station
- Schools (Eastwood Public, Epping Boys, Cheltenham Girls etc)

Water/beach/pub/cafe/westfields are pointless to migrants who needs to go to shops whom speaks with their native tongue. And they have the CASH to pay for it. Forget about interest rate movements, negative gearing, properties rental vacancy issues. They don't care ....