Ep. 119: Finding the opportunities in the Sydney property market, with Chris Clarke

In this episode of the Geared for Growth podcast, host Mike Mortlock is joined by Chris Clarke, Founder of Sydney-based Clarke Buyers Agents, to discuss the ever-evolving Sydney market. They delve into the disparity between median prices for houses and units and the likely impact of the anticipated intergenerational transfer of wealth.

Chris and Mike kick off the conversation by exploring the opportunities available for buyers in the apartment sector, highlighting the widening price gap compared to houses, especially in “blue chip” suburbs where the median house price is higher. They discuss the effects of gentrification and increasing demand for better schooling and amenities, noting the potential for purchasing units with growth prospects.

Chris provides a detailed overview of the types of apartments he favours, citing specific suburbs as examples. Mike questions Chris on why housing in Sydney commands such a premium compared to other capital cities. Together, they consider whether the land value in Sydney is unlimited and examine why that might be the case.

Mike brings up the topic of intergenerational wealth and highlights the growing trend of parents buying properties for their children, despite it potentially not offering the highest return on their investment. Chris agrees, noting that more parents are purchasing property to ensure the next generation can enter the market. This trend has emerged due to ever-increasing property prices and the growing income-to-asset price ratios, which are making it harder for younger people to buy property.

Mike and Chris wrap up the conversation by considering what these observations mean for the investor, and Chris shares his best advice for anyone wanting to progress along the property ladder.

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Mike Mortlock is joined by Chris Clarke, Founder of Sydney-based Clarke Buyers Agents, to discuss the ever-evolving Sydney market. They delve into the disparity between median prices for houses and units and the likely impact of the anticipated intergenerational transfer of wealth.

• The disparity between median prices for units and houses
• Why are Sydney prices so much higher than other capital cities
• How Chris looks for a suburb that he believes is going to perform
• The transfer of intergenerational wealth and how it’s impacting property
• How buyers are dealing with a market that’s getting increasingly harder to buy into
• Is there a ceiling on the Sydney market?
• Chris’ best advice for buyers

“I think we can see the unit prices going up because rent is going up so there’s a very vanilla easy thing to say well it’s all going up because the price of properties are going up, because of the rental yields going up, but there are some spikes in some key suburbs that indicate to me for next year or two they could continue to be attractive” 1:37

“There’s also an element of looking at properties, complexes being built last 5-10 years – there’s been some that have poor cladding, there’s some with lots of issues – but the ones that have been built that are actually well done, then go through the strata reports with a fine tooth comb and come out thankfully squeaky clean they’re the ones that I’m also seeing are in demand” 6:10

“You’re still spending some money for that- $150,000- $200,000 – for that second bedroom and I think it’s probably worthwhile because as a resale, you have invested in two bedrooms I’m confident saying will always be more attractive in a resale and capital growth standpoint than a one bedroom” 7:40

“I lived in Singapore for over 4 years I’ve spent some time living in the UK as a younger man and when you speak to locals in those areas…75% of the 80% of them, their retirement plan was not only Australia but more often than not Sydney” 10:30

“Whereas in Sydney… I’ve won at auctions with cash buyers where there’s no valuation, that’s what the person thinks it’s worth, that they’re gonna spend four and a half million dollars or $30 million, which I’ve done before, they’ve got the cash and there’s no one stopping them from doing that” 13:50

It’s great to teach kids lessons but if you think OK my teaching that lesson that they’ve gotta save the deposit and get there and it’s gonna take until they’re in their thirties, maybe forties, well that’s a lesson that is probably going to really hurt them later on in life” 20:46

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