Why would you buy in Sydney?

[see_change]

Is there any good values left in Sydney houses yet?

In 20 years everything will look like a bargain .

IMHO At some stage in the next five years some people will buy properties that will go done in the next slump to below what they paid for them.

The top end of the market still probably represents good value in some places . I'm talking 2.5 mill plus .

Cliff

 

[Logica]

In 20 years everything will look like a bargain .
.............
The top end of the market still probably represents good value in some places . I'm talking 2.5 mill plus .

Cliff

I agree with Cliff. Whilst there may be opportunities in various price points, the top end still offers good options. Upper North Shore, Roseville, Lindfield etc around late $1m's early $2m's and adding $250k in intelligent extension / upgrade = $500k more value. I wonder what these properties will go for in 10 years time?

Paul

 

[kamchatsky]

I agree with Cliff. Whilst there may be opportunities in various price points, the top end still offers good options. Upper North Shore, Roseville, Lindfield etc around late $1m's early $2m's and adding $250k in intelligent extension / upgrade = $500k more value. I wonder what these properties will go for in 10 years time?

Paul

Well the stamp duty for buying 2M house is 95K, plus your lawyer fees etc (make it say 100K). That is a lot of money behind on the day you buy the property.

So you throw another 250K for extension/upgrade (assuming DA fees included), so you spend 350K for potentially 500K value, say net $150K, and that is on a 2.5M house. The percentage gain is small (6%), high level of capital required, and likewise the risk.

Also these houses would most likely not getting much rent to cover the interest costs meaning high level of negative gearing (unless your house can get say > 2500 per week rent). To me it is only good if it is your PPOR and you have a lot of money to splash around, which I don't have, and the bank may not lend me.

 

[Ausprop]

In 20 years everything will look like a bargain .

I think that time frame is too short, particularly if you buy at the peak. 30 years perhaps.

 

[see_change]

With the GFC and the recession we had to have, it took less than five years for prices to be back to peak levels .

In 20 years they will be dramatically above the current levels .

In 88 we bought at the peak of the market in concord west for 200k . After renovations we sold for around 300 in 94 . Got our money back . Similar properties now sell in the high ones .

Brisbane seems to take longer to recover .

Cliff

 

[Logica]

Well the stamp duty for buying 2M house is 95K, plus your lawyer fees etc (make it say 100K). That is a lot of money behind on the day you buy the property.

So you throw another 250K for extension/upgrade (assuming DA fees included), so you spend 350K for potentially 500K value, say net $150K, and that is on a 2.5M house. The percentage gain is small (6%), high level of capital required, and likewise the risk.

Also these houses would most likely not getting much rent to cover the interest costs meaning high level of negative gearing (unless your house can get say > 2500 per week rent). To me it is only good if it is your PPOR and you have a lot of money to splash around, which I don't have, and the bank may not lend me.

Well, I calculate the return differently. It is $150k gain on $350k investment = + 42%

Agree that this would probably best work as PPOR considering the achievable rental yield.

 

[see_change]

Well, I calculate the return differently. It is $150k gain on $350k investment = + 42%

Agree that this would probably best work as PPOR considering the achievable rental yield.

Sorry have to disagree . That's exactly the wrong way to look at it .

Holding costs will be a killer , time to get changes through council canbe a pain in upmarket areas where anyone can afford or is a lawyer .

And IF , THE MARKET TURNS , you could quickly find your self sitting on a very big loss .

When the upper market turns its feral .

Cliff

 

[RetireRich101]

Is the last one with the bag, a better off in Sydney..

this 2 property in Lindfield is just side by side each other. It was sold 1 week apart. Open inspection are same time and date, but agent are from different suburbs.

I inspected both. the 86 is a total knock down. it haven't been renovated for 40 years. 88 was in good condition. both had front and rear frontages. both had same amount of big trees. both not developed even purchased together. best use would be a granny flat accessed from the rear.

Both agent presented the property well. The 88 would be at least $200-300k more than 86, however the actual results achieved was was $40k less..


http://www.realestate.com.au/property-house-nsw-killara-118945839
Sold for $1,611,000
Sold Date: Sun 22-Feb-15
88 Fiddens Wharf Road Lindfield NSW 2070
Land Size:1031 m?

http://www.realestate.com.au/property-house-nsw-lindfield-119012375
Sold for $1,655,000
Sold Date: Mon 02-Mar-15
86 Fiddens Wharf Road Lindfield NSW 2070
Land Size:986 m?

 

[Marty McDonald]

I agree with Cliff. Whilst there may be opportunities in various price points, the top end still offers good options. Upper North Shore, Roseville, Lindfield etc around late $1m's early $2m's and adding $250k in intelligent extension / upgrade = $500k more value. I wonder what these properties will go for in 10 years time?

Paul

I think that market is moving too.

I have clients looking in killara / lindfield / Roseville. There really isn't much under $1.5 now. Houses that would have sold for $1.7m 3 years ago are now selling for $2.2-2.4. One I know of in Roseville sold 18 months ago for $2.3 just resold for $2.8 no Reno.

 

[Jacque]

There are lovely homes in my suburb under $500K. The acreage ones under
$1m are just awesome. We are less than 20klms from CBD and 10 minutes drive to Strathpine train station, under an hour to the Sunshine Coast beaches too. I'm about an hour to the Gold Coast via the Gateway.

Acreage is a great life isn't it Angel?

Though I'm a Sydney gal born and bred I have lived in Brissy (amongst other places) and certainly agree acreage offers better value when you compare land per sqm. The same applies in Sydney, though, as when you consider price per sqm you can pay 80% LESS for a suburb 10-15mins drive away. I did a FB post just on this today https://www.facebook.com/HouseSearch

Sydney is still going through an active growth phase and, in our current experience (searching, assessing and buying properties all the time) there's still a way to go this year. As for the "top end" representing better value, it is really determinate on which suburb and what price bracket denotes for that particular area, as not all are obviously equal in Sydney. $2m may look like great value in Roseville but not so great in Castle Hill. $700K may look cheap in Glenwood but not so in Penrith etc etc. It also comes down to the likely demographics of the area and the buyer profiles.

Why buy in Sydney? Well obviously I'm biased given what I do and where I live but if you can afford to hold a property in Australia's best known, beloved and international city then why not?!

 

[windyzz]

Sydney has a very strong and solid economy. And the next generation Gen Y like to live close to work, trendy cafes, shop, etc.
I believed there will always be a strong demand in Sydney, and hence growth.

 

[strongy1986]

Sydney has a very strong and solid economy. And the next generation Gen Y like to live close to work, trendy cafes, shop, etc.
I believed there will always be a strong demand in Sydney, and hence growth.

True that demand will be strong but will people have enough cash to increase prices?

Are the prices in Sydney due to a bit of old money?

 

[windyzz]

True that demand will be strong but will people have enough cash to increase prices?

Are the prices in Sydney due to a bit of old money?

For Now i guess.... for how long.. nobody knows.

 

[charlieandkath]

True that demand will be strong but will people have enough cash to increase prices?

This is where the Economic Clock theory comes in and why I believe Sydney has a fair way to run yet. Economic Clock says share market booms first then the property market kicks in. When the sharemarket booms the extra cash gets pulled out by the smart people and put into property.

Sharemarket has gone up a lot since GFC bottom in circa March 09?? but has not boomed yet either. Economic Clock pattern is playing out nicely though as the hesitant recovery is making the Reserve Bank drop interest rates. This then will put us in a general recovery, commodity prices will then start to rise and then a strong recovery happens with low interest rates. This causes the boom in the sharemarket which then flows to property prices.

Full of crap aren't I?