Where to Buy – Is the Sydney Boom Over?
How Do You Want To Spend Your Time?
Written by Matt Ivers
According to a UBS report, Sydney is now the third most-valued city in the world. This is bad news for property investors as the city is now experiencing a buyers market. The market has become so tough that even hardcore investors are struggling. When the market is this tough it can be almost impossible for first-time investors to find their way in the property market.
There are some compelling statistics that suggest that Sydney is no longer a wise choice for property investors. In the past few months, auction clearance rates have dropped a whopping 20%, reducing capital growth and turning the tables on vendors towards more of a buyers’ market.
Investing in Sydney has not only become more expensive to enter upfront, but existing investments are also proving tough with declining rental returns down from 5% a few years ago to just above 3%. This has dramatically increased investor’s contributions despite record low interest rates.
All this does seem to point to the conclusion that the Sydney property investment party is drawing to a close. It has been a great party with property prices increasing 50% in just over 3 years. Like all good nights they eventually come to an end, that is of course unless you can find another good venue.
The great news is we’ve found one and the best part is it is a lot cheaper to get a foot in the door and the rental returns are fantastic.
The Next Venue
BIS Shrapnel one of Australia’s leading property economist forecasts suggest we head north to Brisbane and the Gold Coast. They suggest the party is just about to start up here.
Brisbane’s average house price is $480,000 compared with $960,000 in Sydney. Over the next few years the double-digit growth forecast and the average rental returns of 4.5%. This makes owning investment property easy on the wallet.
Brisbane is a city in transition. Where it was once considered a sleepy city only a decade ago it is now becoming a modern cosmopolitan city. With a more laid back lifestyle, first class restaurants, great night life, cafés, sporting and cultural events and average incomes to rival its big brother cities to the south it’s no wonder the focus is now on the north.
How Patricia and Mark Made The Change
About five years ago Mark and Patricia decided the time was right to relocate from Sydney to the Tweed Coast to a suburb called Terranora. They loved Sydney when they were younger, but decided they wanted a better lifestyle for their children.
Terranora is 10 minutes from the Gold Coast airport. Which is perfect for Mark as he needs to travel a lot for work. “There is a price to pay and it is more travel. I make the most of the travel time to read or catch up on work”, Mark says.
The bang for the buck in Terranora is huge compared to Sydney. The suburb has great amenities, acreage for the kids to get outside and ride their bikes and a real country feel. Plus is it only 5 minutes to town and 10 minutes to the beaches.
“There was no way we could afford acreage let alone with views to the coast in Sydney. Patricia and I are very happy to have made the move. The timing for us was right,” Mark says.
With the gap between SE QLD and Sydney having widened further in the past three years its little wonder that the south is looking north.
More about Matt Ivers
Matt started Vision in 2000 after working in the media marketing and sales industry for over 10 years, culminating with a stint with a large mortgage firm. Now, Matt is one of the country’s leading finance brokers, helping hundreds of clients develop their property investment strategies. You can contact Matt here or email and Matt will call you.
What people say:
“Matt Ivers has been taking care of my bank finance for almost 15 years and this long successful association leaves me satisfied that my best interests are being taken care of. When we discuss business, as a client I get the strong sense that Matt is working hard to understand my requirements and find options that best suit me. This leaves me with confidence because of his extensive experience and the team that he has gathered to work with him.” Anson D
“Matthew Ivers at Vision did the finance for my first house back in the year 2000. It was a small company back then as Vision itself had only just started. It was obvious to me that Matthew (and his business partner David) were going to be successful in their field as my questions were always answered promptly and their knowledge of the various products they had on offer was excellent. Over the last 14 years they have done all of my finance (five properties in total) and every time the service has been as good as I could have hoped. Recently, Vision has moved into being involved in the finding and financing of investment properties and having used the service I have found it to be fantastic, taking the hours out of going through plans for new developments and just having Vision earmark the ones that look the best (and in potential growth areas) has been a great advantage for me. I would have no hesitation in recommending Matthew, David and the rest of the Vision team to any of my friends looking for a quality finance broker.” Steve M