A Blog from 2016 – The Lessons We Can Learn

If you solely relied on statistics you would never buy into the Sydney property market.  We see auction clearance rates for the entire city and the newspapers report Sydney wide prices as one entity.  Boom or Bust, 50% decrease in prices and so on.  However, if you discard Sydney because you are looking at it in a macro light rather than micro light you are missing the point and potentially a great real estate investment too!

Working on the frontline and predominantly in the 15km radius of the CBD I see a different story.  When I work with an investment search I am not always suburb specific.  It is important for me to cast an eye over key suburbs with key benefits as I trawl for a fantastic investment for my clients. I am forever attending auctions and looking for slight changes in suburbs to pick up on the nuances of the market. A couple of years ago when Darlington became the flavour of the month, Glebe was lagging behind so I picked up a great terrace for a client for under a million with this tactic.

Last year a repeat client came back to me as he had some spare cash and wanted to get a better return than the banks were giving.  Taking on a full search, I recommended that we look for either a stock standard property in a banging location in the East such as Elizabeth Bay or a warehouse apartment in a grungy, up and coming area in the Inner West.

I had already bought a cracking house for this client a few years ago in Enmore before it popped and my client was enjoying the delights of that particular purchase with an increasing return and mammoth capital growth.

The first property that had potential was an oversized one-bedder in Darlington, by oversized I mean 82 sqm – if we could get approval it could be easily made into a 2 bedroom unit. Back in 2012 Darlington was under the median house price for Sydney but that had all changed in the panic and boom period and in recent years the median houses have hit around $1,396,000 which is well over the average house price.

Once I started the due diligence process I discovered that one of the other unit’s had tried to put another bedroom in and the other residents were not happy. There was sufficient history in this building to see that perhaps the plans I had for this property were not going to work or maybe  a bit more of a headache than my client wanted to take on. He is a set and forget with no mess, no fuss kind of person so we moved on.

I spotted another Warehouse apartment that had been sitting on the market for some time – it surprised me that it had not sold. When I spoke to the agent about it he told me that he was exhausted and over the campaign,  he said that many buyers had been put off by the negativity in the strata report.  I read through the strata report with a fine toothcomb. Sometimes strata reports can be a lot to get your head around and I have read a lot of them in my time. For someone just starting their property journey, I could see that there a lot of detail to understand or to get stressed about.

There was an ongoing court battle and on first inspection, it looked like a headache too. However, the more research I did, I found out that the current issues were being solved and there was an opportunity to be had.

This apartment has nice high ceilings, 102 sqm of floor space, two bathrooms and parking a lovely vista across the next suburb of Annandale as it was perched on the 4th floor. I managed to get our contract signed with a 66W and cheque and I handed it over to the agent.  I bought it for $890,000 in March of last year.

Recently one had just sold in the building on the lower level for $1,075,000! Which is a record for the building. So it’s all about keeping an eye on certain suburbs and looking for opportunistic buying.