Self Managed Super Fund Australia:2026 Rules

Parag Dixit

Hi Julius, how are you?

Julius

I'm good.

Parag Dixit

Going well, going well. Thank you very much. Thanks for joining in.

Julius

Thank you so much. Thanks for inviting.

Parag Dixit

Yeah, no, good, good, good to see you back. We are commencing our third part of the series where we're talking about Sydney and its suburbs, and we we discussed till now about what's what are the factors which are really making Sydney go well, or which are making some part of Sydney go softer? Which what are the factors which really people keep in mind, whether they're buying as an owner-occupied property or investment property? We've discussed the top five locations or the best five locations. Which, if you're looking contemplating to buy right now, you can have a look at them and what are the reasons for them? Why they are growing in capital value? But today, we are taking a topic which which may not you may not like it, but it's nevertheless we have to talk about it. We're talking about why what five suburbs which you may kind of avoid buying right now. You know, people who obviously people live there. There are tenants who stay there? They are spending a lot of money on rents out there. But these are not bad locations. Okay, don't don't worry. There's some of them are really nice, and some of them are good leafy. And if you want to, if you drive down there, you will say, "Wow, this is nice. But they have their reasons. They're not bad. They're not going to be bad forever. But we are identifying those suburbs where we believe that you need to be a bit extra cautious when you're investing there, you may not make money capital growth in the short term or maybe even in the medium term. From an investment, from a liquidity and a capital growth standpoint, buying here will kind of lock in your money for a longer period of time with not getting commensurate return for it, and you have much better options in the other suburbs where you can go and buy and get an investment and make more money out of it. And that's why we analyzed so many, most of, in fact, all of the suburbs in Sydney. Our data guys sat down, understood what's happening there. We looked beyond the median prices. We looked beyond the vacancy rates. We looked the infra. We looked at the infra, the demand, supply, long-term growth, investors. How how much investors are concentrated there? Future supplies and affordabilities, and so much so. So we've understood, and that's always a theme which we've seen, whether we've discussed Melbourne, we've discussed Sydney. That cheap property isn't always the best property. A popular suburb is not always the best suburb, and that's why we are today, me and Julius, we are looking to dive in and see which are the ones which you can avoid in Sydney, right? Yeah. Yeah. All right. Okay. Let's let's get in, okay?

Parag Dixit

First one, first of the chopping block. Ogdale. Oakdale. Yeah. Oakdale. Okay. All right. Yeah. I know. Oakdale is is good. That's that's in the southwest. This is a semi-rural kind of a suburb in the Walanglish Shire, about I think about 8090 kilometers when you come from where you are in Sydney CBD, it's pretty far off, and it's it's okay. It's it's very nice. It's nice. It's tree lined and it's good. And you, if you are a buyer, you will say, okay, multi-acre blocks. You don't get that in Sydney. Do you really get that stuff in Sydney? But the problem is extreme distance. You know, 80 kilometers if you are there from CBD. And we'll talk. There's not not much of transport available, public transport available. So, 80 kilometers, and then you've got huge ball ratings out there. You've got issues of that, which which creates an issue, which which creates a problem, which, but not too many people would be interested in that because your insurance premiums skyrocket, and once you get into that kind of a loop, it's it's a tough one to be able to get it to right.

Julius

Yeah, that's right. So it's kind of lifestyle suburb where when any investor look for those kind of suburb, the actual conception is basically okay. I would hold a bigger land. Sometimes I'll subdivide and sell, but the market reality is different. So current median house prices are very close to a million dollar or 1.1 million ish in between that. We will not find more units there. That's why there is no unit scores and yields are subdued around 2.5 to 3.5% So it's very low yielding suburb. Vacancies depends on the transaction rate because they are not like normal houses with the small blocks. They are like a lifestyle like riches sometimes, so vacancies change a lot when according to the sales volume. When I say the days on market, which is a liquidity score, which is will be on between 45 to 65 days. So price growth is too much dependent on what kind of property is there, whether that property has lot of appeal. What kind of buyer? Lot of emotional buying, so it's not always dependent on the property type. It depends on okay, the emotions as well as what kind of property, where it is located, how it is built, how the land is, how tranquility, core is, and all the stuff.

Parag Dixit

Yeah, absolutely right. And when you are looking at such kind of area. You you will always want to do some kind of an analysis of how that area is right.

Julius

Correct, correct. So when we when we do the analysis, we look for okay, is there any bushfire zones or flood zones? What are the insurance cost? Then what are the council rates? In these cases, in this above, what we have seen is the bushfire rating is extremely higher because it's very close to the national park. Yeah, yeah. So it has highest bar rating, and lot of properties are part of the APZ, which is a central section zone. Yeah, yeah. That means you knock down that home, and you can't build on the same place.

Parag Dixit

Oh yeah, you may you may get stuck in building on the same. Yes, correct.

Julius

Or if you want to build something, or if you want to do some extension, or you want to put some granny flats and all, it because of the flames and the construction cost is doubled.

Julius

your insurance is extremely higher, plus the council rates as well.

Parag Dixit

Yeah, correct. And I suppose I think even there's no CVH line out there, and that's one of the risks when you look at look at this location, and when you look at say Oakdale and say, okay, do I want to stay there? What kind of risks will I be having to see when I'm looking at staying in this area now, bail rating is a big red flag for me. I think when I see the bail ratings and I say, okay, if I have to modify my house, if I have to knock down, rebuild my house, I'm going to get into trouble. If I want to create a granny, I'm going to get into trouble. If I'm going to, you know, build a duplex or whatever I want to do addition to the existing dwelling, I may get into trouble, or my insurance costs are going to go up like crazy. And then, if I have to compound it with by saying that if I'm going to drive into the city, if I'm working in the city, God forbid, I have to have to go 80 kilometers. I'm talking one, one and a half hours, two hours. No public transport available, only private cars. So I have to drive down to one of the nearby railway stations, and then park my car, and then take the train, and then go to the city, and then come back and do this. Maybe I spend hour and a half one side if I am going to the city for for employment or for my business if I am there. So it it makes it tough, and that's that's this kind of tough things are also people can see through that, and then you will find that not too many buyers would be there, and then you'll be you're only and only concentrating on some buyers who want to go into the niche market and say, okay, I want to live in this area because I do my stuff around that area, and it's pretty niche, and it's not too many people. So your price ranges are not going to be great. And again, obviously, if you have all of these issues, you can't subdivide. You can't do all that, right? But despite all this, obviously there is a sales which is happening, right, Julius? Now, if I were to say that we've seen that this is an issue there in Oakdale. Now, why why are people still buying there?

Julius

So there's a lot of emotional connect. So there are a lot of people who still want to upgrade themselves into the lifestyle blocks where you have houses, sheds, big lot sizes. Yeah. So those type of buyers are emotional buyers already there, and if they missed out from Camden or Copperty, then then they try to go into the suburb and try to get the properties.

Parag Dixit

But I I like my rural lifestyle, and I've always enjoyed that lifestyle. Maybe that's the kind of person who I would be, and I'll say, okay, I'll go and buy there. But if I'm not that kind of a person, I think I will think twice before I buy there. If I'm a first home buyer, and if I if if isolation or travel times gives me a headache, then this is not the suburb for me because, and that will be a lot of guys because as a first home buyer, you want to live your life. You want to go stuff here and there. You will you will find that you will want to go to maybe you find employments in the city, you find employments in other employment suburbs, and then they are quite far off. So it's not something which is there for me. As an investor, I suppose it also makes a bit of a stress on me because there's so much of capital outlay which I have to do. My cash flow is going to get impacted tremendously on on what I'm doing. Or or as a tenant, I would be paying so much on the rent, and my net rent as a landlord is going to be too low. So it's a bit of a tough one on both the sides. Whether I'm an owner occupier or an investor, it really doesn't come within my palate. It doesn't come within what I would want to choose, and that's where we we find that people would people should and would maybe think about avoiding the suburb altogether. But if they were to avoid choice, now let me come back to you on this question. If they were to avoid, and if are these if this location has to be avoided. Where would you invest instead of this?

Julius

I would invest in Tecton. You'll have a similar lifestyle nearby suburbs, but in those suburbs, you have access to Southern Highland Railaxes. Also, they have established town centers and then a stronger owner-occupier appeal.

Parag Dixit

Absolutely right. So okay. So so if you if you were to buy a property instead of buying a property in this in Oakdale, and you were to buy in the areas which your Tamura picked in, what kind of a property do you think suits you?

Julius

So it would be because there are a lot of options available in freestanding houses near to the rail corridor.

Parag Dixit

Yeah, yeah.

Julius

Where the property prices are in the similar price height with around 700 to 800 square meter lot.

Parag Dixit

Yeah,

Julius

nice four bedroom, two bathroom houses. Rental wise, a bit better.

Parag Dixit

Yeah,

Julius

but still you have all the connectivity. So all the connectivity. Yeah, good block size with the good house.

Parag Dixit

Yeah, so this is a typical suburb where we are seeing that okay, even though there are larger blocks available, but because the appeal is so low to people, and the costs of holding that property is so high, the the the suburb doesn't get it doesn't fit into any of the parameters of either an owner occupier or a first home buyer or an investor or an upgrader or a downsizer. So it's kind of a suburb which is which is right at the border of the national park. So just after that, the national park starts off. So you you you kind of get the best of the environment, but the worst of everything which requires for for living in there, and that makes it a tough one to be able to buy. Okay, let's see. Let's see. Do we want to jump into the second suburb? Which one you you say we should pick up the second? All right. Yeah, correct. City of Fairfield. That's I think that's around the Fairfield LGA. About about 30 kilometers, right? So that's that's not too far. That's not 80. That's about 30 kilometers or bang in the middle of stuff where you would say, okay, this is a nice suburb. This this this is just there. 3030 kilometers is not too much from CDCBD. But when you look at this, you think it's an undervalued gem kind of a sub. It's a hidden property which I found, okay, which nobody else has found, and it's it's so good. But the biggest issue is it sits in the Prospect Creek floodplains, yeah, and that brings a lot of flood risks and crazy insurances and developments and all of that get restricted. So when people would buy and they get caught out, if you really if you not research to that suburb and if you started thinking, okay, I would want to buy in that suburb and you I should go there and I should be able to get a good property, then you get caught out. And when you get caught out, you don't understand. Okay, the market reality did not fit with what I wanted to buy. Yes,

Julius

correct. So, if I look at the numbers, current median prices are close to one to 1.1 million. Yeah, and then they have a lot of units as well. There is availability of units. All right. So units are very close to $410,000, but yields are very bad. 2.8% on million dollar, that's a lot. That's a lot of negative, and then vacancies are very close to 1.5 to 2% In Sydney, in most of the suburb, we see the vacancies are below 1% or up to 1% Yeah, in between 1.5 to 2% is higher for Sydney. By the way, it's

Parag Dixit

pretty high for pretty high for

Julius

Sydney. Yeah, days on market, the liquidity is in between 35 to 50 days depends on the property type, and units are taking more than three to four months to sell.

Parag Dixit

That's that's okay. That's bad. Yeah, that's bad. That's that's a lot. That's a lot. Yeah, it it really impacts you if you takes you three four months to sell property.

Julius

Yes, and then when you look at the capital growth perspective, when looking at the neighboring suburb, or if you look at the Ripple as well, neighborhood has more capital growth perspective than this suburb. All

Parag Dixit

right, okay, okay. So if if I were to say that I, if I were to want to say, okay, I would want to analyze how it's performing, and is is this a suburb which is going well, or is it suburb which is going average? What is or poor?

Julius

Performing suburb. So basically, if you look at the yields perspective, it's below 3% So rental wise, very very difficult to hold. Number two is basically when you buy property, when you when you buy an asset, you have a strategies that attached to it. Like you buy a good house with the smaller lands that has capital growth because of the certain reason. When you buy a property with the larger land piece, and if it is older house, then strategy would be either you subdivide, put granny, or you manufacture money from the land itself. Yeah. In this section, the biggest issue is the restriction from the councils. So you have a flood zones. So you, most of your applications for the subdivision, the development get rejected by council itself.

Parag Dixit

Oh, oh, that's that's that's that's a tough one because if council is rejecting your applications, I I know of delays, but rejection is like there's a lot of rejections. Yes,

Julius

there are a lot of rejections.

Parag Dixit

Yeah, yeah, and that that's a big risk because when you are when you are buying in an area like this, and you say, okay, I find that this area has a lot of flood risk because obviously it's we've spoken it's the Prospect Creek, and so this many low-lying residential streets are there. So water flow would be there. So flood zone would be like everywhere, and that causes my insurances to go up. So three times, three times, four times, kind of from a neighboring suburb. That's the kind of cost for insurance out there. Correct. It's bad. And then when you compound it with council restrictions and council rejections, and they don't allow you to do standard like you know house in a granny or something of that sort. It makes it worse. And I think on top of this, one more issue is there in which we've just not spoken about. That's between is fixed between the freight lines. You know, one part of the freight lines in the industrial. Zones and it's it's there where a lot of industrial activity is also happening. So that also brings down the appeal, right? So that's a huge risk for buyers. Okay, I have flood zone. I've got huge insurance cost. Council is not allowing it do stuff, and then I'm in a kind of an industrial area, or maybe just in the fringes of an industrial area with and freight lines, which is maybe cause noises or cause all of that. So that's a that's tough one, right? But again, so the the point there is that we know that these are the tough ones. We know that these are the risks which are there. But still, people buy there. And why do you think people buy there?

Julius

See, it's because of the affordability. So a lot of people were missing out from Candleville and Cabramatta. Yeah, they try to go to that section of the suburb. Second is they still have a direct train line access, t2 t3 network, and then since it's cheap and it's very close to city, like in between 2530 kilometer of Sydney CBD, it's not bad in terms of the reachability. So a lot of interstate buyers are just looking at that 1 million mark and trying to get into the suburb.

Parag Dixit

Oh, that's bad.

Julius

Yeah, that's bad. Without looking at all of this.

Parag Dixit

Without looking at all of this, and when you don't look at all of this, and when you say, okay, some 1 million in Sydney, what can go wrong? Then you get into straight council blockades, which are happening here. So if you are an investor who thinks, okay, I'll develop that block. I'll knock down that house, or I maybe construct a duplex or a house and a granny or something. Boss, you're you're in for trouble. You are in for major trouble, and that's not the way it has to be supposed to be. If I'm a person who is on a tighter budget, I'm a first home buyer on a, or I'm a I'm someone who's buying my first house, and I think that okay, I'm just putting all my money in. I'm going all in to buy a house, which is looking nice here. I'm I'm in bad state because the insurance premium is going to kill me. My cash flow is going to get into trouble, right? And that's not a great scenario. Okay, okay. Back to my favorite question. If not here, where would you buy? I

Julius

would either buy in Fairfield, Smithfield, or Weatherfield Park because of the fact that okay yes they don't have flood zones that is number one number two is yes there is all this area is surrounded by industrial zones but they're not as close as this suburb third thing is over there I've seen personally that there is heaps of subdivisions happening where the cost of land is increasing that is number one and then third thing is there are a lot of development activities around. So rather than buying property in the suburb, I would buy pick up a good flood-free block where I can do subdivision because most of the houses in the Weatherill Park or Fairfield are older. So there is a lot of activities from the developers and the builder that they are actually taking out the old homes, knock it down, subdivide because they have a dense zoning now, and then they're building multi dwellings. So if I if I buy this type of property, then probably in future I still have that kind of opportunities. And yields are not better bad as well because when you look at the last three to four years of growth story, then in Fairfield, Weatherfield Park, I had seen in between around 35 to 40% growth. Yeah, that's why I would buy there.

Parag Dixit

That you would prefer to buy there because there's obviously there is these are much better areas to be able to buy. And what kind of a property would you suppose you will buy? I

Julius

would in these pockets. My my pickup pick would be good land size around seven to eight 600 to 800 square meter land size. Nice three bedroom one bathroom or three bedroom two bathroom brick home where I can get around three and a half to 4% Yeah, that's it. Yeah, yeah.

Parag Dixit

Instead of buying a property there, it's much better there. Even if I have to pay a bit more, but it's going to be long and safer property and much better growing property, much better capital growth property, maybe much better rental yields as well, and that will tick more boxes rather than this one. If I were to choose an option, okay. Let's jump into this. We've seen the flare of a flood zone in in Sydney, and that's that's a and this is a severe one. So bushfire zone one, flood zone second one, which was the third sub above, which you will say Wilmont. All right, now straight back up into the outer northwest, I suppose, and that's around the Blacktown LGA. And if I were to be so, it's it's about it's about in between both of these two suburbs, which we've spoken about. It's about 50 kilometer, not in between, but in terms of distance, about 50-ish kilometers away when you're looking at if you're coming off from the CBD. But you know the most interesting point about Wilmont, and if anybody would kind of try and see, Wilmont is is I think one of the cheapest entry point suburbs in in Sydney market for a about 505, 5600, kind of a plus maybe more than that kind of a land size. It's like it's it's very nice, very attractive. Okay, it's so cheap and so cheap and so cheap, but the problem is it's landlocked with just one straight road going into it, no train station, no commercial station, and high, high, high concentration of public housing has a kind of a. Social stigma around it, with which really, really impacts the capital growth which is going to happen. There's no organic capital growth which is happening in that area. A lot of it is artificial, and we maybe I'll talk to you about it, and we'll ask you about it. But before we go into it, can you just give us a picture, a kind of a frame of how this market looks like and what's the market out there?

Julius

Yeah. So if you look at the numbers, median houses are around in between 850 to 880k.

Parag Dixit

Yeah,

Julius

so it's pretty cheap for Sydney. They don't have units, so there is no unitarity. Rental yield on between 3.2 to 3.5 percent moderate. Vacancies are in between 1.3 to 1.8 percent. It's a median vacancies, and then days on markets in between 45 to 60 days.

Parag Dixit

All right. Yes. Okay. No, that's that's good. Okay. And how does the how how is the performance there? How is the price growth out there?

Julius

It's it's varies. If there is a boom, then we could see there are a lot of investors who are interested. But I could see there are a lot of investors are actually selling their properties very quickly. So whole periods are pretty low because of the socioeconomy, because of little bit of you know social stigma. Plus, there is nothing which attracts lot of owner occupiers with low schools, good schools, connectivity is bad. Plus, a lot of owner occupiers don't want to live there.

Parag Dixit

Yeah, yeah, and that that's why the performance will not be too great over there. Yeah, it's not great

Julius

performance. It's like okay, when they it's cheap, that's where people are buying.

Julius

When market is good, probably people are buying. They make little bit of money, and when market is stagnant, lot of investors just liquidate the investments from that support.

Parag Dixit

Yeah. So the so that's a that's a tough one because that means that owner occupiers are not getting attracted to that area, but investors are. So investors are selling to investors. So if investors are selling to investors, then it's it caps out what you can do because eventually price rises are also really driven by owner occupiers wanting to buy in an area, and there's an emotional purchase comes in which drives up the price of a property. But in this case, if investors are selling to investors, and that's the cycle which goes on, and not too much of a latent unoccupied demand is there, or any choice owner occupied demand is there. It kind of kills off all the growth, and I think one of the and I've gone to that suburb, and I know that if you're going there, that's Palmyra Avenue, which is there, and that's the only street to go in and the only street to go out. That's it, one road in, one road out, and that really creates a lot of access issues in that area. A lot of access issues created there. And then I, not too much of a retail or some kind of a stuff is out there. So for whatever I have to do, I have to come to say a Saint Mary's, or I have to come to Mound Road, and all of those areas for my everyday stuff. I have to go to Westfield there in Mount Roy. I have to go to some other shopping areas in Monroe to be able to do what I want to do, and that that that kills it. You know, then you then on top of it, if there is this massive proportions of social housing out there, low median, low income, low social population out there, which limits the purchasing power. It doesn't allow you to grow in terms of value. The there is no gentrification movement at all right now. There's nothing which has started off there, and because of all of this, people the the tenant turnover is extremely high. Anybody who who starts feeling a bit better about their financial situation would want to move out from there, and that's what the investors have then keep on spending more and more money to to be able to you know maintain the property to be able to keep the property and then to be able to upkeep the property to keep it in a nicer condition. But if you keep it in too flashier condition, then tenants may not take care of it because because the socio economic reasons out there. So it kind of it kind of is a very touchy situation, very sensitive situation out in that suburb there, but whenever if we are talking that investors are buying there, so some investor sells, then the other investor comes and buys it. Why does it happen there in that suburb?

Julius

It's because it's affordable, so there is still a lot of interest from investors because of the affordability. Second thing is close to it's it's Western Sydney Airport, and then there is a big buzz about the Saint Mary's Metro line, and then third is there is a lot of marketing from real estate agents. It's cheapest suburbs in Sydney, so let's go and buy it.

Parag Dixit

Yeah, yeah, I know. That's an easy marketing to do. Easy marketing, yeah, yeah. $800,000, $850,000 in Sydney, and you get a house there on a 550 square meter block, and you will get an X Y Z rent. Come and buy. Oh wow, that looks very nice. It looks very attractive, but that's not the place to go. That's not the way it is because of because it doesn't appeal to an owner occupier. I have limited shopping areas. I have limited schooling options. I have limited recreation. I have limited community facilities. What do I do there? What do I do? So I'm I'm I'm in a I'm in a I'm not in a good space when I want to buy as an owner occupier. That's why the investors are clouding it. And when investors are seeking any, you know, if I want a stable kind of an area, if I want a good socio-economic area, it's not the place. So because of this, I buy and. And I realize, oh my God, I made a mistake. So maybe in a year or two, I want to come out of it. When I want to come out of it, then some other investor is going to come in, no owner-occupier is going to come in. So my capital growth is really capped out, and that really impacts me. And that's a huge risk. And I should always think twice when when I would think of investing there because I think, okay, that's not the place I would want my money to go into, but if that's not the place where my money has to go into, what do you think, Julius? Where should I go? Where can I invest? Which is a better option? Sinclair is the nearest suburb, very good. So they have access to multiple artillery road, direct M4 motor access. They have a strong owner occupy appeal, and they have some good schools as well. So rather than buying in Wilmont, my preference would be I'll buy a good neat house in Saint Clair. Also, you find good block sizes. Yeah, yeah. There is also good development activity, and then houses are pretty good. There are a lot of owner-occupied demand as well. Yeah. So nice, neat house on around six, 700 square meter lot

Julius

in Saint Clair versus the suburb,

Parag Dixit

versus Vilmont. Yeah, Colliton. I mean, Colliton is another good one, but hey, I would rather avoid buying in Vilmont because there is so much which is there which is not for the suburb. Yeah, and and Saint Clair is nice. It's a good suburb, and getting a cheaper and neater, not cheaper, a neater and a better house there in Saint Clair would be a much better option rather than we trying to get into the and get into this and then you find that okay I am surrounded by investors and the houses are not kept well and all of that stuff is happening and which is not the kind of investment which I will feel proud of or be happy about and that creates a bit of a stress and which avoid which is better avoided. All right, okay, let's go to the fourth above for the day, which we want to discuss today. So, which one would that be?

Parag Dixit

Woodbine. Woodbine. Woodbines. Campbelltown, right? Yeah. Campbelltown, MacArthur region. Yeah. Yeah. Similar. Similar. On the other side, that's about southwest. So, on the other side, about same 50 kilometers from Sydney CBD. Then it's a it's pretty unusually tucked in, you know. It's pretty in the Hume Highway on the one side and the Industrial Crescent on the other side. It kind of the houses have run through. They've run through pretty quickly about to about a million dollars out there, and but it's it has pretty strange kind of a topography out there. It's very strange suburb. It's got narrow. A lot of cul-de-sacs out there. I don't know why there's so much of cul-de-sacs out there, but there's so many of cul-de-sacs out there, and there's a price point which is which doesn't hold value in that suburb in the Makata region. It it kind of the only suburb which you really find why why are we going to buy for this price out there, right, and that gives it gives you all that strange feeling that something's not right. Why? Why should this suburb be costing that much?

Julius

Yeah, because of the fact that it's a little bit newer. When you look at the surrounding, it's it's too old, and then it suddenly you have a new development which came up. Yeah, yeah, yeah. So when you look at the numbers, house prices are close to 1.1 million.

Parag Dixit

Yeah,

Julius

it's such a small suburb, so they don't have more units, so there is no unit data.

Parag Dixit

Yes,

Julius

rental yields are in between 3.4 to 3.6 percent. Okay, not bad at $1 million range. Vacancy rates are in between 1.4 to 1.9 percent, little higher, but liquidity is faster, so days on market design between 22 to 30 days.

Parag Dixit

All right, okay. So when

Julius

you look at the price growth, there was a time when it grew faster, and now it's stagnant.

Parag Dixit

Now it's stagnant. I think it ran up too fast. Try and catch up with Campbelltown, but it couldn't run. They didn't ran out of steam or something, right? Yeah,

Julius

correct. Because for investors in that suburb, what I've seen is the block sizes are smaller.

Parag Dixit

Yeah,

Julius

you're buying property 55 kilometers from city. Then your intention would be okay. I might get at least 70, 800 square meter land.

Parag Dixit

Yeah,

Julius

land sizes are in between 300 and 500 square meter. Most of the land sizes are in between 300 to 350 square meter. Yeah, and your rental yields are moderate around three and a half percent with 1.1 million dollars purchase price. In that price, there are a lot of things available. That's why I think market performance is not great.

Parag Dixit

True, true. See, with a 3333, and a half percent rental yield, and at 1.1 million price, if I've taken equity and bought that property, then I'm about 3% off the just on the gross value, about 3% off the the rate of interest versus the rent lead, so I'm at a good 3000 to $4,000 negative per month, which really really drains you out. It's it's about 60,000, which is a kind of a person's salary right now in this time, you know, gross level. So which is which is tough to hold, and that's the. But anyways, the suburb holds a lot of risks when it comes along. If I from what I'm with, which you're talking, see the topography because of the sloping topography and a lot of because that's why there's a lot of cul-de-sacs out there. So the sloping topography it makes it very tough to have you know extend extensions on your house to make say a granny flat or. You know, you know, to do a knockdown, rebuild, or excavation, or even retaining walls and all start developing cracks pretty quickly because there's a lot of pressure from the ground on the walls, and it makes you the maintenance cost pretty high. Then you have the Hume Highway creating a ruckus around there. This, I think, a lot of houses which are backing into that Hume Highway, they suffer from a permanent noise pollution, which is always ringing in your ears, which creates an issue, which is it's a it it it cuts down on the resale value, it cuts down on the resale price, and which is a problem. And you know because and and all of this has now become worse because now people have to have their own car. People have to travel around. So because of this, the roads have become more and more narrower because of narrower roads and tightly wound roads. What what happens is there is a parking congestion which is starting coming in, and people are finding that what have I given these kind of top dollars for at a one 1.5 million house price range. I am not getting the bang for my buck, which I wanted. I am just wasted my money out there, and it feels pity when people say, "Okay, you could have gone there, you could have gone there, you could have gone there, but you are sitting in this suburb, and you find that you are sitting at a high risk of a property not reaching its potential when you're looking at the suburb, but still people buy, right? Yes,

Julius

people

Parag Dixit

buy. Why do they do that?

Julius

Yeah, because a lot of people are priced out from Campbelltown and Minto. Yeah, those who can't afford there try to go into the suburbs. Second is basically they have a good fast vehicle access onto the U motorway ramp.

Parag Dixit

Yeah, yeah, yeah.

Julius

So they they are the two main reasons why. First is accessibility to motorway, and second is basically yes, you can't buy in Minto and Campbelltown. Then let's get into this. Let's get

Parag Dixit

into this, and then okay, you think okay, maybe you know there are larger land sizes. Maybe I can do something with it. Maybe I get into it. But once the everyday life catches up with you, and once you get into that noise, which is always ringing in your ears, you say I don't want to do that. When you find out that my house, which I wanted to do something about, if I'm if I'm an investor and I was thinking I'll put up a granny flat or I'm going to make it a dual occupancy of some way or the other, then I find that it's financially unviable to create a granny flat with such a kind of a sloping land out there, which makes it tough to do that. And if I am there, if I'm peace loving person, the ringing noise in my ears is not going to work out. The noise pollution, noise sensitivity. If you have noise pollution, is something which you want to avoid, not the area which you want to do. But if that's the issue, where should I invest in?

Julius

My pick would be Bradbury or Ingold Park because of the fact that okay, I'll get a larger flat block and then nice superior canopy access lower road noise access because it's not as noisy as the suburb. Plus accessibility to the Campbelltown Hospital and then major shopping percent.

Julius

So rather than getting into this suburb, probably if I'll get something towards the Bradbury on a bigger lot sizes with good, nice four bedroom two bathroom house, that would be my preference.

Parag Dixit

Absolutely right. So and when we've always seen that, irrespective of Bradbury or irrespective of Woodbine, whether it is wherever we buy, if the land is not flat, flat hip land has always has a great value. Sloping lands, and if there are slopes which are one meter, two meter, three. I think anything beyond a meter of a slope is killing it. Even one meter is a lot, but still, even beyond a meter of a slope is killing. Then you have retaining walls. Then you have to maintain retaining walls to maintain. The cost goes high, or or your you will start having cracks, which doesn't make your house pretty attractive, and then you will have to get into. It's not a feasible solution, and if you think that okay, my property is just about 1 million ish, but I have got into something which is which is which is too expensive to maintain, and it's not growing in value as well. And in fact, right now it's kind of going the reverse way. I made a wrong choice, or I've not made a very intelligent choice when I have gone there. All right. Okay. So we've we've spoken about four suburbs right now, and we we want to speak about five suburbs, which we have to avoid. So which one is the fifth one, Julius?

Parag Dixit

Boboing. All right. Okay. Very very close by. Close by a suburb. Yeah. In the same Campbelltown area. Okay. We're talking a lot about Southwest. There's the second suburb about Southwest, but again, this is these couple of these suburbs are pretty interestingly placed and pretty difficultly in a difficult situation. Similarly, in this one, this suburb is surprisingly a new suburb made in 8019, 80s, 1990s, and all that set up there. But the only the problem is there are small lots, new suburb, small lots. Streetscapes are nice; they're pretty tight, but smaller lots, and which make it so difficult for the capital value to grow there that they are so stagnant, and it is. It's there. It's right. It's it's there. It's a newer suburb. You may still find that okay, the houses look a bit newer, but they look like cookie cutter houses. Yeah, they're one after the other, small, small, small, small ones. Nothing much changes. Just just the same view. Just the same look out, right? And that makes the market reality pretty pretty sad, or we're pretty strict for it. Let let's let's have a look there real. Yeah,

Julius

correct. So still the suburb is around million dollar mark. The prices are in between 1,000,001 point 1 million, where they don't have any placements for the units.

Julius

So no units data, rental yields around three and a half percent, and when you look at the vacancies are in between 1.2 to 1.6% moderate. Liquidity score with red on market is around 37 to 45 days, and annualized growth. If I compare from long years in between around five to 7% it's it's it's moderate. It's not an outperforming suburb because of the fact that okay, when as an investor, if I'm buying a million-dollar suburb, million-dollar price above with around 53 kilometer to city, with the narrow block size. Then it the suburbs' performance is not outperforming with when you look at the surrounding of it. So that's why it's a suburb where okay yes rental yields are moderate. When you look at the historical growth for the suburb is okayish, and then when you and then when you look at the current demand and supply, which it's tight, but still it is not making sense to for any investor to invest around 1.08 to 1.1 million dollar in that segment.

Parag Dixit

In that segment, with smaller land sizes, smaller lot sizes, you know, it doesn't create any value. The wealth creation is pretty low, and then you start finding okay wherever I invest it I'm not going to get anything out of it and that's a huge risk when if I'm a buyer and if I want to weigh down my risks small lot sizes are always riskier and see no you you you you know that my neighborhood suburb is Campbelltown and Campbelltown has about 600 700 square meter lots and I've got half the size.

Julius

Yeah,

Parag Dixit

that makes me, anyways, unattractive. Because of this, not too many people want to buy there, so the sale transaction volumes are pretty low there. Maybe, which is pretty pretty low there. So, which which makes it pretty unattractive. That okay, if I'm going to be stuck with a house, I'm going to be stuck with something which is which is non-sellable, and then it makes me make me wonder why I bought there. And then I to keep on going to Minto, to keep on going to Ingleburn to go to the train station or to go into the supermarket and then go to the schools. And I don't want to do that. Obviously, when the road when the houses are small, the roads are also smaller and narrower, and that brings again the traffic congestion, which keeps on keeps on piling misery on myself, so I kind of pretty higher risk when if I want to buy there. But what is the profile of people who are still buying in that area?

Julius

Okay, so when you look at the surrounding of the suburb, there are a lot of housing commission, and then older suburbs.