Mathematically, aprox or even more 4.7% annually,
Best case scenario? Lol... silly....
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Mathematically, aprox or even more 4.7% annually,
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?
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
Well Melisa, it most likely depends in the area you are looking for,
I would recommend off the plan apartments for IPS
Like Sydney, "Brisbane" is not a property market. There are many different markets in Brisbane so state that Brisbane home values have fallen by 1.4% in the last years does not accurately reflect growth cycles in sub-markets. For example, the inner city apartment market will perform very differently to the inner-middle ring housing market in the next few years which will perform differently to the northern suburbs housing market which will be different to the southern suburbs apartment market...you get the picture.
On a broader picture, even if this were true for a given suburb/market, if fundamentals are good, the fact that prices have fallen in a given market is a good thing. Everything moves in cycles and you want to catch an up cycle before it's happened. When the data shows that prices have fallen and stabilised, it more than likely means it's due for growth all other things being equal. This is also the point at which you will generally find your best yields, minimising your holding costs and allowing you to take advantage of the up cycle in that market, use the equity on a stable cash flow base and reinvest it elsewhere. Market fundamentals for Brisbane are quite strong so I'm not sure at what data you're looking at. I'd be interested to know your research sources.
By buying into a market at the top (like Sydney - let's assume it's just one big market), not only are your yields poor and therefore holding costs higher - which by the way, if they're high now wait until interest rates go up - then you sit in a stagnation period, or even a correction, for quite a while and depending on your personal cash situation, miss out on short term equity for reinvestment. It depends on your plan - if you want to buy a few properties, this kind of strategy of just following markets that have already boomed will significantly slow your growth plan. If you just want one property and that's it, well, in long term Sydney probably won't have any problems. As I've mentioned, it's just the terrible holding costs in the mean time. Remember, if you don't get growth beyond what your after tax cash flow is costing you, the investment is a waste of time.
Good luck with your plan
Thanks for your replies. The main reason I have no interest in investing in Brisbane is due to higher unemployment & low employment growth also home values have actually fallen in Brisbane by a total of 1.4% over the past five years.
I still think there may be growth in sydney over the next 2 years & just looking for suburbs which are still affordable to the average family, close to transport, universities etc...
Of course. I was just including some things to consider since many people are suggesting Brisbane and some people tend to blindly follow without doing their own research and planning for their circumstances.
With all due respect mate your advice is very poor at best. Unless you actually invest in property yourself and have made a great deal of gains from OTP property consistently, i wouldn't be going down this route. And that's putting it mildly.
Leo
Like Sydney, "Brisbane" is not a property market. There are many different markets in Brisbane so state that Brisbane home values have fallen by 1.4% in the last years does not accurately reflect growth cycles in sub-markets. For example, the inner city apartment market will perform very differently to the inner-middle ring housing market in the next few years which will perform differently to the northern suburbs housing market which will be different to the southern suburbs apartment market...you get the picture.
On a broader picture, even if this were true for a given suburb/market, if fundamentals are good, the fact that prices have fallen in a given market is a good thing. Everything moves in cycles and you want to catch an up cycle before it's happened. When the data shows that prices have fallen and stabilised, it more than likely means it's due for growth all other things being equal. This is also the point at which you will generally find your best yields, minimising your holding costs and allowing you to take advantage of the up cycle in that market, use the equity on a stable cash flow base and reinvest it elsewhere. Market fundamentals for Brisbane are quite strong so I'm not sure at what data you're looking at. I'd be interested to know your research sources.
By buying into a market at the top (like Sydney - let's assume it's just one big market), not only are your yields poor and therefore holding costs higher - which by the way, if they're high now wait until interest rates go up - then you sit in a stagnation period, or even a correction, for quite a while and depending on your personal cash situation, miss out on short term equity for reinvestment. It depends on your plan - if you want to buy a few properties, this kind of strategy of just following markets that have already boomed will significantly slow your growth plan. If you just want one property and that's it, well, in long term Sydney probably won't have any problems. As I've mentioned, it's just the terrible holding costs in the mean time. Remember, if you don't get growth beyond what your after tax cash flow is costing you, the investment is a waste of time.
Good luck with your plan