Where to invest in Sydney

Investing in north west & inner west

Hi guys I'm a first time investor & finding it hard to decide on which suburbs to invest in within Sydney. I would like to purchase 2 apartments (2 bedders) around the mid 5's. Capital growth is top priority but obviously a good rental yield is also important. 2 suburbs we are currently looking at are North Parramatta & Dulwich Hill. Would appreciate any advice as I have been searching for quite sometime however to scared to commit as I am afraid of making the wrong decision! TIA
 
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Hi Ladymelissa,

Check this post of mine out: http://somersoft.com/forums/showpost.php?p=1317933&postcount=25

Is there a reason you are looking at Sydney right now? As you may be aware, the Sydney market started rising in January 2013 and has risen significantly. I personally can't justify the current rental yields. I don't have a crystal ball as to where the market will go and whether it will keep going, my gut feel is, most of the growth has already happened in Sydney.

Don't use Sydney as a dart board and buy anywhere, I think it might be a bit too late for that now. If you were buying start of 2013, in hindsight, you could have bought anywhere in Sydney and done well. I reckon it's going to be hard holding a property if you buy at the peak and don't see any movement for a long time to come (again I don't have a crystal ball).

If I was in your shoes, I'd consider Brisbane. Hire a local buyers agent who can talk you through the basics and show you the ropes. It will teach you a lot. Wombat777 used a BA in Brissy. Check his post out here: http://somersoft.com/forums/showthread.php?t=108506

So what is encouraging you to buy in Sydney?
What's your budget? What deposit are you putting in?
Do you have a good broker on your side?
Are you buying a property as a one off, or do you intend on building a portfolio?
Why are you investing in property? What's your driver?
Have you read any investing books? Rich Dad Poor Dad by Robert Kiyosaki & Richest Man in Babylon by George E. Clason come to mind.

I learned within the first few years of investing that, there is no perfect investment property. It needs to tick boxes around what makes a good investment to you and you only. No one would be able to point out an area where you must invest. It would come down to gut feel and what you think about an area and whether it fits in with your criteria. Hence nobody can make that decision till you do settle on an area and research.
Cheers,
MsAli
 
A great post with great recommendation MSAli!
Also, the timing could be much better for investing in QLD at the moment...
For same of SYD money premium property could be secured in BRI, or more IPs further away....
 
Would appreciate any advice as I have been searching for quite sometime however to scared to commit as I am afraid of making the wrong decision! TIA
If you have that attitude trying to buy in Sydney, you will be eaten alive and never successfully buy anything! :eek:

It is hard enough for us as BAs to buy in the present market, and that's all we do all day for a job. :p


Hi guys I'm a first time investor & finding it hard to decide on which suburbs to invest in within Sydney. I would like to purchase 2 apartments (2 bedders) around the mid 5's. Capital growth is top priority but obviously a good rental yield is also important. 2 suburbs we are currently looking at are North Parramatta & Dulwich Hill.
There is nothing wrong with either of these suburbs. In N. Parramatta up to the mid-5's I'd be looking at the top floor of a 3 x storey walk-up. In Dulwich Hill for the same thing, you'd need another $100K, so reduce your expectations here.

You could consider a 1brm (rather than a 2brm) anywhere from Erko / Newtown out to Croydon if you want to stick with the Inner West.

Happy hunting!
 
There is no right and wrong decision. Everyone has their own thoughts and predictions as well. I think there could still be areas in Sydney with potential to grow but more in the lower end and depending on locality.

The Brisbane market is a bit different to Sydney though but it could also not grow further because of lower demand. Even near the CBD vacancy rates are 2-3x higher than Sydney areas. Population growth is almost 1/3 of Sydney. These are factors that weigh on prices and investment potential.

Even now, many companies are marketing off the plan Brisbane properties to Sydney investors because they are lower cost and easy sell.
Will this help vacancy? Probably not unless more people move to Brisbane.

Chinese investors are barely touching Brisbane and this won't change. No one can know for sure what will happen to prices but the only positive at the moment is that you can get higher yields around particular areas in Brisbane compared to Sydney.
 
There is no right and wrong decision. Everyone has their own thoughts and predictions as well. I think there could still be areas in Sydney with potential to grow but more in the lower end and depending on locality.

The Brisbane market is a bit different to Sydney though but it could also not grow further because of lower demand. Even near the CBD vacancy rates are 2-3x higher than Sydney areas. Population growth is almost 1/3 of Sydney. These are factors that weigh on prices and investment potential.

Even now, many companies are marketing off the plan Brisbane properties to Sydney investors because they are lower cost and easy sell.
Will this help vacancy? Probably not unless more people move to Brisbane.

Chinese investors are barely touching Brisbane and this won't change. No one can know for sure what will happen to prices but the only positive at the moment is that you can get higher yields around particular areas in Brisbane compared to Sydney.
The issue is not whether SYD or BRI, there are other cities to invest too. The issue is what is your strategy for investing and what you wish to achieve? Also supply and demand, population and economic growth of each city will need to be analysed when proceeding there...
Isn't income or growth all relative? If return on investment is say 8%, does it matter where it is located? If leverage permits more IPs to be purchased in BRI, or ADE, or MEL, or PER at the moment and the numbers stack up, what's the problem? Investing strategy should be from top to bottom approach, whereas some will approach it from bottom up, right?
I suppose it does take few years to grasp it, more knowledge on proper research, and a strategy involving diversification for investment spread throughout the cities to take advantage of the cycle growth.
If we look at ABS figures, no large city in AUS grown uniformly and consistently, but various cities grew at different points in time. Yes, it is also not uniform and no one has a crystal ball into the future but to imply that only SYD will grow is wrong.
Most starting out do not understand that the IP is to be a vehicle to your wealth creation, thus the strategy would dictate how you would proceed. There's nothing wrong with investing just in SYD if that's the strategy you wish to adopt, right?
 
Well Melisa, it most likely depends in the area you are looking for,
I would recommend off the plan apartments for IPS
What? Off the plan? Are you nuts?!?! If you buy off the plan back 2013 yes you'll get the growth. it's just stupidly risky to buy off the plan right now.

No no no
 
Seems like someone has never invested and getting his tongue involved,
Perhaps, you have not heard about that apartment in darling harbour, sold out in less than 5 hours, and you think people would buy this just to lose a couple of mill?
 
Thanks for your replies however I'm not interested in investing in Brisbane at this stage.
This very short answer begs a question: why not? Is there a particular reason why you chose N Parra? It not a bad area and has some strong future fundamentals but how well does it fit your strategy? First select your goals and strategy then the suburbs.

Be open to investing in other states as mentioned by MIW. I have a client from Adelaide and I'm looking for him around Parramatta because it suits his strategy. However, I have had several clients from Sydney for whom I bought IPs in Adelaide...
 
Seems like someone has never invested and getting his tongue involved,
Perhaps, you have not heard about that apartment in darling harbour, sold out in less than 5 hours, and you think people would buy this just to lose a couple of mill?
Dude.. sold out in 5 hours doesn't mean it's a good investment.
I have 2 OTP but they are purchased back in 2013, and yes they have increased, but I bought these where the market is rising. Buying OTP now is like committing suicide.
2 bed apartment in Parramatta is marketed for 850-900 k where you can get the established for 550k. what do you think will happened to those OTP when they settled. Good luck getting finance as the valuation will be a lot lower than what your purchase.

On top the strata Will be very expensive and you'll be having ip with such low yield.

When rates going up, the premium apartment like the new one will be the first one to get affected.

Again most OTP contain hundreds of units. What is scarcity factor about it?
 
Seems like someone has never invested and getting his tongue involved,
Perhaps, you have not heard about that apartment in darling harbour, sold out in less than 5 hours, and you think people would buy this just to lose a couple of mill?
interesting you mention that development.

let's look at the 50sqm that sold for $800k and above.

if someone was to buy this off the plan what sort of capital growth can you see them making in say 3 years?
 
interesting you mention that development.

let's look at the 50sqm that sold for $800k and above.

if someone was to buy this off the plan what sort of capital growth can you see them making in say 3 years?
In Shanghai, double, triple. The smoggy sky is the limit:)
 
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