Where to buy... and when?

[tess85]

Hi all,

Not sure if anybody here remembers me but hello SS! Good to be back. I can see some familiar names about and the forum bantering is pretty much the same
Just some background story if anybody cares: bought IP3 in mount druitt 2 years ago, followed by a serious health crisis, wasn't able to work (luckily the IPs were still bringing in rent! certainly have learnt some important lessons about passive income), only just starting to get back into the game now, but a lot has happened in the past 2 years, am out of touch with the market!

During the past couple of years it looks like all the markets have been doing well - Heron Todd White says that almost all markets are rising (Sydney, brisbane etc)

Have I missed the boat in Sydney? We already have 2 IPs here so maybe diversifying to Brisbane is better. Then again... I can't trust my judgement / flawed logic re: not buying just because prices are rising. I remember not buying in Summer Hill in 2010 for the exact same reason (prices rose from $400k to $450k for a 2 bedroom unit - which are now worth about $550k+! Kicking myself now)

Anyway just hoping to bring the "time" element into discussion here - time in the market vs "timing the market". Obviously no-one wants to buy at the peak of the market....

Cheers!
Tess

 

[Propertunity]

..... Obviously no-one wants to buy at the peak of the market....Tess

I don't get this. IF you are waiting to buy in a confirmed rising market, then you will always be paying the highest price ever paid. Much like your example of Summer Hill in 2010 - you could not buy because of high prices and now they are even higher .......and next year..... Cheers,

PS - I don't think the Sydney market is anywhere near where it is going to peak. We've only had 8-12% growth in 2013.

 

[Peter_Tersteeg]

I don't think Sydney is at it's peak. It's certainly had a good year, but a lot of the market was flat for a long time prior to the recent increase.

Brisbane is also showing strong positive signs. It's had a good year and I think there's more to come.

A good argument for diversifying interstate is that it may make land tax more manageable. It's one of the reasons we've moved on from Melbourne recently.

I'm also a bit sceptical of trying to time the market. If you do it successfully it'll obviously have fantastic results, but often you only know when the peaks and troughs are well after they actually occurred. For many a more reliable strategy is to simply invest for the long term, via properties and areas that will perform well over a long period of time. Certainly it's a more conservative approach with more conservative results, but it's less reliant on the market at any give point in time.

 

[ashao]

as individual you wouldn't and couldn't buy many many times, you have to time the market in a way to make good investment result.

 

[alexlee]

as individual you wouldn't and couldn't buy many many times, you have to time the market in a way to make good investment result.

Actually, you'll find that many people on this forum buy 'many many times'.

 

[MTR]

I don't get this. IF you are waiting to buy in a confirmed rising market, then you will always be paying the highest price ever paid. Much like your example of Summer Hill in 2010 - you could not buy because of high prices and now they are even higher .......and next year..... Cheers,

PS - I don't think the Sydney market is anywhere near where it is going to peak. We've only had 8-12% growth in 2013.

Hi Alan

I agree, Syd will still experience growth, go you beautiful thing

West Syd has certainly been a star performer, bank value came in and have made 40% profit from date of purchase which was in 2010, not too shabby, and with a reno would achieve much more I believe.

How is the central coast going?

Cheers
MTR

 

[tess85]

Nice work MTR! I have had a similar experience, bought in Mt Druitt end of 2011 for ~$170k, comparable sales $250-$260k (admittedly not valuation) - but we're going to get it re-valued soon, will be interesting to see what bank says.

I suppose I've been talking to a lot of friends who are currently in the market for a PPOR and the general consensus is that the Sydney market has gone crazy in the last few months! That's why I have felt a bit hesitant to buy IPs knowing the price has gone up so much in recent months. Admittedly I know my logic is rather faulty, from experience...

In my case we absolutely lucked out with buying our PPOR in the market doldrums around the end of 2009 due to the GFC, so it has seen a very nice CG. I guess I was hoping to buy in a similar fashion but the market conditions just aren't the same. Also I think "luck" is a critical factor to how I have previously managed to buy at the absolute bottom of the market. Looks like I'll have to accept that Syd is in a rising market...

Oh well, I might complain about the higher prices now but at least I'm happy I got into Sydney in 2009 and 2011. Central coast properties (bought 2010) are plodding along steadily but we mainly bought them from a yield perspective rather than CG. Alan can comment further, I'm sure!

 

[monalisa]

I think Sydney won't be as crazy in 2014 as it has been over the last 12 months.

We personally won't rule Sydney out - may be need more creative ways to make money vs buy and hold.

I bought my late 90s unit in Mt Druitt Dec 2011/ Jan 2012 for $205K. The Bank valued at $265K recently - even though there was a sale in the complex for $275K! There is this CBRE valuer covering the Western Sydney area - he valued my PPOR mid 2013, and it was a crap val (another valuer val'd $30K higher).

 

[monalisa]

Welcome back Tess. I hope you are feeling better. Hopefully we can catch up in the new year