[2019/2020] Is Now The Time To Buy Around Badgery’s Creek?
🔥The New Airport Coming to Badgery’s Creek. Is Now The Time To Buy An Investment Property In Western Sydney? 🔥
The surprising answer revealed here (Hint: Stay until the end to work out what sort of property you should be buying)
Over the last few months as I’ve been helping people find properties in great growth locations where the property is really easy to get rented and where the rent covers the mortgage a common question I’ve been getting is,
“Niro, we know the new airport is coming in Sydney. Is now a good time to be buying around the airport in Western Sydney?”
And that’s really what I want to clarify in this video because one thing is for certain eventually prices around Badgery’s Creek and around the airport, prices will rise.
However, remember construction on the airport is only due to complete in 2026. That’s 7 years from when I’m recording this video alright?
So the question is, is now a time to buy?
Is now a good time to be buying around Western Sydney, around that second airport?
Well, let’s look at a few suburbs just to give you some data before I give you my rationale about what you should be doing.
Let’s say for example a suburb like Leppington. The vacancy right now is 5%. Now if you’ve seen any of my past videos you know that I look at areas where we look for what I call the magic of 3 percent.
In other words I want to only invest in areas where there’s a vacancy rate of 3% or less which means that then you’re buying in a market that’s undersupplied or translation, there are more potential tenants looking for properties than properties available for rent.
That’s the kind of market you want to be buying in. So when you buy in a market with a vacancy rate of 5 percent, that means it’s oversupplied. That means there are more properties available for rent than potential tenants looking for properties which means you’re going to struggle to get your property rented.
You may even have to drop the rent in order to get a tenant and more than likely, the rent isn’t going to come anywhere near covering the mortgage.
Also prices in Leppington have dropped according to Realestate.com.au Since their peak in December 2018 they’ve dropped $130,000.
What about another area like St. Mary’s?
Currently the vacancy rate thankfully has dropped back to about 3 percent. So it’s gone from being an oversupplied market to now being somewhat of a balanced market but prices again have dropped since their peak in December 2017 by about $67,000.
And a 3rd suburb to look at randomly say Ingleburn near Campbelltown. The vacancy right now is well over 3 percent cent so it’s an oversupplied market and prices have dropped $50,000 since their peak in December 2018.
So what does all this tell you?
Well what it tells you is that although yes we have a lot of infrastructure coming as a result of Badgerys Creek airport…
Right now may not be the time to buy around that area if you’re someone who wants to find a property where it’s easy to get the property rented, where the rent covers the mortgage because it’s highly likely that will not happen.
However Western Sydney and around Badgerys Creek should be an area that should be on your watch list.
What you want to see is that prices stop dropping as they are continuing to do in many areas around there. Instead, you want to see them going flat and you want to see a bit of an upturn. You want to see prices start to rise because unless you have a working crystal ball, nobody can really pick the bottom of the market right? Least of all myself.
So I want to see prices come off their bottom because what always worries me is when people say, “Now is the bottom of the market.”
I’m like, “How do you know?” I mean none of us know.
What’s going to stop prices dropping further?
So what you want to see is prices really go flat for a while and a bit of an upturn in prices, around about an 8 to 10 per cent increase in prices. Then you know that’s a good time to buy for future capital growth because you’re buying in a growing market not a flat market, number one.
Number 2, what you also want to see is that the rental vacancy really tightens up to be well under 3 per cent preferably around 2 per cent which means then that you know that the properties will be more than likely, be fairly easy to get rented and then you also need to do your cash flow numbers to see, well what’s the rental income on a particular property that you’re looking at around Badgery’s Creek and will the rent cover the mortgage?
Now having said that, there are people who are currently buying in and around Badgerys Creek who I believe will make money. Why? Because their strategy is different. They’re not interested in rental income. They’re land banking. They’ve got access to some serious cash. They can buy large amounts of land or they can buy older properties on bigger blocks and they’re just going to hold it and wait and they’re not interested in rental income.
They’re not interested in anything of that nature. They’re playing a longer game because they have surplus cash flow every month from their incomes or their businesses. So therefore they can afford to wait.
If that’s you, if you can afford to wait several years for growth, if you can afford to hold properties without the rents covering the mortgage, then maybe Badgery’s Creek could be something for you to look at.
But for most people looking to invest, that probably isn’t the market that you want to be looking at, especially if you’re serious about building a portfolio. Why? Because you want to be buying properties where, as I said a few times already, the rent comes close to covering the mortgage so your cash flow isn’t impacted.
You want to be buying in markets that are growing right now so you can get capital growth, so you can build your equity so that if you do decide to buy in Badgerys Creek in the future you’re in a much better position.
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September 17, 2020
September 8, 2020