Hi, just wondering what peoples thoughts were on buying off the plan in Sydney. Might be wise to get in with just a deposit at the moment?
This factsheet will help. Buying off the plan - NSW Office of Fair Trading Best of luck- why off the plan and not an established or newly built place?
Hey thanks for the response, I am looking at 2 bed apartments, I asked the question because I have not done this before, and thought it might be ideal to just pay the interest on the deposit while the property is being built? Meanwhile CG would be on the whole amount. Maybe someone else has done this before and could share their experiences?
Hi Bill, I havn't got that far yet mate, I was just trying to guage what peoples feelings were for the idea and hopefully get some feedback on past experiences.
I bought off the plan last year. The settlement is June/July this year. The reasons for buying off the plan was at that time was: 0.Wanted close to CBD, jobs, infrastructure 1. Wanted new to attract tenants. 2. Wanted strata scheme so everything would be taken care of by strata manager 3. It would give me some time to save more deposit. 4. As that area was a re-zoned area, only off the plan or 1-2 year old apartments were available. Not much to compare. 5. Compared to the price of the 1-2 year old, the price of the unit was not too bad. 6. The price- as much as I wanted to buy a house- no money for such area. 7. Low income so crucial to get FHOG & stamp duty exemption-
Chomp Buying off the plan is a great idea in a rising market but not a good 1 in a falling market. I am optimistic and I believe that we will see price increases from now on. I will be watching inflation and interest rates because the right combination of the 2 could be the trigger of another boom. I am thinking that the next 3-6 months could be a good time to get in because consumer confidence would have dropped and perhaps we will have less competition so we could pick up some bargains. Cheers
I agree with BV where he says the next 3-6 months may be a good time to get into the market. If you look at the history of the Sydney property cycle, you will see the cycles typically last between 8 and 12 years, with the last cycle ending in 2003. The doubling of prices in the Sydney market is usually picked up in the last 2-4 years of each cycle (e.g. Sydney 78-81, 87-89, 89-03) and we could very well be on our way into the back end of the current cycle. With Sydney moving to around 6% in Capital Growth last year after being negative in the previous years and yields back at 5%+ and rising, the signs to get into the Sydney market are in front of us. With vacancy rates at around 1%, construction approvals at the lowest levels in decades and an undersupply of new housing, now is a good time if you can identify the growth spots. Though no one has a crystal ball (that would be nice) the investment fundamentals sure do say now is a good time to get in before the upturn really takes off. Cheers and good luck
Hey Bill, you say "I will be watching inflation and interest rates because the right combination of the 2 could be the trigger of another boom" what type of combinations should I be looking for? I have a feeling that rates will start to drop soon, and that they (government)are trying to slow inflation but I know quite a few people who have been getting some pretty decent pay rises in the last few months (well above so called cpi) what are your thoughts? Chomp
Chomp I meant the combination of inflation and interest rates going down at the same time. It's on the cards. I don't know about large pay increases, in our industry Engineering/construction we got 6% last year and expecting about the same this year. What industry are you referring to? Cheers
BV Well I'm in Perth so things maybe a little different here, but I have a few mates in different jobs Printing Accounting Construction IT I'm in construction as well (estimator) and all of us have had a rise in the range of 20% or so in the last year. I also work with a recruitment consultant (construction only) some of the wages I'm hearing are pretty decent, lack of supply at the moment. Looking at my previous comment, I was thinking that it would be better if inflation went up and interest rates went down but that does'nt happen does it?
No, it wouldn't unfortunately! When inflation measures increase, the Reserve Bank increases the cash rate of $$, which then flows on to interest rates administered by financial institutions such as banks. I agree with salaries and wages in Perth, they are increasing, but we're only a part of the economy - the RBA looks at inflation across the board. As a result, we currently have WA and Qld going very well due to the resources boom, while the other states are languishing, particularly Tas. You don't really want inflation to increase - while this results in higher house prices, it also results in higher building costs, wages, price of food, etc. What would be ideal is an increase in real estate prices while the interest rate decreases. If only!!
Nice one, having such large pay increases in one go reminds me of the past when we had double digit inflation. I generally don't like inflation because the RBA uses it as a benchmark to increase interest rates and as you can imagine I have large loans and it hurts. However, I am thinking that with high inflation my sallary will go up quicker and at the same time my mortgage loses value so 20 years later the same loan will be worthless.
