Sydney Syndrome

[strongy1986]

' I don't want to miss out on the next Blacktown or Mt Druitt'

This leads to the notion that you can just pick the worst suburb in any other state capital and in 5 years time you will double your money

Why do Sydney investors think that because it happened there it will happen everywhere else?

Please enlighten me

 

[C-mac]

It is a worrying sentiment, yes. I can't give you a reason why, because then I'd just be speculating. The reality is that anyone who employs such an assumption would be setting themselves up for failure.

As an investor in the far western sydney suburbs you mentioned, I too am a beneficiary of the recent gains there. But that was no accident. I don't have a crystal ball, but I spent six months doing my due diligence at macro and micro economic levels, related to that area. That was about 4 years ago.

Since then I've done similar due diligence (going on 8 months for one particular area) of a different city (similar approach; isolating the lowest/lower socio economic further suburbs), and actully walked away after those months and not purchased anything.

In other cap cities I've done the research and yes, have invested. What I'm getting at is this: like all investor mindsets, those who don't do the proper due diligence, will get stung by blindly replicating this strategy in other cities and larger regional towns.

 

[HomePage]

Why do Sydney investors think that because it happened there it will happen everywhere else?

A generalisation, wrapped up in an absolute. Do you really expect a serious answer or are you just trying to insult as many people as possible with such a rhetorical question?

 

[strongy1986]

A generalisation, wrapped up in an absolute. Do you really expect a serious answer or are you just trying to insult as many people as possible with such a rhetorical question?

Not trying to insult people

Just something I've noticed that people say a lot on here. As mentioned above, often by people who have done no research and quite often by newer posters

 

[bob shovel]

A generalisation, wrapped up in an absolute. Do you really expect a serious answer or are you just trying to insult as many people as possible with such a rhetorical question?

Haha! And get posts up

 

[bob shovel]

It's more of getting the understanding of similar suburbs for people interstate not just - i want to find exactly what happened in blacktown etc. new and prospective investors want to find particulars that are similar to western Sydney, there wasn't just one facet to the area, there are large blocks, granny flat potential, gentrification, units, rental demand, blah blah blah.

i think it would be a safe bet that in a few years people from Brisbane (and else where) will be saying where is a "logan"in Adelaide!

If you don't like the threads move on to the next one!

 

[vaughan]

' I don't want to miss out on the next Blacktown or Mt Druitt'

This leads to the notion that you can just pick the worst suburb in any other state capital and in 5 years time you will double your money

Why do Sydney investors think that because it happened there it will happen everywhere else?

Please enlighten me

I caught the "Mt Druitt" ride in 2011. Apart from mining towns, suburbs in 2770 gave the highest yields in NSW. Simultaneously it had extremely low vacancy rates (less than 1%) and the last of the housing commission places were being sold off for $195k to OOs so it was being gentrified. Edit: or at least cleaned up a bit.

Worst suburb did not enter into it.

 

[Moneyman_85]

Would I be right in saying it's more time in the market for the lower social economic areas for them to develop and grow into nicer areas through younger families buying in a 'cheap' area and renovating their home thus uplifting the area over time?

 

[see_change]

Would I be right in saying it's more time in the market for the lower social economic areas for them to develop and grow into nicer areas through younger families buying in a 'cheap' area and renovating their home thus uplifting the area over time?

People who talk about Mt Duuitt gentrifying have blinkers on .

Places that gentrify have something specific that makes them targets. Places like Paddington , Redfern and Newtown were all working class suburbs at one time , BUT they were close to the city .

Somewere like Mortlake was an industrial dump , BUT was on Sydney harbour .

Mt Druitt is in the middle of no where . It has no redeeming geographical feature . It's not on the harbour or a river , it's not a leafy area . The only place it's convenient to is Mt Druitt . It has moved purely because it was the cheapest place in sydney so was the most affordable place in Sydney for investors . The Herd at work .

Anyone who thinks that their due diligence on the area is the reason why it's
moved is kidding themselves. When I first got involved in investing , I spent about a year in analysis paralysis . Checking out everywhere looking at historical data and you know what . With a few exceptions EVERY THING GOES UP . Ok there are exceptions which is why I steer clear of mining towns . I generally go for capital cities or major regional towns. Smallest place I've bought in is rocky , but it has a diversified economy . I am looking at a smaller town now , but I think there are reasons why that will perform .

If anyone thinks there is something Special about Mt Druitt should stop smoking that stuff they bought out the back of Macca's at Emerton ...

I stopped working there 7 years ago and a little while ago was reassured that the area I worked in had changed and was much nicer . Curiosity got the better of me and I checked .

Same old same old ...

Cliff

 

[vaughan]

Would I be right in saying it's more time in the market for the lower social economic areas for them to develop and grow into nicer areas through younger families buying in a 'cheap' area and renovating their home thus uplifting the area over time?

Is it time for Fankston yet?

Some places have no growth drivers. Some go backward.

 

[see_change]

Is it time for Fankston yet?

Some places have no growth drivers. Some go backward.

I've never seriously checked out Frangers , but I was under the impression from recent posts that it had moved .

Quick check shows it's gone up 5-10 % in last year . stock levels dropping steadily over last four years ...


Cliff

 

[Biz]

People who talk about Mt Duuitt gentrifying have blinkers on .

Places that gentrify have something specific that makes them targets. Places like Paddington , Redfern and Newtown were all working class suburbs at one time , BUT they were close to the city .

Somewere like Mortlake was an industrial dump , BUT was on Sydney harbour .

Mt Druitt is in the middle of no where . It has no redeeming geographical feature . It's not on the harbour or a river , it's not a leafy area . The only place it's convenient to is Mt Druitt . It has moved purely because it was the cheapest place in sydney so was the most affordable place in Sydney for investors . The Herd at work .

Anyone who thinks that their due diligence on the area is the reason why it's
moved is kidding themselves. When I first got involved in investing , I spent about a year in analysis paralysis . Checking out everywhere looking at historical data and you know what . With a few exceptions EVERY THING GOES UP . Ok there are exceptions which is why I steer clear of mining towns . I generally go for capital cities or major regional towns. Smallest place I've bought in is rocky , but it has a diversified economy . I am looking at a smaller town now , but I think there are reasons why that will perform .

If anyone thinks there is something Special about Mt Druitt should stop smoking that stuff they bought out the back of Macca's at Emerton ...

I stopped working there 7 years ago and a little while ago was reassured that the area I worked in had changed and was much nicer . Curiosity got the better of me and I checked .

Same old same old ...

Cliff

Mostly I agree with you but there is a little more to it then just being cheap. Areas in the south west around Campbelltown are almost as cheap and have moved but not as much as the ones towards Penrith and I think the main reason for this is the Airport and the amount of Industrial development around Erskine Park and Eastern Creek.

What you say is pretty much spot on though, People who do 6 months of DD *cough C-mac ^^^* make me chuckle. Your not building Crown Casino or the Taj Mahal. If there is work, infrastructure, increasing population and plenty of people there already you will do ok. No neet to fret over a few percentage point of yield or historical figures.

 

[BayView]

Mt Druitt is in the middle of no where . It has no redeeming geographical feature . It's not on the harbour or a river , it's not a leafy area . The only place it's convenient to is Mt Druitt . It has moved purely because it was the cheapest place in sydney so was the most affordable place in Sydney for investors . The Herd at work .

You'd think that'd be the case, but look at Frankston - particularly "The Pines" in North Frangers.

It has been the centre of feral bogan universe for decades, and despite it's relatively resasonable position in terms of transport, beaches, shopping and so on - it should have been a steady climber, but never really did.

However; it finally did move; I don't know why,. but I saw the results first hand - my SIL was a member of the feral bogan set, and bought a house of one of her friends who had done the usual split-up and wanted to sell scenario. Bought for $91k.

It was nothing special and yer usual feral bogan dump, outside and in.

Sold it about 10 (or 11?) years later and grossed over $300k - subdived the backyard, and did a few minor renos/tidy-up on the existing house up front.

 

[Biz]

What is worse BV, a feral bogan or a steptoe bogan?

 

[beachgurl]

Your post made me laugh Cliff

I think comparisons are made cos people want something to feel familiar in an area where they have no idea. My buying in Brisbane has opened my eyes as to how different things are up there. For example. Lots of people love Queenslanders. When I raised my post war home I wondered if I was doing the right thing. All I could think of was how much harder it would be to carry a sleeping toddler up all of those stairs. Apparently I increased the interest onthe property by adding those stairs.

There are lots of entry points to the city too which makes it different to Sydney, which can only really expand westwards. I think the key is to head to each main road and see where there is a reasonable price drop and check those areas out to find out why the lower price and if gentrification is occurring. Like Sydney, as prices increase, people need to live further away due to affordability. Ipswich a d Logan are a long way from the city and a lot of people who live in those areas don't commute to the city. When I was last at Chermside I hired a car and drive to a relative's house in the Ipswich area. The locals thought I was insane doing such a big drive in one day. To us Sydneyites, that sort of drive is everyday for us.

So lots to consider rather than making direct comparisons tween the Druitt and other low socio economic areas in another state.

 

[vaughan]

I've never seriously checked out Frangers , but I was under the impression from recent posts that it had moved .

Quick check shows it's gone up 5-10 % in last year . stock levels dropping steadily over last four years ...


Cliff

It seems to me moving now, but people have been waiting for something to happen for a l-o-n-g time.

 

[RetireRich101]

according to the Domain Price Guide 2015, nearly all suburbs in 2770 went up 20 % in 2014. amazing stuff.

 

[james start]

Your post made me laugh Cliff

Ipswich a d Logan are a long way from the city and a lot of people who live in those areas don't commute to the city.

This is incorrect by a long shot

Have you ever seen the m1 between 6-9am? It's stacked back to Beenleigh and beyond, half the population of seq commutes into the city every morning from as far as tweed heads and casuarina In nsw

Robina train station to brisbane central? Your lucky if you get a seat ,same with buses from Logan Central to Brissie

Another quality post from a armchair speculater in Sydney

 

[james start]

'

Why do Sydney investors think that because it happened there it will happen everywhere else?

Please enlighten me

What's enlightening is that these suburbs like Logan and Ipswich will and are already going up so I don't know what the point of this thread is

 

[Ed Barton]

When I was last at Chermside I hired a car and drive to a relative's house in the Ipswich area. The locals thought I was insane doing such a big drive in one day. To us Sydneyites, that sort of drive is everyday for us.

Did they suggest an overnight stop at the Jindalee Hilton?

Are you sure it was a car you hired and not a horse?