Corrections in other high demand / low supply markets... (lessons learned)

[qonyx_sydney]

I'm interested if anyone has any links or articles to other high demand / low supply markets like (ie. Hong Kong, London, New York, San Francisco, Vancouver) that could articulate the details of any correction phases that these property cycles go through.

-What was the average percentage decline?
-How long did the downward cycle last?
-Did it ever recover to the bubble prices (if so, how long did it take)?
-What were the key drivers?

Whilst the drivers may be different we should be able to draw some lessons and apply to the Australian property market

Anyone have any links to good articles or whitepapers........?

*deleted post from another thread as it deserves it's own thread
** the markets listed above were merely examples, and is purely my perception on high demand / low supply - if you have others please provide

 

[abdoug]

To add in my $0.02, even though I'm not directly addressing the question..

I see Sydney as most similar to San Francisco from a "desirability" view, its a city that people come to for attractive work options, it has great weather and there's always something to do. It's not "extreme" from a business perspective as London/NYC/HK and nor do I see the property market being as easily heated. From a foreign accessibility perspective, its obviously most similar to Vancouver, where overseas investors quickly inflated the market, albeit I would most likely attribute this to the small VC population + stock compared to the amount of seeking foreign investors. Sydney has a lot of locals but also a freakishly low amount of stock that artificially inflates the impact of foreign investors.

One thing we learnt from the big american/CA cities (ie: NYC, LA, SF, VC, etc) is that even post GFC they were not hit anywhere near as hard as other parts of the country and recovered much quicker. This also happened after the GFC, a pretty huge event!

 

[qonyx_sydney]

To add in my $0.02, even though I'm not directly addressing the question..

I see Sydney as most similar to San Francisco from a "desirability" view

Nice response and i did a bit of digging around on SF and noticed that it hit a peak of ~$800k in 2007 and dropped to hit a floor of ~$600k in 2011 & 2012. Whilst this is a reasonable correction - i would hardly see this as a market crash. You will note that it has since recovered and is touching on $1.1M today.

This gives some relief to the forumites that are in this for the long term and are buying the right property in the right markets.

http://www.trulia.com/real_estate/San_Francisco-California/market-trends/

 

[qonyx_sydney]

Los Angeles

http://www.trulia.com/real_estate/Los_Angeles-California/market-trends/

Peak Median - 2007 - $600k
Correction - 2009 & 20111 - $320k
Current peak - 2015 - $625k

The correction here seems to be more severe and could argue that this would constitute a crash. However it has since rebounded to surpass the prior peak.

Am not close to these markets so not clear of the drivers but i am sure there are some lessons that we can learn through this. So sharing as an FYI.

 

[LeoT]

I'm interested if anyone has any links or articles to other high demand / low supply markets like (ie. Hong Kong, London, New York, San Francisco, Vancouver) that could articulate the details of any correction phases that these property cycles go through.

-What was the average percentage decline?
-How long did the downward cycle last?
-Did it ever recover to the bubble prices (if so, how long did it take)?
-What were the key drivers?

Whilst the drivers may be different we should be able to draw some lessons and apply to the Australian property market

Anyone have any links to good articles or whitepapers........?

*deleted post from another thread as it deserves it's own thread
** the markets listed above were merely examples, and is purely my perception on high demand / low supply - if you have others please provide

IMHO its useless to look at international markets. I believe the best thing investors can do to mitigate their risks and maximise the success of their property investments is to educate themselves on the Australian property markets, understand growth drivers and market cycles, look at ways to buy below intrinsic values ('discount' prices) and look at ways to add further value to the properties they are looking at buying. All those factors when combined will have a much larger impact on the success of someone's portfolio, than anything else, IMO.

Leo