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is sydney ripe for buying

Discussion in 'Real Estate' started by talbashan, 8th Oct, 2005.

  1. talbashan

    talbashan Well-Known Member

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    hi all
    what are your thoughts on buying property in sydney?
    i know steve talks about rental reality, but i've always been told that owning property in the eastern suburbs of sydney will never be a bad investment, especialy over the long term.
    I know that buying a house in the ES might be out of reach but apartments are getting more and more affordable and although don't have the land content... again, its the ES.. lol
    what are your thoughts about this?
     
  2. Steve Navra

    Steve Navra Well-Known Member

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    Hi Tal,

    Sydney is stil about 5% to 7% above rental reality!! Not to say that you can't find the occasional exception (bargain) but you have to look pretty hard and far.

    In general, Sydney property prices outgrew Reantal Reality by late 2001 / early 2002.

    I have read many reports that say Sydney property is too high / plateaued / bottomed out / etc . . . mainly just 'someones' opinion.

    The reality is what the market is telling us:

    The rental reality figures for postcodes as at early 2002 + A.W.O.T.E over the time period = Reality Value now.

    I suggest that by assessing what the mrket now indicates, one can only deduce that there is at least another 5% of median price decline ahead of us BEFORE we can say the Sydney market has bottomed.

    It will be at this Rental Reality point in time that Sydney will be 'right ' for buying of IP's . . . and I will be the first to let you know :)

    Eastern Suburbs?? Yes the East has the best record of consistent capital growth (Based mainly on high levels of ownership in the area.) If you are buying a PPOR and have a long term view, then you should start looking about now.
    For IP's I would probably wait approx 6 months (Certainly another interest rate hike will help); or until RR indicates that the timing is right.

    Land content is a BIG factor for potential future CG.

    Regards,
    Steve
     
  3. Dave

    Dave Well-Known Member

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    Hi Steve,

    Thanks for your insight.

    Perhaps rental reality data should be published within the member's area of this forum, would be a nice value add :p

    Thanks,

    Dave
     
  4. Steve Navra

    Steve Navra Well-Known Member

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    Yep,

    Working on this now :)

    Regards,
    Steve
     
  5. talbashan

    talbashan Well-Known Member

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    steve,
    thanks for the reply. just out of interest as we discussed land content, do you ever see a time in sydney's eastern suburbs when a house (fitting the land content criteria) will also fit the rental reality criteria? or are we 'doomed' to being restricted to units in the eastern sub's when looking for IP's?
     
  6. Mark Leo

    Mark Leo Well-Known Member

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    is sydney ripe for buying?

    Tal,

    Prices are definitely heading in that direction ie down, but are not quite there yet... Although from recent articles I've been reading, you shouldn't have to wait for too much longer to achieve r'reality as they are saying Sydney prices have come down 9-10% from their most recent peak. Another 5-7% reduction is within sight. ;)

    Concur with the above comments on the importance of land content.

    Mark Leo.
     
  7. Steve Navra

    Steve Navra Well-Known Member

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    Hey Tal,

    Why do you say this?

    Definitely yes!!

    Incidently I do not differentiate between houses and units IF they fit the land content requirement.

    The Eastern suburbs will probably be one of the first areas that becomes RR compatible . . . it is just that affordability (Even with RR) will be an issue for most.

    Regards,
    Steve

    PS: I just bought a home in the East . . . yes within RR :p
     
  8. talbashan

    talbashan Well-Known Member

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    Hi Steve
    Congratulations on the new property.
    From what you write (and you Mark), although rental reality will hit the latte drinking suburbs soon, the avarage/starting/novice investor will have to start with units unless he wants to branch out to QLD, VIC etc because of affordability issues.
    There is a saying where i come from.. "always buy a property you can drive past..", hence my preoccupation with the eastern suburbs... :)
     
  9. Steve Navra

    Steve Navra Well-Known Member

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    And there is a saying from where I come from . . . "always buy a property you can FLY past...!!"

    Should be no problem for you :p

    Regards,
    Steve
     
  10. talbashan

    talbashan Well-Known Member

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    funny you should say that, Steve,
    many guys from my work place use google earth to inspect potential properties. i think you have to download some program (freeware) and you can view a satellite image of nearly the whole of earth (i think they update it regularly). you can go down to a height of about 600' with quite a good resolution. what will they think of next....
     
  11. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    There's a real estate agent in Adelaide (Toop & Toop) using a commercial addon to Google Earth that allows you to actually do virtual inspections of the properties and surrounds that they have on their books - basically gives you a place marker for the properties they have available to allow you to find them easily - great idea (and one of the things Google intended it to be used for)
     
  12. Steve Navra

    Steve Navra Well-Known Member

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    I have a gorgeous tenant in my Noosa property . . . so I am putting a swimming pool in :p
     
  13. talbashan

    talbashan Well-Known Member

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    no one would blame you for over capitalising...
     
  14. Dave

    Dave Well-Known Member

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    Hey Steve,

    Does she have good 'leverage'? Maybe you should make a 'deposit'? :cool:

    If you dont mind me asking, was it an IP or a PPOR, a house or a unit?

    -Cheers

    Dave
     
  15. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    Hey guys let's keep this family friendly okay ? Enough with the innuendo :p
     
  16. Bob

    Bob Well-Known Member

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    Innuendo

    Is that a suppository?

    Bob
     
  17. kennethkohsg

    kennethkohsg Well-Known Member

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    Dear Steve, Sim, Michael

    1. I will like to hear your views on the Sydney property market over the next 3-5 years time frame?

    2. Care to share them with us from the rental reality and housing affordability perspectives and from your own investing experiences in this particular market, please?

    3. I look forward to learning from each one of you soon, please.

    4. Thank you

    regards,
    Kenneth KOH