If you were lucky enough to have bought property in Sydney around 2013 then you will certainly be giving yourselves a massive pat on the back. That is exactly what buyers from iBuyNew are doing.
According to new Domain Group data, house prices are up by a whopping 65 per cent in the four years to September 2016, whilst apartments have risen by 44 per cent. This exceptional growth is mainly down to off the plan apartments.
The beauty of buying an apartment off the plan is due to the longer settlement times. Apartment developments can take approximately one or two years to build, depending on the size. This longer timeframe allows property owners to benefit from capital growth and make significant sums of money in just a short space of time with a 10 per cent or even 5 per cent deposit.
One of the main contributors to this significant level of growth is due to the Sydney property market being mainly investor driven. More than 60 per cent of buyers were investors who were attracted to this property type due to strong rental returns and high depreciation.
One iBuyNew buyer, Ethan managed to secure an apartment in St Marys, in Western Sydney in 2013. He paid just $312,000 for it which was under the median price and it settled at the end of 2014.
Once completed Ethan lived in the property for six months as a first home buyer to avoid stamp duty and then turned the apartment into an investment property and started to collect rent.
In November 2016, he sold his property for $420,000, collecting $108,000 more than what he bought for it just three years ago.
According to Mark Mendel, CEO of iBuyNew, “those who bought three or more years ago were bucking the trend as it was a tough period when others were reluctant to buy anything.”
“They were buying from developers who needed sales and were discounting properties and providing incentives to buyers”, said Mendel.
100 per cent of iBuyNew clients who bought property off the plan during this time have made money, usually at least $100,000. Key areas where clients bought include St Marys, Campbelltown, Liverpool, Botany and Arncliffe.
However, if you are thinking about buying property in Sydney now then it’s a very different market. Firstly, the Sydney property market is a lot more expensive than what it was three years ago. Some developers are asking way too much for their apartments, due to having paid premium prices for their development sites.
Banks are also not funding in certain areas and buyers in Sydney are unlikely to see the same amount of growth over the next two to six years.
As an investor, now is the time to look at other markets such as Brisbane where property prices here are far more affordable. Buying before Christmas could also see you benefiting from incentives such as free stamp duty or 5% deposits as developers seek to secure deals before the holiday season starts.
To learn more about where the next best property hot spots are and where you too could enjoy strong capital growth, we recommend speaking to one of our Property Consultants at iBuyNew.
Call us today on 1300 123 463
to find out more about how you could experience strong capital growth through buying property off the plan.
View the original article published on domain here: 'The sellers who ‘won the powerball’ in Sydney’s property boom’
Published on 13th of December 2016 by Marty Stanowich