This week we chat again with George Raptis from Metropole Property Strategists about the all important ‘When, What and Where’ of the Sydney’s property markets. Find out specifically where the high performing properties are located and what to consider when looking in these areas.

Listen in to the podcast by using the player embedded into this page or read the transcript provided below. Enjoy!

PODCAST TRANSCRIPT:

Andrew Mirams (AM): Hi, thanks for joining me again on our latest podcast. Sitting with me today is George Raptis, Director of Metropole Properties in Sydney. Welcome George.

George Raptis (GR): Hi Andrew. How are you going?

AM:  Going well, thank you. I’m really interested, George, in your knowledge. You’ve been in property for, I know even though you look like a young man, well over 25 years. I’m really interested in your thoughts on what to look for in a high performing property portfolio or individual properties.

GR: Yep and thanks for the compliment Andrew. I guess the formula that I like to use, that I like to keep it relatively simple when you’re looking for properties that are going to outperform the ridges, as far as capital growth is concerned. I use, what I would call, the three W’s and the three W’s are essentially when. When do you buy, timing? What. What do you buy? Do you buy, you know, an apartment, house, land? And then there’s the where. The old ‘location, location, location’. Whilst all three pieces of the jigsaw puzzle are important parts of the whole process, I guess for me, the most important one out of the three would be the where.

Location in any property purchase is paramount because location is something that you can’t change. With regards to the when, timing, I know a lot of people do put a lot of energy into timing. For me, timing isn’t the most crucial thing, albeit nobody wants to buy when a market’s overheated. But, at the end of the day if you’ve got yourself a plan, then our plan always here at Metropole is a long tern buy and hold strategy. For me, it’s more instead of timing the market, time in the market.

AM: Absolutely.

GR: Where I do see people fail as they get themselves and their properties the way they want to go and take that leap of faith. They jump off the precipice but unfortunately they don’t stay in the market for long enough.

AM: That’s really the hit and miss, buying in the next boom and things like that, which is almost impossible to do because if it was that easy we’d all be doing it, mate.

GR: Yes. Exactly right and the other thing obviously we didn’t mention is the what. You can buy apartments, house and land. It really depends on where you’re looking at with regards to individual property markets but if we take the biggest cities, Sydney, for example, and Melbourne, the two mature cities, I’d be advising our listeners to be looking at apartments. I think they do make better investments than house and land but you still need to be very, very discerning. You still need to be buying the right sort of property for the right location. For example, you know you wouldn’t want to buy a one bedroom unit out in the mortgage belt territory where the demographics are predominately young families.

AM: I think you mentioned a really good word there in terms of demographics and way that our country is changing in Melbourne, Sydney, Brisbane and all the capitals but with your knowledge in Sydney the demographics are changing, aren’t they? People are more accustomed in the owner occupier appeal, one of the big things you want to buy is your one and two bedroom apartments. They want to buy a bit of lifestyle don’t they?

GR: Yep. People want to be close to where the action is. I mean, a lot of the people that do rent in these inner type locations, in some cases I’ve seen, have got the capacity to go out into to suburbs and buy the mansion but they don’t want to be commuting. They want to be close to where their jobs are, want to be close to where their friends are and they want to be close to where all the recreational facilities are.

AM: Yeah. If we talk a little bit about the where’s, I know where you buy in Sydney, but let’s talk about the inner eastern, the inner west and what the attractions are about in those areas.

GR: Obviously, we focus on those inner and middle ring suburbs, so if we’re looking at it from a geographical perspective, obviously we like the eastern suburbs, we like areas like the beach side suburbs, your Coogee, Bronte, Clovelly, Bondi, these sorts of locations. We like these location because, what it is essentially that attracts people there, lifestyle is one, two it’s close to the city, close to the jobs and, really to be honest, you can’t pick up ocean and move it away from where Bondi is. It is what it is so it’s always going to attract people and the other, really, when we look at these locations is the scarcity elements.

AM: Absolutely.

GR: It’s not like we’ve, you know, got an abundance of land, acres and acres of land, where we can build all these new things, we’ve the same properties turning over all the time.

AM: I know it’s had quite a remarkable growth, mainly because of the way the inner west is gentrified. Talk to me a little bit about the inner west and what’s happening there.

GR: The inner west is a really interesting one. Probably over the last five years, until maybe the last six months or so, it’s really been the stand out performer as far as the Sydney property markets are concerned. I think that’s probably from two perspectives. One would be, like you said, changing demographics, it’s gentrified. If you look, for example, at a suburb like Newtown, let’s say for those that know Sydney well, you know 30 years ago you wouldn’t go into Newtown after dark. It was dark. It was dingy. It was crime ridden. There were a lot of bad elements happening in those areas, empty shops, that sort of thing.

But, what we’ve seen in the last 20 years, geez we’ve seen it change and really the infrastructure was there. Sydney Uni(versity) just down the road, Royal Prince Alfred Hospital, that sort of thing and what’s happened is it’s become very trendy now, very funky, these sorts of areas are now are very highly sought after.  I guess the other suburbs that, you know, piggy-back Newtown have really benefitted from what we call the ripple effect. In other words, we’ve seen these areas change.

They were predominately blue collar working class area, bit of a melting pot with, you know, with the various differing ethnic backgrounds but what we have seen now is that a lot of the younger people are starting to move into those areas. Because the second point why it has changed over that period of time, why it’s performed so well recently, in my opinion, is the fact that it was still relatively affordable by Sydney standards so affordability played a role. People are looking over there saying ‘Gee I’m getting a pretty good bang for my bucks and it’s close to where I want to be’.

AM: Yep and it’s also really accessible into the city and everything like that, less commuting and it’s like everything, the whole area grows when there’s a little bit of one sneezes and the rest catches a cold. Doesn’t it?

GR: Absolutely and whilst it’s got a good train system, finally our NSW government’s opened the purse strings and started to spend some money on some infrastructure, the inner west is probably one of the locations to first benefit from that with the extension of the light rail. It now services the whole inner west pocket terminating at ? so it’s even easier for people to commute in and out of town.

AM: I think although people are sitting there and saying ‘Ah, Sydney’s had an extraordinary run. I’ll wait until it’s cooled off, I’ll wait for this, I’ll wait for that’, I know from the way that we do business, you’re still buying in those areas. Are you still buying inner east, inner west and things like that?

GR: Yeah. We’re still looking for opportunities. We’re always looking at the suburbs that are a little bit under the radar Andrew. We’re always looking at those opportunities because, obviously, we’re out there all the time. We’re out in the marketplace every day. For me it’s, you know, one has to have a plan and for us, I guess from some the conversation we’ve had together and conversations we’ve had with our clients, is the fact that our plan is we want our clients to create the strongest asset base that they can. Really, it’s about being in a position where you’re in a situation where you want to hang onto these properties in the long term.

Whilst some people might think ‘Am I paying too much today?’, I’d be saying, you know, the common answer to that is when was the best time to buy property? Some people say 30 years ago. I say today. If you’re in the position where your strategy is one whereby you want to buy the strongest assets that you can and your plan is based around the long term buy and hold strategy, what you’re paying today in 10 or 15 years time, providing you’re buying the right sort of asset obviously, will be irrelevant.

AM: Okay, well I think there are some brilliant insights there from George about the Sydney market and the what and the where’s to buy. Of course, if you are looking, from wherever you are in Australia, to buy into Sydney I can highly recommend that you give George a call or give me a call at the office and we’ll happily put you in touch with George. Thanks for your time today mate.

GR: Thanks Andrew, pleasure as always mate.