Another way to look at it, is the risk reward ratio. You are dealing with a leveraged instrument, meaning the returns are magnified, but so too are the losses. Is it time to expose yourself to this risk, and is the potential reward worth the risk if you are realistic about potential gains that might be experienced in the market over the next few years?
I would also consider how you would feel if the gains you have currently made on paper were to evaporate in the space of the same time they were made and not return for a few years. Over that time it may become positively geared, but will the earnings be comparable to have just sold now and gone to a 36 month term deposit? No one knows the answer to this question, but the latter is the more conservative, less risky approach.
There are potential catalysts that could bring down demand for property, even in Sydney, putting both prices and rents at risk of stagnation or retracement. Fewer os students, loss of manufacturing and finance sector jobs, baby boomer retirement wave, a short term collapse of demand from china for our resources, through to basic market psychology, where something that has gone up for almost a generation, that people don't quite know what to do when the music stops. I don't claim to know what will happen, but the reward sure better be worth hanging around to find out.
