Top places to buy in Sydney 2020

With home buyers waiting to see how COVID-19 will impact the Sydney property market, we asked Vice President of the Real Estate Institute of New South Wales, Peter Matthews, to share his thoughts.

Peter reveals that although home opens and auctions have slowed down due to social distancing restrictions, the Sydney market has remained stable. And with restrictions slowly easing, Peter encourages buyers who’re in a secure financial situation to continue looking for their first or next property.

Here are Peter’s top suburbs for 2020 and some tips for first home buyers.

Top picks to buy in Sydney for 2020

Inner West

“Markets like Marrickville, Tempe and Sydenham are all in high demand, and are very much underrated.”

Peter explains that since they’re close to the extremely popular Camperdown, Newton, Erskineville and Annandale, “It’s better for buyers to gravitate towards these areas early and to get in before the prices really start to move”.

Lower North Shore

“There’s some good value in the newer parts and some of the refurbed buildings,” says Peter. “And the Wollstonecraft and Waverton markets have established properties and great infrastructure, including rail links.”

“As for Crows Nest, new transport options and great amenities might take it to a whole new platform price-wise in the future."

Eastern Suburbs

Peter encourages buyers to turn their attention to Darlinghurst and Woolloomooloo markets.

“They’re good value for money and are operating off the back of really strong markets like Paddington and Woollahra, but really they’re some of the key driving markets in the eastern suburbs."

Tips for first home buyers

It’s all about confidence

Peter explains buyers shouldn’t be afraid to make an offer early – it can work in their favour and remove uncertainty for the seller. He continues to say that in a market where sellers don’t really want to negotiate, it’s best to get in early to secure the property you want.

See our tips for making an offer.

Start small

A lot of first home buyers will try to borrow as much as they can and jump into a higher value home straight away.

Peter recommends considering a stepping stone property instead – an apartment or a place that’s not necessarily your dream home – and saving up enough money to buy a higher value home after that.

One of the main benefits of starting smaller as a first home buyer in Sydney is the possibility of stamp duty exemptions or concessions from the government if the property is under a certain amount – be sure to check the state government’s housing website for the latest info.

Be prepared for the unexpected

Starting small could also help ensure you have financial flexibility if things change and you need to move.

“If you sell your house within three to five years, you may remove any uplift in value due to costs like stamp duty and selling agent fees,” says Peter. “I’d suggest deciding what to pay for the property based on that.”

“Some buyers assume that if x suburb grew by 10% last year, it’ll keep growing at that rate. I’d instead assume very modest or no growth and ask myself if I could afford to sell the property in two years if I pay down x amount.”

Repay at a rate of 2% more

Peter recommends that you borrow assuming you’re paying at an interest rate of 2% more than the rate you applied for. Then, repay at that rate to help pay off your mortgage sooner.

“If the market changes or stays flat for a long time and you need to move, you’ve created equity instead of burned it. If the market does rise, that’s a bonus. You’ll be double dipping because you’ve been really strong with your repayment strategy.”

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The information contained in this article is of a general nature and is not intended to be nor should it be considered as professional advice. You should not act on the basis of anything contained in this article without first obtaining specific professional advice. Also to the extent permitted by law, Bankwest, a division of Commonwealth Bank of Australia ABN 48 123 123 124 AFSL / Australian credit licence 234945, its related bodies corporate, employees and contractors accept no liability or responsibility to any persons for any loss which may be incurred or suffered as a result of acting on or refraining from acting as a result of anything contained in this article.