Bubble

[Wandercro]

Been reading this forum for a couple of months and this is my first post. Some great info here and thanks to all that contribute. Would like your thoughts on this questions, but first some related info.

I read an article the other day / week. Can?t remember where but the writer was saying that there isn?t a bubble brewing in Sydney or Melbourne because the bulk of the buyers in these markets were people buying a PPOR. The definition of a bubble was when investors outstripped potential renters, ie the influx of investors increased the price of property, but there were not enough renters to rent all these IP's. This would reduce the rental yield and investors wouldn?t be able to sustain the repayments and bail on the IP thereby creating a crash, bubble pops.

So with everyone heading to Brisbane, myself included, is Brisbane likely to be the bubble and not Sydney or Melbourne?

 

[infocus13]

Been reading this forum for a couple of months and this is my first post. Some great info here and thanks to all that contribute. Would like your thoughts on this questions, but first some related info.

I read an article the other day / week. Can?t remember where but the writer was saying that there isn?t a bubble brewing in Sydney or Melbourne because the bulk of the buyers in these markets were people buying a PPOR. The definition of a bubble was when investors outstripped potential renters, ie the influx of investors increased the price of property, but there were not enough renters to rent all these IP's. This would reduce the rental yield and investors wouldn?t be able to sustain the repayments and bail on the IP thereby creating a crash, bubble pops.

So with everyone heading to Brisbane, myself included, is Brisbane likely to be the bubble and not Sydney or Melbourne?

Not sure where the writer got this info from. Plenty of press earlier this week that investor loan demand has outstripped PPOR loans and has been doing so since mid-2014 (I think). I'm too lazy to find references, but Google is your friend.

Parts of Melbourne are definitely in a bubble when small houses on small (500m2) blocks next to government housing (broken cars and furniture in the front yard, bed sheets instead of curtains) go for $1.2m.

 

[Ausprop]

bubble deniers have many strings to their bow. they include:

- supporting fundamentals
- easier financing
- lack of supply (the x,000 undersupply argument)
- not building houses fast enough
- Asian money will continue to support prices
- people won't sell they will hold out for a price, hence prices won't crash
- there's nothing new under the sun, it's a just a price catch up
- yields support prices
- Australia is different because a,b or c
- it's a great place to live, of course prices will keep rising
- everyone is too hocked up to allow the RBA to increase rates and pop the bubble

just to name a few.

Hard to say Brisbane is in a bubble, hasn't even started its run yet?

 

[Bran]

Aww come on, a bubble in Brisbane?? We've barely reclaimed what was lost post GFC!

 

[Mcqueen]

http://rationalradical.me/2015/06/t...ad-to-have-a-gen-y-perspective-on-the-bubble/

 

[DDDKEFather]

http://rationalradical.me/2015/06/t...ad-to-have-a-gen-y-perspective-on-the-bubble/

As Joe says if they get a better paying job they can afford to buy a place in Sydney.

 

[BayView]

The definition of a bubble was when investors outstripped potential renters, ie the influx of investors increased the price of property, but there were not enough renters to rent all these IP's.

Oh; really?

I was looking for the word; "investors" in this:

https://en.wikipedia.org/wiki/Real_estate_bubble

I saw the words "rental yields" mentioned, but that - in and of itself - is no correlation to anything to do with investor activity - it merely means that prices have increased and rents haven't, and a measurement has been placed on that yield for the sake of analysis.

I bought an IP in Highett years ago, and for the first 2 years there was no rent increases at all, and no CG.

Was I a part of that problem as an investor? No.

Stats can be skewed and manipulated to mean many things, I've observed..

 

[Deltaberry]

Trust me not that many people are going to Brisbane, yet.

 

[hugh72]

Yup, latest monthly figures disappointing again, no bubble action there

 

[Jins13]

As Joe says if they get a better paying job they can afford to buy a place in Sydney.

Funny that Joe can say that when 'his' house is actually owned by his wife in Hunter Hill.

 

[JohnHenry]

Trust me not that many people are going to Brisbane, yet.

That's dangerous.... Because who's going to rent the new OTP apartment units that is being marketed here in Sydney and in China ?

 

[JohnHenry]

Funny that Joe can say that when 'his' house is actually owned by his wife in Hunter Hill.

That's make sense mate, who knows she bought that before she met Joe ?
Or somehow it is written in their prenuptial agreement in case they got divorced

 

[jpcashflow]

Hi

Hello,

Sure are definitely some areas that are in a bubble and in every state you may have areas that are not or in a Bubble.

For me I believe there are three types of bubbles or burst (This is my opinion).

1) New areas: When new estate are developed I always think when people buy into this areas from day 1 they are generally buying overpriced land / building. Example would be Tarniet / Manor Lakes and some parts of Point Cook in Melbourne. The Burst effect is when you see so many homes on the market and not selling or when they get their house valued its usually a bit less vs what they have paid for it.

2) Some investors may jump on the band wagon when they see a area booming, I have always said the best investor buys when no one else wants it at the start. The bubble burst effect may be limited growth or a decline in the area.

3) People getting caught up in marketing spruiks Seeing investors getting burnt buying so called prime property in mining areas and then seeing the same houses on the market for a big a loss.

 

[datto]

I'm from Sydney (suburbs) and there were bubbles in my bath tub this morning. Should I be worried?

 

[Scott No Mates]

Only if they were sulphurous

 

[datto]

Whooo, should be OK then. That Chokito that was floating around also had me worried lol.

 

[Scott No Mates]

Are you sure it was a chokito not a picnic?

 

[datto]

Well it tasted like a Chokito.

 

[Scott No Mates]

Just in case you got hungry, there's a 4 pack of date rolls in the vanity.

 

[datto]

Nah. Hey, there's a chocolate stfarfish.

Look at the time, too late to eat, might upset tum tum.

I think this thread has been derailed long enough. Who cares if Sydneys in a bubble...we're all rich .....yeeha! Lets buy up in Brisbane and create a new bubble there. Eat your heart out APRA...you acrimonious regulator of chocolate starfishes.