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Sydney apartment prices

Discussion in 'Introductions' started by chetan_gshah, 3rd May, 2010.

  1. chetan_gshah

    chetan_gshah New Member

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    :D Hello, just joined and happy to be here! Prospective investor in Sydney apartment/townhouse. Wish to know if any of you believe they are overpriced and about to correct. Thanks. Chetan
     
  2. Jacque

    Jacque Team InvestEd

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    Hi Chetan and welcome to InvestEd

    Which suburbs of Sydney are you referring to? It's a big place :D
     
  3. Billv

    Billv Getting there

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    Hi Chetan
    Welcome to the forum
    Happy to have you here.

    Now that's a good question.
    My answer would be it depends on who you are, where you buy and what you buy.
    Sydney is a huge city with many different suburbs and prices vary a lot.

    What does overpriced mean to you?
    People see the same thing differently.
    One can see many overpriced properties close to the CBD but they are only overpriced in the eyes of a low income person. It really depends on who the buyers are and their borrowing capacity.

    If the buyers are 2 professionals on $80K wages each then a $600K loan is no big deal for them so a property in Sydney's inner west for example is still affordable and prices can keep going up till they've reached the level of affordability of the people who live there (or that of those who want to move there).

    The same on the North Shore, prices can be higher because a large % of the people who live there earn more.
    However, outer suburbs are not undesirable either.
    There are many nice outer suburbs with very nice and new facilities and they often offer better lifestyle than inner suburbs.

    Also, as transportation improves and businesses decentralise and move further out, people also move out and you see this in the newer outer suburbs where tradesmen, young professionals and managers buy so they are also able to pay more.

    Are prices about to correct?
    I don't believe they will because there is too much demand and not enough supply. Also, our interest rates will go higher so this will put some pressure on prices but they will act more as a price control so perhaps we won't see as high capital gain as some people think.

    Also, prices are unlikely to fall because unemployment is very low and falling, and the GFC is shielding us so interest eates won't go as high as in 2007.
    I hope this helps.
     
  4. chetan_gshah

    chetan_gshah New Member

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    Hi Bill,

    Thanks for your response. By overpriced I did not mean 'expensive', but a value that is not supported by market fundamentals, such as long term demand and supply and ultimate users' long term earning capacity. I say long term, because, in the short run artificial demand can be created as we have just learnt from the GFC!

    If that helps, let me say I wish to hold the property for 5 years and the intended locations are the surrounds of Parramatta and Baulkham Hills.

    Thanks again,

    Chetan
     
  5. chetan_gshah

    chetan_gshah New Member

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    Location:
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    Jacque, Just responsed to Bill with details.
    Thanks!
    Chetan
     
  6. Billv

    Billv Getting there

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    Chetan

    Prices have moved in those areas and are probably 15% higher than 2009
    but IMO they are not unsustainable or too high to be out of reach for the people who live there.

    However, I'd question your reasoning for investing here if it's only for 5 years.
    Although I do understant that there are not many safe investment options out there and Australia is probably one of the safest and best places to park your money atm.

    I take it you are from India?
    What are you doing in SA?
     
  7. chetan_gshah

    chetan_gshah New Member

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    Hey Bill, that's a smart call! I am from India and work in Saudi and got the PR - so getting ready to migrate to Australia! We may want to move to a house from apartment - hence 5 year timeline. You will most certainly make more money in India/Vietnam etc in next 5 years, but Sydney is not about investment alone!
     
  8. Chris C

    Chris C Well-Known Member

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