Regret Buying 1br at Auction for $749k :(

dualcore on 09/12/2020 - 13:44

Hey everyone,

I feel a bit disgusted with myself. After several months of property searching and bargain hunting, and watching property prices increase and all those bargains disappear, I decided I'm going to buy a property no matter what by the end of this year.

I live in Sydney. I want a place close to work (in Surry Hills), and I own a car so I wanted parking. I have lived in the Alexandria area previously and really like the area, and think there's future investment property as Redfern becomes more gentrified. My other criteria is (1) low density; max 3 storeys, (2) no major building issues, and (3) <15min walk to Redfern station (which has the north shore line; which I take regularly).

There was only 1 (yes, one) 1/1/1 unit that met the above criteria in Alexandria. Everything else was either high density concrete boxes, had serious building issues, or were not the location I wanted.

This unit was beautiful. It's north-east facing, super light-filled, it's top floor, it was built in 2014 and is loaded with amenities like correctly-sized ducted air conditioning (kept it cool in a 40c day), and has a reasonably big balcony. The location is also good for me, because I can walk to redfern station in 13 minutes.

I went to auction, and I ended up paying $749k for the price. The other bidder was $746k. I am really regretting it because I'm really a bargain hunter at heart, and I feel disgusted for spending so much time to save $10 or whatnot, I ended up spending so much money for an (admittedly nice) 1br apartment. It is auction so I do not have a cooling off period and cannot back out.

I can afford it fine, but I just… feel bad. Has any OzBargainer spent more than they wanted to on property? How do you get over it?

Home & Garden

Comments

              • May4th on 10/12/2020 - 22:36

                @techlead: fair enough i was trying to make the point that buying btc in 2010 near its birth and expecting an potential upside of 10000000000% or whatever it is isnt realistic and unlikely to ever be replicated in our life time as a new investment asset class. All investment hold risks it's about your appetite for it. I see a lot of millenials playing roulette with CFDs and penny stocks nowadays confusing investing to gambling. as they say stonks only go up..until it doesnt

      • Pacify on 11/12/2020 - 01:01
        +1

        Bitcoin was straight gambling. For ever bitcoin, there's another 100 different speculative things you could have invested in and lost it all. Bitcoin was just a fluke, a random event.

        • techlead on 11/12/2020 - 08:37
          -1

          I suppose you think Google was a fluke? Amazon? I can substitute Bitcoin with X company. For every Google there are 1000s of companies that failed. So Facebook, Amazon, Apple, Netflix, Google (FAANG) all "a fluke, a random event"?

          Bitcoin was no fluke, just like the internet and the rise of internet related companies in the 90s (yes, there was a crash in the 2000s, but good quality companies like the ones I have mentioned survived and thrived after that). Those who understand technology knew Bitcoin would be huge years ago. Blockchain could be an integral part of your life soon and you don't need to know how it works, it will just be in the background.

          • TEER3X on 11/12/2020 - 12:09

            @techlead: you don't need bitcoin to have blockchain. there's basically nothing proprietary about bitcoin.

            that's what i keep telling myself while i watch the price skyrocket.

  • afah0447 on 10/12/2020 - 11:03

    Just give it time. The value will increase.

    • techlead on 10/12/2020 - 17:56

      Question is how much that and what's the opportunity cos, ie what could you have done with that money and the returns you could have gotten.

  • Keplaffintech on 10/12/2020 - 11:14
    +2

    It's worth what you paid for it. There was someone standing next to you almost prepared to pay the same. Yes you both got 'emotional', but that just shows how desirable the property is.

    It sounds like a good place, good location, easy to sell. When you sell it you'll easily find other buyers lining up to make the same "mistake".

    You can afford it, forget about it, enjoy it.

  • PurchaseAnxiety on 10/12/2020 - 11:28
    +1

    If the place has everything you want, in an area you like, then it's money well spent.

    Remember, being frugal only makes sense if you eventually put those earlier savings towards something. In your case, you put it towards a property you really like. Not a bad outcome.

  • beezlebub9 on 10/12/2020 - 11:45
    +6

    OP you whined on whirlpool about this last week, people there said it was fine now you’re whining here. Just enjoy your apartment

    • AusGeno on 10/12/2020 - 12:02
      +12

      OP is this true? Are you cheating on us?!

    • SF3 on 10/12/2020 - 13:55

      no echo chamber found?

  • sydozbargain0000 on 10/12/2020 - 11:54
    +1

    https://www.domain.com.au/302-123-129-wyndham-street-alexand…

    OP, that was a good purchase for $749K. You would have to pay 900K for this unit if you were to buy in 2017 when the property market was at its peak.

    • earth worm jim on 10/12/2020 - 13:10
      +1

      I highly doubt that the price of the unit has fallen by 20 percent since 2017.

      • techlead on 10/12/2020 - 13:15
        +1

        In some areas they have, and there's an oversupply of apartments. Combine that with the cracking and construuction quality issues, I ain't touching apartments at all. I'm ok with houses and duplexes though.

  • sheepzpal on 10/12/2020 - 12:30

    Looks like a good buy in Sydney. And once you start bringing in your dates you won't regret :))

  • techlead on 10/12/2020 - 13:13
    +3

    $749k for a one bedder? haha, that's a bad deal, can't believe so many people drank the koolaid.

    You know that you don't NEED to own property, right? There are many other investments that have much much better returns than property, I really don't understand why everyone wants to own property, is it something in the water or food?

    Have you factored in all the costs, eg strata, council fees, any special levies etc etc?

    • f38r1 on 10/12/2020 - 13:28
      +1

      Strata should be around $1055.80 for that unit

      • techlead on 10/12/2020 - 14:16
        +1

        Yikes!

  • tessel on 10/12/2020 - 13:37

    I see what you did with this post :-) You should work in marketing.

  • tellhimhesdreaming on 10/12/2020 - 13:54
    +6

    Sydney is cooked, this amount of money for something so small makes my brain short circuit.

    • techlead on 10/12/2020 - 14:17
      +2

      You don't need to own property, let these delusional people duke it out lmao.

      There are much better investments than property.

      • sangohan on 12/12/2020 - 14:53

        exactly - if property is expensive, it means rent is cheap (because otherwise, property wouldn't be expensive!).

        So rent, then invest the difference into stocks/bonds.

        • techlead on 12/12/2020 - 15:06

          Wake me up when we are like HK where people are struggling to meet rent and they have caged apartments, that's when you have a huge problem on our hands.

          Right now, it's fine, although I do support changing incentives like grandfathering negative gearing. I think property should not be used as a vehicle for investment speculation.

  • postform on 10/12/2020 - 15:00
    +2

    Hang on.. Aren't rent prices dropped heaps in Alexandra? I doubt any foreign students are coming to Australian shores in the next year. And I wonder how many property owners have enough capital to gap the whole year.

    Interesting buy. I believe renting would be smarter here (Since in Alexandra average rents 450~550 a week, and I'm sure it's negotiable considering a quick search on REA and Domain shows more than 2k properties on rent available).

    Sydney is cooked. I do wonder when prices start to fall because no one has money left to buy and pump the market, how many will be burnt, and how our "growing" economy will survive the negative wealth effect and debt vacuum that'll eat up all the cash flow of most age groups.

    • dualcore on 10/12/2020 - 23:43

      I used to rent in Alexandria. It's a very nice suburb and there are few foreign students around here. Also, I plan to turn this into an investment property when I upgrade and want a house.

    • stewy on 11/12/2020 - 03:06
      +3

      Parents have a unit in the Burwood area and their tenants bailed at the start of COVID. They took months giving it a full renovation and the property is now on the market for less than the last lease (which was already below market rent). They can't get a single person through the open houses, apparently the agent is having these issues across the board.

      My parents are lucky, this property owes them nothing, but there must be plenty of other landlords out there that are going to be in a fire sale once the banks stop allowing their repayment holidays…

  • Willco88 on 10/12/2020 - 16:49
    +5

    THAT'S A FANCY LOOKING SQUARE BOX

    • techlead on 10/12/2020 - 18:02
      +1

      A square box where he doesn't even own the walls hahaha. All he owns is the air within the walls.

      That sure is a fancy overpriced box of air. :D

      • Willco88 on 10/12/2020 - 18:09

        It's sad I could get an acre of land plus a massive house and shed and be within 30 mins if ADELAIDE CITY centre

        • techlead on 10/12/2020 - 18:22

          Yea, it's so stupid. I ain't playing their game. I bought to live in, that's it, not a cent more exposure to property.

        • stewy on 11/12/2020 - 03:09

          You could get several acres of land with great weather in Townsville for the same money.

          I really don't see the attraction to the Sydney rat race…

  • Emerald Owl on 10/12/2020 - 17:18

    If you can afford it, you’re in a better place than most

  • Pelicannn on 10/12/2020 - 20:14

    Lordy…

    Just bought a brand new 4 bedroom townhouse, 2.5 bathroom (with separate bath and shower in main), double garage within 10km of the Brisbane CBD (Kenmore) for $739k. A bit of a backyard area but that didn't really interest us as we are never home and hate yard maintenance. On the end so only one neighbour and a quiet leafy street. Can't believe the prices in Sydney these days. I used to live in Sydney. I'm never going back. That being said, all going well your property goes up in value and its all relative anyway.

    Just know that most people on here are going to see you as an idiot because value for money and Sydney property are very far from each other. I used to rent out a $1.1 million dollar apartment in Rouse Hill with two friends from work, 40km from the CBD. In Brisbane, that would buy you a beautiful home in a very nice suburb close to the city. After I moved up here for work I realised Sydney was never going to be a place I could call home. If your job allows it, consider moving to Brisbane :)

    • Willco88 on 10/12/2020 - 20:17

      Yes I agree turn around sell it for 1m next year then take that money buy or build a massive family home that will last you long time

    • brad1-8tsi on 10/12/2020 - 21:41
      +2

      Google Maps says Kenmore is 15km from BNE CBD. Why is google maps 5km more than you?

      Alexandria is 5km from the CBD. It's got a lot going for it if you work & play in the city. You pay for more than just the property.

      • Pelicannn on 11/12/2020 - 10:19

        Apologies I meant radius not by road. 13km by road.

  • Narull on 10/12/2020 - 20:49
    +1

    This post screams "I'm flexing how much money I have" not "I'm a bargain hunter".

  • Cusack on 10/12/2020 - 21:15

    I bought a house in Sydney only 8 months ago right smack in the middle of covid lockdown and I knew I got it cheap! A month ago, an identical house around the corner sold for 11.5% MORE than what I paid. I am a bargain hunter. And I feel great :)

    • dualcore on 10/12/2020 - 23:45

      Congratulations :)))

      • Cusack on 11/12/2020 - 07:36

        Thank you! :)

  • brad1-8tsi on 10/12/2020 - 21:34
    +2

    Welcome to the area.

    I bought in Erskineville in 2018.

    The place I bought was $100k (about 7%) more than what it was worth (when compared with similar sales in the area). The place met all my criteria and more.

    I mentioned that I might wait until the right priced unit came along to my sister who is an emotional purchaser. Her reply was "How long do you want to wait? Do you really want to spend all your spare time house hunting?" So I bought the place. It was a really smart move and worth the extra money. I love the joint.

    • Willco88 on 10/12/2020 - 21:39

      Has it gone up in value?

      • brad1-8tsi on 10/12/2020 - 21:49

        Yes, the dude next door had his place valued (there are 7 near identical townhouses) 2 weeks ago as he was refinancing. It's gone up 15% over 2.5 years. Not amazing, not terrible given the last 10 months.

        I would have been happy if it had maintained value as it's my PPOR and I'm here as a lifestyle choice rather than an investment vehicle.

  • MessyG on 10/12/2020 - 21:48
    +1

    OP it sounds lovely. It's really normal to feel that way after making such a big investment and that's about right for Sydney these days. You can afford it, get in there and enjoy your life, pay it down as fast as you can while interest rates are low. I hear some property advice a few years back that said "don't ever, ever sell in Sydney" - once you've paid it off and can afford somewhere else, you'll have rental income from others too. Congratulations!!! You've bought a home!!!

    • dualcore on 10/12/2020 - 23:46

      Thank you. Yeah I'm not planning to sell. I'm going to turn it into an investment property once I want a house.

  • ozsj on 10/12/2020 - 23:25

    $750k was the market price — at least you know that for sure

    • SF3 on 10/12/2020 - 23:48

      well - the REA will use it as the "new" market place (if higher than current). Then REA will letter box drop an ad to say, new price record to spruik others to sell.

  • Stevecro on 11/12/2020 - 07:12
    +4

    You get over it by changing your mindset from being a sheep and thinking like most people, to thinking differently. You need to look at the bigger picture and not have tunnel vision like most of society.

    Life isn't about owning things like property and other materialistic stuff. Who cares how much you paid for it, just enjoy life and be happy. Once you die, you can't take money, profits and property with you to your grave, so does it really matter that you paid a little more if you like the property?

    There is way more to life than owning a property and watching the value increase…although for much of society, life is all about money, profits and accumulating things. I have seen many people who rent all their lives who are way happier than others who own 3 or 4 properties. You just need to change your thinking.

  • baker bob on 11/12/2020 - 08:56
    +4

    You can always tell the non property owners because they talk about ROI on a PPOR and totally ignore the emotions of the purchase or regard them as negative.

    If this was an investment then emotions play no part, you look at the numbers. This is a PPOR and it matches your wants/needs. Who cares if you paid a bit more (I dont know). You bought something that you will be happy living in, coming how to, close to work, close to the heart of Sydney with a social life that is only equalled by Melbourne despite what people will have you believe. I have been to every capital city in AU, sorry but no.

    I negotiated over $10K on my last PPOR purchase and risked losing it and to this day, 8 years later, my wife and I still kick ourselves for having run that risk for a measly $10K because we absolutely love where we live. Forget the remorse, do you love where you live?

  • TEER3X on 11/12/2020 - 10:29

    Don't feel bad, you can afford it, that's a huge accomplishment in itself. It will ultimately be a great investment, even if things are shaky over the next 3 years or so.

  • HangryCakeStore on 11/12/2020 - 13:20

    And the racists try to blame the Chinese for these house prices, true racial profiling from them bigots, another priviledged example

    • watwatwat on 11/12/2020 - 14:26
      +3

      Do you think it is fair that Chinese people can come and own Australian property easily and yet Australians can't buy land in China or most other countries?

      • Donaldhump on 11/12/2020 - 14:35
        +3

        no but that's our government selling out, not the chinese's fault.

      • Duckie2hh on 11/12/2020 - 15:59

        They work hard to get their money. Why wouldn't they be able to come and buy property? Would it be unfair that you are not allowed to buy properties in the USA or UK?

    • brad1-8tsi on 11/12/2020 - 16:40

      And the racists try to blame the Chinese for these house prices, true racial profiling from them bigots, another priviledged example

      If there were less people wanting to buy then house prices would be lower. It's a simple supply/demand equation.

      Have a look at the newer developments and there are a lot of apartments that never have a light on even though they are sold.

      • john_conner on 11/12/2020 - 19:37

        Same people probably happy to have property prices increase after they have bought due to overseas demand…

        Trust me you don’t want to “own” property in China. Your rights to hanging into it might not be as strong as they are in other jurisdictions.

      • HangryCakeStore on 11/12/2020 - 22:44

        Yes simple supply and demand, but people want to blame racially, they're just looking for a reason to start a riot

  • Koipanda on 11/12/2020 - 13:40

    Why not buy a house?

  • dealzitis on 11/12/2020 - 14:08
    +3

    The way I see it, you were already paying rent…you just changed who you were paying rent to :) and who knows after paying rent for 30yrs you get a jackpot aka capital appreciation…which is bound to happen

  • mezje on 11/12/2020 - 15:19

    Echoing other comments, sounds like it wasn't that bad of a deal for the quality of place you got. It seems bad now but remember the positives and benefits you listed.

    Far better then spending less on something you didn't want and having cladding or building issues down the line.

  • Oofy Doofy on 11/12/2020 - 15:36
    +1

    These threads which are property related just show me that most people are completely obsessed in Australia.

  • burns13 on 11/12/2020 - 16:15

    Buyer's remorse. You will be fine soon 👌👌

  • AustriaBargain on 11/12/2020 - 17:28

    A lot of people will be glad to change places with you, if you're unhappy with your lot in life and chance so far.

  • fozzie on 12/12/2020 - 01:23

    Firstly congrats,

    Why do you feel bad? You are buying the property, not wasting money on rent. Just enjoy!

  • Blitz001 on 12/12/2020 - 07:51

    Jesus mate come to Victoria, they’re giving places away!

  • ldt on 12/12/2020 - 08:05

    The metro in Waterloo opens in 2023. It’ll increase prices in the area, so you’ve done well.

  • r3volt on 12/12/2020 - 10:15
    +3

    This place is worse than reddit with humble brags and ego stroking

  • wimphrel on 12/12/2020 - 13:21
    +2

    For Alexandria - as others have said I don't think $750K is that bad at all, especially if you plan to live in it yourself?
    If you plan to live in it, and it's in a place you want to live and like - then you've done well to afford it!!!

    You don't HAVE to make a 'gain' on the property you live in. It's peddling the expectation that you 'have to make money on your property' that's raising house prices.
    Even if you sold it for the same equivalent cost in the future, you've not paid 'rent' for that time you've lived in it. If you think losing the opportunity cost is bad, then that's what everyone who wants 'affordable housing' wants - you don't make money from owning and selling property right? If you don't make money from buying property, then a lot of people would consider renting instead of borrowing several hundred thousand from a bank and losing tonnes of money on interest…. oh wait…. hrm, we've come back full circle.

    I'm a property investor, and I'm happy making very little gains out of it compared to other investments -> because I get a predictable cash flow from rent, can borrow more money that I would normally from bank, and my tenants (low-income earners) can live in an area which has good schools for their kids.
    Tenants that have moved out generally saved up a deposit and could buy an apartment in the same area or neighbouring suburb: I've had a few divorcees come through needing to stay in the same area after the lawyers sort out asset splits.

    Even if you don't have capital gains, you've put the effort into saving and acquiring the rights to your own home. CONGRATS!
    You now have something that keeps its relative value in Alexandria and can sell it to upgrade in the future.

    Consider 'overpaying' not a big issue if you learn from it & apply the knowledge when you 'upgrade' in the future (which will involve much more money :D)

    • congo on 12/12/2020 - 16:08

      Renting is difficult post COVID. Wonder what it will be like in 2021…

      • wimphrel on 13/12/2020 - 00:06

        @congo: do you mean renting out an apartment? Or applying for an apartment? I guess it depends on the supply / convenience & price.

        I'm one of the fortunate ones where my tenant has had a stable job throughout COVID - but I did plan for significant periods of 'lack of rent' before I bought the place many years ago. Like any investment / business - you should work out whether you can handle worst-case scenarios.

  • daddydirtsurfer on 12/12/2020 - 15:36
    -1

    Just sell it. Doesn't matter what you can afford.

    I don't need to spend on it. Just ridiculous overprice.

  • congo on 12/12/2020 - 16:04

    I recall seeing on TV that you could get a multi bedroom mansion with acreage somewhere in Europe for very little.
    Don’t understand what makes Sydney’s prices so high.
    Is it because the government doesn’t release enough land?

  • congo on 12/12/2020 - 16:06
    -1

    When will Amazon start selling apartments?
    Because I would like to return it if I am not 100% satisfied after 30 days :)

    • dualcore on 13/12/2020 - 13:41

      It’s actually called the cooling off period and you do get 99.75% of your money back.

  • ihbh on 12/12/2020 - 21:24

    Bad purchase:

    • never buy property at the all time low in interest rates

    How much can you rent it out for? What is the rental yield (rent / price)? Compare to purchasing it all on debt? How does the rental yield compare to your loan rate? What if interest rates rise 0.5%? 1%?

    • land appreciates, building depreciates - in 10 years time, you might get the same price if you're lucky
    • dualcore on 13/12/2020 - 13:46

      • I don’t believe mortgage interest rates have hit their floor. I expect RBA to do increasingly ridiculous things to keep AUD lower against the USD; like yield curve control, purchasing of mortgage backed securities, etc.

      • $620/week pre Covid. 4.6% gross yield. Now $520/week, or 3.6%.

      • yes. This unit has 39sqm of ground land. Much better than other apartments at like 20sqm or 24aqm.

  • thewhip93 on 13/12/2020 - 08:01

    Feel like this one is more likely than not to be a bad purchase.

    The most important factor, but also most often forgotten one, about property is rental yields and the cash flow received off these

    So many properties in Sydney are heavily cash flow negative, many losing money and consequently from an investment perspective are terrible investments. Without sufficient rent rises to bring these properties out of losing money, the only thing that will increase property values in Sydney is the greater fool theory, whereby a bigger fool comes along and takes out a bigger mortgage to take on even bigger losses. Or in other words, why buy a property when someone is gladly paying a fair chunk of your rent

    Now… thinking about this, does look similar to a ponzi scheme

  • Herehere on 13/12/2020 - 09:51

    A one bed on Gowrie St went to auction yesterday and sold for $785K. It is not too far from where you are. It is more of demand and supply in the property market. The price at the time you bought would be different in a few months either up or down when similar property comes up for sale.

  • KaTst3R on 13/12/2020 - 10:42

    Everyone thought they overpaid 5 years ago. Now they are all laughing to the bank…

    • mun4 on 13/12/2020 - 14:31

      All investors are playing musical chairs.

    • netjock on 14/12/2020 - 22:25

      Now they are all laughing to the bank…

      If you are laughing all the way to the bank then you are missing out. As you got off the ever increasing ladder of property prices. You won't keep up once you pay your REA fees in addition you won't be able to buy back into the exact same property due to stamp duty.

  • frostman on 13/12/2020 - 13:39
    -1

    Apartments in Sydney have a better return when LEASED.
    Houses have a better ROI when sold.
    Houses appreciate 100% better than apartments, unless you struck gold and bought an Apartment in Barangaroo before the Casino was announced.

    If you bought an apartment to LIVE in for a high cost, then you shot yourself in the foot.

    • dualcore on 13/12/2020 - 13:47

      Yeah you’re right. Apartments are for yield. Houses are for capital gains.

  • Cheap Charlie1 on 22/12/2020 - 22:35

    Some people like having that noose around their neck. Hate freedom.

    • May4th on 25/12/2020 - 10:59

      each to their own. there is also freedom in living in your own place mortgage free eventually. everyone has their own idea of what they want to do with their money

      • Cheap Charlie1 on 26/12/2020 - 16:58

        Sounds like OP will take 20-30 years to pay off his "dream" flat.

        If he's got the cash or 50% down you wouldn't punt all that cash into a $750k flat when you can rent and stick the money in the stock market.

        Each to their own.

  • david1371 on 26/12/2020 - 16:07

    You probably shouldn't have been so hung up on the one area to limit your choices.
    I don't mean you should buy some amazing bargain in god forsaken Blacktown or anything.
    You probably could of expanded the area to some other inner east or west suburbs a few kilometres beyond your chosen area to at least give you more choice than one.

  • dts88 on 21/01/2021 - 15:54

    put this way.

    you are only paying 3k dearer than previous bidder (or assume 746k was the market price).

    there is nothing for you to regret.

  • mr_asstight on 23/01/2021 - 01:39

    OP need not worry. I've bought the top so many times and turns out great

  • dualcore on 21/03/2021 - 04:27
    +3

    Hope bumping this thread isn't against the rules or anything.

    There had been two sales of other 1brs in my apartment. One without a car space fetched 740k. Another 1/1/1 fetched 780k.

    Considering I have the north-eastern top-floor with only 1 common wall (and the neighbor is amazing), I'm pretty happy with the purchase

    • Logical on 21/03/2021 - 22:14

      Perfect. Just wait a few years and it will get even more better!

  • Gradesbrah on 11/07/2021 - 20:41
    +1

    How is the purchase making you feel now?

    • bozbargain on 07/09/2021 - 16:50
      +1

      Was going to ask the same thing! It's probably worth $100k more now…

  • brendan0 on 17/12/2021 - 20:23

    Blame the NIMBYs and the local councils that enable them

  • Sam Sharik on 08/01/2022 - 08:13

    oh boy… thats too much

  • serpserpserp on 08/01/2022 - 16:11

    The amazing thing here is that OP had a lazy 200k for deposit, stamp duty and legals on his own.

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