Hi guys my parents have a 3br townhouse in Botany NSW that they are looking to sell but they are not sure if it’s the right time to sell now or wait another 1-2 years. Do you think the Sydney detached housing market has peaked or will continue to grow?
Im also getting mixed news of the direction of the RBA cash rate next year. Some analysts are predicting 2 cuts while others say it will rise but will still be at historical lows.
The IP is positively geared and making them extra cash as the rates are low and their LVR is <30% so they are really not in any rush or not financially over extended. Also the current tenants have just moved out and it’s either they find new tenants in the new year for another 12+ month lease or makes some small improvements and sell. They just want to make sure they sell at the correct time.
Thanks for your feedback guys!
Hi Parky,
Perhaps even more important than “What is the market going to do?” – I would be saying “Are they READY to sell it?”By that, I mean are they fully aware of the effect this sale will have? Have they spoken to any adviser about it? It sounds like they are not in a rush, and that is good. Maybe steer them toward checking out a few things – like:-
1. Is the sale of this place going to be initiating a CGT event? i.e. Will they owe Capital Gains Tax on it? If they will, do have them take the time to PLAN for the sale. See, it might be that next year one (or both) are due to retire – that “might” mean that next year would be a better time to sell it than this year. Have them check with their adviser just how much CGT they might be up for, and how it might be abated !!
2. If it were sold, what is their plan for the monies that are released? Do they have an alternative that will give them a similar positive cashflow?
3. Is there a way that whatever happens, it might be more favourable to “bone up” on Super and its benefits, then work out how a sale (or not) of this place might create a really positive Super answer for them.
Re Sydney itself, I have long thought it is in little danger of a major crash in property values. Sydney is the gateway to the world, and people from other countries are busting their breeches to get here. While ever Australia is deemed to be “a great place to emigrate to”, the overseas investors and immigrants will be helping to put a floor under the property values.
But then, I am not in Sydney, and not buying there (have never bought there – I wish I had 16 years ago when I first went to work there, and I could have bought a property in Beecroft for $400k. Seemed expensive at the time !!
I don’t see any need to rush on your parent’s behalf – but DO have them check out “the way forward” BEFORE they go there,
Benny
Hi guys my parents have a 3br townhouse in Botany NSW that they are looking to sell but they are not sure if it’s the right time to sell now or wait another 1-2 years. Do you think the Sydney detached housing market has peaked or will continue to grow?
Im also getting mixed news of the direction of the RBA cash rate next year. Some analysts are predicting 2 cuts while others say it will rise but will still be at historical lows.
The IP is positively geared and making them extra cash as the rates are low and their LVR is <30% so they are really not in any rush or not financially over extended. Also the current tenants have just moved out and it’s either they find new tenants in the new year for another 12+ month lease or makes some small improvements and sell. They just want to make sure they sell at the correct time.
Thanks for your feedback guys!Excellent reply and insights from Benny.
I will only add this: nobody can say for sure what the future will bring. We are around peak time, most will agree. Are we 11 o’clock in the ‘cycle clock’ or 12 or 1, opinions vary. I wouldn’t try to time the market exactly at the peak (or bottom if buying) which sounds like what you’re after? It’s always hard to do and even harder if your window is very small each year (when rent agreements are due).
Hope this helps?
Cheers,
EthanEthan Timor | Aligned Finance Pty Ltd
http://www.alignedfinance.com.au/
Email Me | Phone MeActive Investor & Broker; Based in Northern NSW, servicing Australia wide; Author of '34 Proven Ways to Maximise Your Borrowing Power' (download free from our website)
The rent you get from Sydney property is low when compared to what you have to pay to buy the property.From an income viewpoint it is a poor investment compared to quality shares.The saving grace is capital gain,but you can experience a long period of no capital gain after a boom like we have just had.
Hey Parky
you already know which way I feel the market and rates are going, but this may interest you if you haven’t seen it already……make of it what you will.
Interesting that the prediction for Sydney and Melbournew is so wildly different between NAB and SQM. Is SQM statistically analytical only whilst NAB may be a combo of statistics, risk factors, global influence, number of applications?
In other words hard data versus vibe/risk levels???
http://www.abc.net.au/news/2017-01-06/what-will-property-prices-do-in-2017/8165172
Hi Bomberboy,
Interesting link – thanks !! re this :-
Interesting that the prediction for Sydney and Melbourne is so wildly different between NAB and SQM. Is SQM statistically analytical only whilst NAB may be a combo of statistics, risk factors, global influence, number of applications?
I wonder if the major discrepancy might simply come about if NAB perhaps INCLUDED apartments as part of the “overall markets for each city” while SQM didn’t. Now, I don’t know that they have done this – it is pure supposition on my part.
Just a guess as to HOW two respected groups could get wildly differing answers.
Benny
Hi Parky,
If your folks are after cash now, it’s fine to sell – the market is still hot.
I believe your investment in Botany still has good long term potential – near the airport, near the city, detached house, limited land.
In summary, if they’d like some cash now, I would sell. Otherwise, just hold on to it – I reckon you can’t go wrong unless there is some type of catastrophic economic crash (GFC-style) which I believe is unlikely.
Best regards,
Ajay-
This reply was modified 7 years, 8 months ago by
ajayayyar.
Seems like Sydney is still setting records. The neighbours of my parents IP smashed the townhouse’s complex’s record by $150k at auction yesterday selling for $1.45m for the same exact townhouse but better renovated inside. Couldn’t fathom the amount they got for it and now thinking my parents should sell end of this year or maybe end of next year? They definitely want to sell before EOFY 2019.
Thoughts?
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This reply was modified 7 years, 8 months ago by
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