The Sydney property market is the most expensive in Australia. In 2014, Sydney’s median housing price was at $654,000. Today, the median price for Sydney houses for sale is at $807,500. Yet, despite the 19.4% increase demand for Sydney property remains high. Given its high prices, Australia’s modest economic gains and concerns on the direction of monetary policy in 2017, finding the best real estate property in Sydney can be a daunting task.
All of these make investing in Sydney an enticing but difficult decision. There are things you need to know before taking the next step. Here are 10 tips for choosing the best property in Sydney.
- Hire a Buyer’s Agent in Sydney
Purchasing a home in Sydney is not going to be easy especially with limited supply and property prices on the rise.
An auction presents a wonderful opportunity to buy a home that will fall within your budget. But this is not a simple matter of submitting the highest bid. You need experience and the ability to read and counter the strategy of other attendees.
Your best bet would be to hire Buyer’s Agent in Sydney. A Buyer’s Agent has seen and participated in many auctions. The most experienced ones can help you navigate successfully through all the frenetic activity that happens in an auction.
A Buyer’s Agent will be worth getting the best price for the property you want.
- What are your looking for in a home and neighborhood?
With limited options, you have to list down the qualities and features you want in a home and neighborhood.
This will help narrow down the search for your Buyer’s Agent. The challenge for you would be to reconcile your interests as a homeowner and as an investor.
There may be homes with three bedrooms, three toilet and baths, a garage for two cars and a manicured garden but are located quite a distance from schools, the commercial center and public transportation.
- Establish your budget
Your Buyer’s Agent will be able to streamline your search parameters once you have firmed up the budget.
You will have a more realistic picture on which areas in Sydney would have property that would meet your expectations and budget. With such a high demand for property, your Buyer’s agent will need to identify the prospective areas for you to consider.
This is especially true if your budget is limited. Keep in mind that the housing median price of housing purchased by foreigners is 25% higher than the current median housing price in Sydney.
- Determine Your Financing Plan
A study by Demographia International Housing Affordability Survey revealed that based on house to income ratios, Sydney houses for sale are “severely unaffordable”.
You may have to consider getting a mortgage from a bank to bridge finance the property you want. Even though housing loans are holding steady, you should consider hiring the services of a mortgage broker.
A mortgage broker can help you save time by giving you a summary of the most attractive lending rates in the market. He can prepare your documentation and liaise with the lending banks on your behalf.
Mortgage brokers have developed a solid relationship with many banks and can help you find the best home loan arrangement to meet your budget.
- Know Your Taxes
Buying property in Sydney entails other costs and taxes.
- Stamp Duty. This is the tax that is payable by the Buyer after purchasing the property. It becomes due three months after contracts have been signed and exchanged. In New South Wales, stamp duty is calculated at 4.7% of the purchase price.
- Land Tax. If you are planning to lease your property and its purchase price exceeds $3 Million, you are liable to pay for premium property duty.
- Hire Consultants
In addition to your Buyer’s Agent and Mortgage Broker, you should consider hiring the following consultants:
- Lawyer – To review contracts and agreements.
- Engineer, Architect – To assess general condition of the property.
- Interior Designer – To determine the costs of repair if needed.
- Insurance Agent – To advice on required insurance payments.
- Conduct Thorough Research
Despite the rise in Sydney property prices there are suburbs that have fallen behind city’s the growth trajectory.
These have underperformed compared to other areas but still offer tremendous growth opportunities. Best of all, these areas will fall within or even below your budget.
Areas such as Doonside have a median value of $441,500; way below the median price of Sydney but had a respectable 21.56% Capital Growth Rate and a good rental yield of 5.48% per annum.
- Check for Development Applications
Ask your Buyer’s Agent to do some extra legwork. She could check with the local council if there are pending development applications in the area you are looking to invest in.
That beachfront view will not have any redeemable value if a commercial high rise will obstruct if from plain sight.
- Come Up with a Shortlist of Choices
Once you and your Buyer’s Agent have garnished your list of prospective properties, it would be time to shift your focus to fine-tuning your choices.
Take the time to visit these properties with your broker during the day time or at certain hours to firm up the criteria. Bring your engineer, architect or interior designer along so you can have their perspectives on each property.
10.Trust Your Gut Feel
In the end, your final choice may come down to whichever property “feels like home”.
If you have children, make it a family decision. For sure everyone has an idea of what makes a home perfect. The most expensive home is not always the best home on the market.
Eventually, you will have to make a choice on which property makes you feel the most welcome and offers the best conveniences. This will not require facts, figures and studies.
It’s called trusting your intuition that you have found home.
Its strong economic fundamentals make Sydney’s property market a stable investment. Sydney has been included among the top ten cities that have successfully integrity into the global economy and is ranked 11th in the Global Economic Power Index.
Sydney has a young population with independent youth comprising 54.5% of the population and the elderly only at 8.5%. It houses many tourist and historical landmarks such as the Sydney Opera House, Sydney Harbour, Botanic Gardens and Harbour Bridge. The University of Sydney is one of the top 100 universities in the world at #37.
From the outset, an investment in Sydney property market seems guaranteed. But as we know there are no such things as guaranteed investments. You still have to take precaution and analyse your investment decision from several fronts.