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¿ WHERE TO BUY?
So now that you’ve decided to buy at the
height of a boom, where should you look?
Harvey believes the inner west is still
going crazy. Those who have missed the
inner ring should now look in the outer
ring of inner west Sydney, he says. The
areas include Summer Hill, Petersham,
Ashfield and out towards Strathfield.
“Even though it has jumped we still
think it’s good value because of the lower
price point,” he says.
He adds further west, buyers can still
purchase a property for around $350,000
to $400,000 and put a granny flat in the
backyard for another $100,000. It will give
them a combined rental yield of seven
per cent. Who says Sydney property is
unaffordable with those sort of figures?
The northern beaches were lacklustre
for a few years but now that area is
really picking up. Harvey has seen the
more forgotten suburbs like Barraweena
and Cromer start to improve. He says
the upper north shore is good for those
looking for houses close to good schools.
Some middle ring suburbs such as Lailor
Park and Seven Hills are also quite strong
and reasonably affordable. Newcastle is a
great alternative and the Sutherland Shire
is also kicking along.
Despite high prices, he believes the risk
of paying too much today is limited.
“Investors are competing at auction
with homebuyers. They’re the ones that
will drive values further. Investors have a
limit on what they can spend, based on
But if your heart is really set on
something closer to the CBD, look for
something with renovation potential.
“It’s about looking at the value of a
property in today’s market,” Harvey says.
“You can do an extension on a house or
if it’s an apartment, you can knock out a
wall. Look at the potential upside value.”
In the nick of time
When it comes to investing, enthusiastic
and determined property lawyer Bruno
Confalone talks the talk and walks the
walk. The 27-year-old capital growth
chaser was featured in API magazine last
October after already accumulating four
properties in Adelaide.
At the time, he was hoping to build
his portfolio by purchasing in Sydney or
Bruno certainly wasn’t prepared to waste
time. The bricks and mortar lover has just
purchased his fifth investment property,
this time in the Sydney blue-chip eastern
suburb of Vaucluse.
Despite buying in the midst of an
incredible boom, Bruno is confident
it’s not too late for Sydney, especially
considering he’s taking a long-
“I think if you can find a good deal and
it suits your requirements, then it’s never
the wrong time,” he says.
“It depends how long you hold or
whether you want to make a quick sale,
and is therefore dependent upon your
goals. For me, it’s a long-term hold in a
sought-after location in a prime city. I
think it’s a good purchase.”
Like most properties in Sydney at
the moment, the two-bedroom, three-
bathroom apartment with undercover
parking was listed for auction. The agent
was taking offers beforehand and Bruno
knew someone had offered $800,000.
He trumped that offer by $10,000 and
secured the $810,000 deal with the help of
a buyers’ agent.
“I used a buyers’ agent for a number of
reasons. The Sydney market is going a
bit crazy so it can be very hard to get in,
particularly if you don’t live there.”
The property is in a small complex of
six and also has a large balcony. Bruno
quickly found a tenant, who is paying $750
per week. However, the body corporate
fees are quite expensive, at about $1500
per quarter. It’s a lot more than the body
corporate fees he pays in Adelaide, which
are about $350 per quarter, but Bruno
says this seems to be the standard rate
He’s also happy to pay the extra cash,
knowing there’s a good chance the
capital growth will outweigh the holding
“I think there’s still a lot of potential for
growth and a lot of indicators that it’s not
Name: Bruno Confalone
Strategy: Buy and hold
¿ USE YOUR HEAD, NOT HEART
John Lindeman of Property Power
Partners has a different point of view. He
says Sydney is peaking and the mad rush
simply won’t last. In fact, he’s warning
buyers to think twice and use their head,
not their heart.
“I would stay right away from it,”
“I think a lot of areas will suffer price
falls, where investors have been most
active. That’s in the unit market.”
He adds investors need to watch the
number of listings on the market and
compare it to the number of sales (see
the back of API for listings and sales on
“As long as the number of sales are
increasing at the same rate as the number
of listings, that’s okay,” he says.
“When listings start to increase more,
you’ve got a problem.”
He believes this is already starting
slowing down, although there was big
growth last year,” Bruno says.
“There are still some good buys, you
just need to be able to find them.”
Bruno is currently living in Canberra
and while he might have been able to
purchase in the nation’s capital with
less competition, he thinks the market
there is far too flat to worry about at the
moment. Despite the possibility Sydney
prices could retract, Bruno still nabbed a
good deal in a hot market.
He advises anyone hoping to buy in
Sydney to obtain pre-approved finance
and be ready to pounce when good deals
come onto the market. He used equity
from his property in Athelstone, South
Australia, to refinance and put down a 10
per cent deposit for the Vaucluse pad. It
meant he had to pay lenders’ mortgage
insurance (LMI) for the first time, but he
believes it’s money well spent.
“I saw the benefits of being able to
use LMI. It was $12,000 but it made
sense and it’s a tax deduction anyway. I
got it for a really good price, judging by
comparable sales. It’s unique with three
bathrooms and it’s so close to Bondi,
Doyles (restaurant) and Watsons Bay.”
æIf you can find a
good deal and it suits
then it’s never the
THE STATES // NSW
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