6 Month Forecast.

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From: Peter Davidson


What are peoples forecasts over the next 6 months for houses in Melb and Syd: Choose one:

1. Property will stabalise and remain where is
2. Property will rise
3. Property will fall

I have been hearing that there will be another boom after Xmas, as there will be a shortage of stock again. Then there are others who say there will be a 15-20% bust. Your inputs?
 
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Reply: 1
From: Michael Croft


Peter,

The big picture is emerging (and being kept quiet) after the election. Unemployment is expected to hit 10% by the end of 2002. The budget "surplus" would appear to be non existent.

This leaves the blunt instrument that is interest rate policy to battle the economic woes befalling the world and hence Australia.

I am an optimist and things ain't looking so good for the next 6 - 18 months - perhaps real buying opportunities will start to emerge. If you couple; the known over supply of units, a 10% unemployment figure and an empty war chest ......................

Michael Croft
"The best parachute folders are those who jump themselves."
 
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Reply: 1.1
From: Travis Boutses


I personally think that a LOT of people are cashed up at the moment and believe again that houses will boom(another 5-10%) after Xmas, perhaps then slowing down again late 2002, especially if there is a shortage of stock. So my prediction, UP!
 
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All cash up and nowhere to go?

Reply: 1.1.1
From: Michael Croft


It may be that the next 6 months will bring a flurry of buying activity from newbie investors and homemakers alike - I hope so as I've delayed a whole heap of revaluations ;^)

The fundamentals aren't looking so good past the short term (six months), so perhaps they'll be all crashed up with nowhere to go? Especially those inner city apartment late comers.

Michael Croft
"The best parachute folders are those who jump themselves."
 
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Reply: 1.1.2
From: Yuch .


I think the shortage is only temporary and the market is driven by greed at the moment. Everyone is trying to make some money from property 'coz it's booming. And with the number of new properties being built in the past 2~3 years, the result is the vacancy rate increases due to over supply. We just don't have large enough the population to fill into all our existing properties and new properties.

Some people believe that property market will never fall, it only goes Up, Up, Up. If the market was to keep going up, that means the rent would have to follow to make the investment sustainable. At the moment, the yield for most of the Sydney suburbs is about 3%; about 5% for out west suburbs. And the rent can only rise a certain point, as people's salary does increase as quickly as the property prices. However, the high vacancy rate will only lower the rent even more!

In conclusion, we have a few issues in our current market that would prevent the market from going up further:

1. Properties over priced
2. High vacancy rate
3. Job market is very flat, employers not
willing to pay good salary
4. Increasing unemployment rate

I would say that it's about time to pick up some bargains in a few months time!!!

Regards
yuchun

~ The secret to success is to start from scratch and keep on scratching. ~
 
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Reply: 2
From: Colin Mills


Down she goes.....for Sydney anyway. As documented by me on this very site my rents have dropped by 20% in the last 12 months. This is not some statistic you read about in your daily rag - this is real life! I suggest you take it on board. Based on current value that gives me a rental return of a paltry 3%! Thats the lowest rental return since I bought them over 14 years ago.
Something has to give - rent or price or a combo. My take is price - rents are still dead around the North Shore at the moment at least in the rental bracket I operate in (over $500 pw)
If we accept Sydney prices topped out in August then I'll be hopping on a plane sometime around next winter on a buying trip. I'll be looking to pay no more than 80 to 85 cents on the dollar price from last August.
PS Am I the only one on this site that has noticed a whole swag of nervous-nellies posting comments and forecasts just lately about what may happen to property prices??? These people represent a new generation of property investors that only know (or thought they knew) that property prices can only move one way. These first time investors are the exact mugs I'll be looking to buy from next year.
 
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Reply: 2.1
From: Travis Boutses


Yes Collin. I am a newbie who has been watching the market for 3 years anticipating a fall. To buy something now that I wanted three years ago, I would need to pay double! There's no "real" sign of a slowdown, is there? Just people being negative in the hope that prices will drop to pick up a bargain. Frankly, I'm sick of waiting in the anticipation that property will fall. I've waited for 3 years and I'm now off to the bank.
 
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Reply: 2.1.1
From: Neil Iffland


I remember reading this doom & gloom stuff this time last year & hence putting off the purchase of an IP in Sydney's inner west.

Everyone was talking about all the bargains that would be coming up in 2001.

I missed out on some nice capital gains waiting for the price falls to eventuate.
 
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Reply: 3
From: Rolf Latham


Hi Peter

No crystal ball but a quick sanity check on the numbers.

20 % of the median at around 350 k means the median price would fall by 70 k to 280 k.

Possible, but odds would be reeeeeeeeeeal long for this I feel, regardless of how unwell the economy becomes short of depression.

Rolf
 
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Up and Down

Reply: 4
From: Brett Burt


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Sydney and environs up 10 to 15 %. Melbourne flat or down 5%. A bit of =guesswork here. Just keep buying.

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Sydney and environs up 10 to 15 %. Melbourne flat or =down 5%.
A bit of guesswork here. Just keep buying.

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