Are the planets really in line for a strong growth in medium term?

Are the planets really in line for strong growth in medium term?

Some pundits suggest with increasing int rates and more to come early next yr that now is an even more compelling time to buy, particularly in Sydney, citing more of a buyers market with int rates going up, chronic undersupply of housing and resultant effect on rents (which has been talked about ad nauseum on this forum).

If you believe recent anecdotal opinions from 'gurus' such as John Edwards, Michael Yardney and others, you'd assume now's the time to separate the men from the boys so to speak....with those with nerves of steel and a good eye for picking well located properties at the 'right' price standing to make a killing in the next boom.

Does anyone actually agree with this? The market in better suburbs in sydney has had a bit of a run up over the last 12 months...actually quite significant, I would say, 10-20% from the lows of 2004. In fact, I would say we've had a boom of sorts...again.

Are we in a for a crash in housing prices sometime soon? Is now the time to be taking more risks, rather than less within reason of course, if one has a 'long term' view.
 
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I personally don't like to base everything on trends or even boom suburbs etc for that matter.

Individual deals are more important. Locating a property that has some potential relative to others in that area and that fits into your current portfolio and investment plan should take more precedence than trying to pinpoint the exact time to buy. For me it's always a good time as long as the individual deal makes sense ;)
 
To hard to say with Sydney as it covers such a large area! There are mini cycles in different areas, for example epping to chatswood with the new rail line is seeing 10%+ growth p.a at the moment. I have experienced this with nth ryde and macquarie park investments..

Yet other areas are still as slow as ever, especially the outer suburbs, and the higher end of the market has its own cycle and is growing strong, such as mosman, seaforth, vauclose, point piper etc.

So best to judge each area with it's own merits, including constantly keeping your eye on the area you think is best and being reactive to auction clearances / sales etc. IF i was to be proactive about investing in Sydney, personally, would be jumping in the boat from next March onwards, but this is being very general. Too many good value purchasing in melbourne and brissy still to warrant it for me.
 
I personally don't like to base everything on trends or even boom suburbs etc for that matter.

Individual deals are more important. Locating a property that has some potential relative to others in that area and that fits into your current portfolio and investment plan should take more precedence than trying to pinpoint the exact time to buy. For me it's always a good time as long as the individual deal makes sense ;)

couldn't agree more... if a deal stacks up then do it

as for moons lining up, it's hard to see - I wouldn't be buying any old thing on the hope that the general market will carry you up
 
I see some areas getting RELATIVELY cheaper than others in Sydney. I ask myself: is that likely to be a long term trend? Or will that snap back?
Alex
 
I personally think that Sydney is correcting still in areas. And I think that when the time is right, rather then prices snapping as in the last boom, we will see good, gradual growth for a few years! Im basing this opinion on people being burnt at the top of 03/04 and learning from it :p But you never know
 
Heard a neat saying in regards to trends & tops - 'probably'. Its so hard to pick tops/bottoms so why bother. Just get it about right & concentrate on the deal in front of you.

Is the stock market toppy - probably
Is it a good time to buy RE - probably
Will interest rates stay highish - probably
Is Sydney on the way up - probably
Will inflation continue - probably
will deflation occur - not likely
Will the Wallabies win the next world cup - probably
Will the RE market collapse - not likely
Will the mining boom continue - not likely
Will the aussie dollar fall - probably
 
chatswood to epping

To hard to say with Sydney as it covers such a large area! There are mini cycles in different areas, for example epping to chatswood with the new rail line is seeing 10%+ growth p.a at the moment. I have experienced this with nth ryde and macquarie park investments..

Yet other areas are still as slow as ever, especially the outer suburbs, and the higher end of the market has its own cycle and is growing strong, such as mosman, seaforth, vauclose, point piper etc.

So best to judge each area with it's own merits, including constantly keeping your eye on the area you think is best and being reactive to auction clearances / sales etc. IF i was to be proactive about investing in Sydney, personally, would be jumping in the boat from next March onwards, but this is being very general. Too many good value purchasing in melbourne and brissy still to warrant it for me.

I fully agree, prices in Lindfield, Roseville, Chatswood, Willoughby, and to a lesser extent Killara, have been screaming along this last 18 months. I have seen houses sell in Lindfield and Roseville for between $2.2 to $4.6 million, the former for grand Fed homes that need work, and the latter for the same that do not need anything done. Anything with at least 1000sqm of land, pool, master BR with ensuite, formal areas out front, open plan living at the back, attractive paved areas for entertainment, pool cabana, sound system, decent sized kitchen, lots of bathrooms are selling within 2 weeks. Some are silent sales. The market here is ridiculously hot. I do not understand what stage of the property cycle we are in right now, it is confusing.
 
chatswood to epping

To hard to say with Sydney as it covers such a large area! There are mini cycles in different areas, for example epping to chatswood with the new rail line is seeing 10%+ growth p.a at the moment. I have experienced this with nth ryde and macquarie park investments..

Yet other areas are still as slow as ever, especially the outer suburbs, and the higher end of the market has its own cycle and is growing strong, such as mosman, seaforth, vauclose, point piper etc.

So best to judge each area with it's own merits, including constantly keeping your eye on the area you think is best and being reactive to auction clearances / sales etc. IF i was to be proactive about investing in Sydney, personally, would be jumping in the boat from next March onwards, but this is being very general. Too many good value purchasing in melbourne and brissy still to warrant it for me.

I fully agree, prices in Lindfield, Roseville, Chatswood, Willoughby, and to a lesser extent Killara, have been screaming along this last 18 months. I have seen houses sell in Lindfield and Roseville for between $2.2 to $4.6 million, the former for grand Fed homes that need work, and the latter for the same that do not need anything done. Anything with at least 1000sqm of land, pool, master BR with ensuite, formal areas out front, open plan living at the back, attractive paved areas for entertainment, pool cabana, sound system, decent sized kitchen, lots of bathrooms are selling within 2 weeks. Some are silent sales. The market here is ridiculously hot. There has been over double digit growth for any property that is close to the trainl station, and is fully done up. In particular, Lindfield has taken off, especially the pocket between Archbold and thet train line, to a lesser extent, East Lindfield. Roseville has very limited stock, but over $2.5 mil is the norm, and a lot more if the property is really nice.I do not understand what stage of the property cycle we are in right now, it is confusing.
 
Supply and Demand - its a bitc* isn't it? Old dibbies just aren't moving on and there is a stream of wealthy 30 somethings who think nothing of paying ridiculous sums to pick over what is really just bare bones when you look at the available stock. What is $2M to someone who earns $1M guaranteed bonus before even having to start work? The economic prosperity that the top echelon of society is experiencing is nothing we have ever seen. No books have been written about this. We are living it right now, no wonder its confusing.
 
but i think this also proves that with such a large economy there will always be someone wanting good located, good looking property.. so if we can concentrate on purchasing these types of investments, then i don't think we will have problems with CG's being consistent in our portfolios. Especially if the supply / demand issue continues.
 
the exception is during a recession ..
unemployment and slow economic acticity can cause havic even on the upper echelons.. not syaing thats where we are going..
 
I still think the middle to cheaper end hold up better (in terms of rents) even in a recession. After all, people still have to live somewhere. The people renting the move expensive properties trade down, and so on and the bottom fall out into homelessness. That means you still have people wanting to rent your middle to lower-middle IPs.
Alex
 
during last recession in early 90s, median price of higher end suburbs fell more than lower end suburbs .. in the preceeding boom it also went up higher .. there were price histories of various properties in syd high end suburbs in domain section of smh (i.e. history of when and how much they were traded for).. during the recession some high end props were traded nearly 40% below from their trade in the late 80s boom.. i wish i could find the article, ive been looking for it everywhere.

syd, especially the higher end is more linked to global economy than any other area in australia.. hence a slowdown in global economy will hurt syd esp higher areas, than other areas ..
 
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