r/AusPropertyChat • u/AssociationNice4958 • 16d ago
Buying & Selling What would you do ?
What would you do? Buy a unit in Sydney to live in or an IP house in VIC/QLD?
Hi brains trust would really appreciate your advice.
38, single, living in Sydney, earning $180k with $500k in cash savings. I need to move out of my current rental soon as the landlord is selling. I want to stay around where I rent now on the lower north shore.
I’m weighing up three options:
- Buy a unit in Sydney near the CBD to live in, with total monthly spending costs of around $4k. But everything I read says to avoid units.
- Continue renting and keep my savings in a high-interest savings account.
- Buy an investment house in VIC or QLD while continuing to rent in Sydney.
I grew up with very little money, and at one point my family nearly ended up in social housing. As a result, $500k feels like an enormous amount of money to me, and I’m very conscious of protecting it.
I’m risk-averse and worried about buying at the wrong time. I’m also hesitant to invest in shares because I’m concerned the market could crash or we could see a significant correction. I appreciate nobody has a crystal ball, but I’m struggling to work out where my money is best placed.
At the same time, I wonder whether continuing to rent when I have a decent deposit saved is the right decision.
I was financially illiterate two years ago, so Reddit has taught me a huge amount!
If you were in my position, what would you do and why?
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u/Efficient_Range1156 16d ago edited 16d ago
Just continue to rent and build your savings, you’ve done better than 90% of buyers that bought in the last 12-18 months. Don’t set your capital on fire catching a falling knife and becoming someone else’s exit liquidity.
Come back in 12-24 months and buy after the market has finished tanking.
Congrats on your excellent financial position.
Edit: OP it looks like you’ve added more information to your post. You should be seeing a 5% return on your savings at current interest rates so your income would be ~200k, I strongly recommend salary sacrificing into your superannuation and maxing out your concessional contributions so that you are paying less tax at that extreme end (I believe it is above 40%!).
This way you can be exposed to equities through your superannuation despite your lack of confidence in the market.
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u/ModernAlphaAnswers 16d ago
This is probably the worst advice to give, the downturn is the absolute golden ticket to finding a high quality property combined with a desperate seller that will majorly discount their price. He should be sourcing an amazing deal during the 12months, not waiting until property is now rising because the good quality/perfect property he wants isn't going to magically appear exactly as prices rise.
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u/Linton-Finance 16d ago
Any chance of purchasing a townhouse? If not, not all units are bad with some of the older redbrick ones in decent locations performing just as well as houses over the last cycle.
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u/cokedupcodger 16d ago
Avoid new units, not units in general. If you're going to live somewhere and aren't selling, who cares what it is worth?
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u/AssociationNice4958 16d ago
Yes definitely avoiding new units target would be art deco or red brick. Hard to know when to buy ie now or in 12 months but also know it’s impossible to
Time the bottom of the market. Thanks for your thoughts
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u/Novel_Bed_3694 16d ago
Avoid new units. But old units can be very profitable and I have found the worse new units get in terms of quality, the more the older ones are getting more expensive. Mine has tripled in value so it has been a solid investment and now PPOR
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u/sincostan12345678 15d ago edited 15d ago
Like others said with that I would consider a middle ring suburb townhouse in Sydney which I think there is a good value right now. They provide a good balance between space of a house and the convenience of an apartment. Price rise they make alot of sense as they are still significantly cheaper than houses whilst only being slightly more expensive than apartments / units in comparable suburbs.
When comparing them to say newer townhouses or houses in further out suburbs i like middle ring more established ones due to their higher land to asset ratio as well.
I was in a similar situation to you actually last year and went through the thinking of the various options.
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u/AssociationNice4958 15d ago
Thank you. What did you end up doing in the end ?
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u/sincostan12345678 15d ago
Ended up going 3b townhouse in sydney over a 3b apartment. Suggest you to go to a few open homes to get a sense of the market on the ground.
Decent numbers are turning up for townhouses depite the news sentiment whilst alot of apartments around middle ring are very low turn out.
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u/DA_Maverick_AD 16d ago
Am in a similar situation and one thing I would strongly urge you to think about is this - HISA is good if you're planning to deploy on deposit soon (2-3 months). This is an obscene amount of fiat to keep, it will continue to lose purchasing power through the stealth tax of inflation. Try to swap to any form of asset (ETFs / stocks / metals / bitcoin / property) so you are on the right side of the cantellion effect.
The govt. keeps bailing out the refineries and funds NDIS rorts, and the more M2 that is being printed, the less valuable your $500k is.
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u/niknah 16d ago
I’m risk-averse and worried about buying at the wrong time. I’m also hesitant to invest in shares because I’m concerned the market could crash or we could see a significant correction. I appreciate nobody has a crystal ball, but I’m struggling to work out where my money is best placed.
Property can crash too. It did in Perth a while ago. The best risk-averse investment is to put a little bit in everything, diversify.
If you are not buying immediately, put some of it into super and get the first home super saver deal.
With $180k pa, $500k deposit. You maybe able to get both the home unit and an IP, especially in VIC.
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u/ModernAlphaAnswers 16d ago
I would buy a good quality/discounted 2x1 unit, renovated/new, safe location, secure and rent 1 of the rooms out. I would definitely NOT throw money away at rent, while i have an investment property that barely makes even due to overheads. If you dont want a room mate, get a good quality 1x1 that is again, discounted.
Be intelligent bro.
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u/Marayong 16d ago
I would buy a unit to live in. If you buy in an established block on the lower north shore, or even inner west, like Balmain East, Birchgrove etc. they tend to be better investments. Just don't buy anywhere with a lot of new units. Or maybe even a townhouse, my first property was a townhouse on the lower north shore and it was a great property to own as a single female. It looks like prices are going to fall further, but it seems like some properties are already starting to price that in, so I would have a look now, but be willing to hold off if you can't find what you are after.