Sometimes in property investment you need to abandon your prejudices to keep expanding your portfolio, as Julian Lancey discovered when he was priced out of his preferred market.
“I’ll admit it from the get-go: I'm a northern beaches boy through and through.
I grew up there and I've purchased several investment properties there, as well as in the Sydney CBD.
I've never really known much about Sydney’s western suburbs, other than the nasty stereotypes that get perpetuated, but when prices began to skyrocket a few years ago, I was forced to reassess that.
I wanted to expand my portfolio, but prices in the inner-suburbs and the northern beaches were getting beyond my reach.
Even in suburbs like Marrickville, which had represented good buying for so long, prices had gone nuts.
Trying to put aside my prejudices, I ended up having to venture out toward Parramatta and the Hills District to make my next purchase.
In hindsight, it was the best investment decision I could have made. I was still able to get in at a relatively low price point and the place has experienced the highest price growth of all my properties.
That’s the thing about Sydney. The eastern suburbs and the north shore can’t experience much more growth, it’s as though they've almost reached capacity – both in terms of population and price increase.
Sure, a property might grow a couple of hundred thousand dollars in a few years, but when you needed a couple of million to purchase it in the first place you know that proportionally it doesn't stack up.
The western suburbs are now fielding the most demand of all Sydney suburbs, both in terms of tenants and buyers. Everybody wants to live there now, it’s got the extra demand from people who already live there, but also everybody from the north shore and the eastern suburbs who have been forced out of those markets want to live there now.
What’s more, the west has become cool. Just the other day I went out to Cabramatta. The only things I’d ever heard about the suburb were to do with the 1980s heroine trade and gangs, but it was really hard to reconcile that with the suburb that I witnessed.
Walking down Parramatta’s streets, you’d think you’re in the Sydney CBD. There are professional couples everywhere, and cafes and restaurants line the streets. It’s visually obvious how much wealth has been generated into the area in recent years.
From a long-term perspective, the west is the destination for the majority of infrastructure projects both public and private.
Nobody can argue that the roads and transport have improved in recent times. Just the other morning, at peak hour, I drove from The Hills to the lower north shore in the same time that it takes me to get from the Manly area to the lower north shore.
From the west there is a four-lane highway, which includes a bus and bike-only lane, and there are new train lines being built. I averaged about 90km an hour.
From Manly I crawl along at 2km an hour through 50 traffic lights and a transit lane that doesn't work. When one man on a bike is holding up 'busloads' of commuters you know something is wrong. That's at least twice the distance in the same time.
With prices in the west skyrocketing, it looks like I abandoned my prejudices just in time. It just goes to show that no-one can afford to be a snob when it comes to property investment.”