Get ready for the mother of all property booms!

[eternit]

Anyway, i'm over people saying they are geniuses by predicting the rise in prices where no one could have seen the effects of over stimulus coming.

Are you the type of person who would have a bet on a tennis game for e.g. and says Nadal will win against Federer but at the end Federer wins, so you would say but he only won because he played very well with his forehand, no one could have known that lol

Mate when predicting future whether it be a result of a game or anything else, there are many variables that determine the result, learn to accept defeat instead of saying oh but this only happened because this variable which was not known to anyone etc......

 

[Propertunity]

If the market was left to its own devices we would probably have seen a 10% fall post GFC.

But that's just the thing evand, the RE market is NEVER left to its own devices, the govt. is ALWAYS intervening in it to prop it up - FHOG, FHOB, stamp duty concessions, affordable housing initiatives, etc etc.

The bottom line is that prices went UP in Sydney by over 12% last year and 18% in Melbourne and every indication that I see, points to over 10+% gain in 2010 (at a guess)

 

[ianvestor]

In 1890, the average Sydney home price was $1,446 (£723). If property really does double every seven years then, in 2009, the average Sydney home will be worth $189,530,112.00. (There must be one helluva boom coming in the next 14 months).

Imagine how big that average 1890 property would have been (in hectares!). Now picture that property in the Sydney CBD today... $189m is starting to look pretty good.

 

[MTR]

But that's just the thing evand, the RE market is NEVER left to its own devices, the govt. is ALWAYS intervening in it to prop it up - FHOG, FHOB, stamp duty concessions, affordable housing initiatives, etc etc.

The bottom line is that prices went UP in Sydney by over 12% last year and 18% in Melbourne and every indication that I see, points to over 10+% gain in 2010 (at a guess)

But Propertyunity we don't want to hear this positive news .......take's us outside our comfort zone.

 

[boods99]

gees I would take these numbers with a grain of salt! churchlands up 43% last year?! I would call the whole of the perth western burbs down 20-30%, with maybe 10-20% recovered.

I totally agree...
I would also be interested as to what sort of volume was sold, seems to me that there was probably just a few really expensive properties sold, thus skewing the figures...

Don't you just love the spin that certain people put on things!!

Boods

 

[Jacque]

Maybe it was the only property those people could afford.

Regarding the high participation in OFI's, have you established what type of buyers these people are?

It could be that mum and dad investors have now come out of the woodwork.

Most definitely Bill- it was priced at under $700K (which, for a freestanding house in a quiet street, walk to the train, within the 15km CBD ring is becoming a rarer beast) and some $30K under the current median for this particular suburb, hence the excitement. I'll be watching the auction outcome with obvious interest

Buyers come from all walks - and vary, according to suburb and type of property, naturally. For example, I'm very unlikely to find many investors at $3m North Shore homes whereas units under $500K tend to have a fair smattering of both HB's and investors right now. It's been interesting (but not surprising) to see the no. of investors re-entering the market this year, as so many stayed away due to govt incentives driving the sub $600k price bracket up last year. Momentum really got going between July-Sep, however, as the boost halved and then it was still a scramble for those FHB's finishing up in time for 2010 and their extra $3,500.

BUT.... despite this, there are still FHB's out there who also cooled their heels in anticipation of price drops this year and decided that the artificial stimulation would cool things down a little. Only time will tell if they're correct.

Sydney is a very mixed market, still with wide variations depending on suburb and price range- who knows what is going to happen in terms of growth? None of us. There are no "geniuses" or "gurus" in any investment class, who claim to have the answers. All I can comment on is my property experience and anecdotal ramblings from the field, as with others here who are involved directly in real estate or are serial investors, buying/selling frequently. I do, however, tend to agree with Mark Armstrong (Director of Planning Australia who writes a weekly column in Sun Herald) on two salient points regarding Sydney RE:

1. The earlier you enter the market, the better off you will be.
2. The longer you stay in, the easier it gets.

Sure, there are always going to be exceptions for both of these, and perhaps history will prove such opinions wrong but, in my limited experience of buying RE since 1991, these points ring true. If I didn't believe it, I wouldn't put my money where my mouth is and keep buying property. But I do

 

[Intrinsic_Value]

One comment:
its amazing how many people look at prior performance to validate future returns. A very dangerous strategy.

 

[The_Bludger]

The bottom line is that prices went UP in Sydney by over 12% last year and 18% in Melbourne and every indication that I see, points to over 10+% gain in 2010 (at a guess)

Would have to agree. There is way too much competition for prices to stagnate this year.

 

[Success]

Sydney: Sylvania Waters 53.8%

How does one validate this ? It's unheard of in Sydney unlesss they had one house sold after major renovations ?

 

[Propertunity]

How does one validate this ? It's unheard of in Sydney unlesss they had one house sold after major renovations ?

My data has it growing at 50.3% last year but bear in mind there were only 25 sales in all of 2009 - so statistically it is getting into the dodgy area

The average number of sales seems to be about double that amount in a normal kind of year. Also to be noted is that although the median is now $1.3M it is still not reached the dizzy heights of the last boom year of 2003 when it had 78% growth and where the median was $1.54M on the back of 50 sales for the year. But its on its way back

And, NO, it is not unheard of for this kind of growth in Sydney. TAMARAMA for example had 139.5% growth in the boom year of 2003.

 

[willair]

How does one validate this ? It's unheard of in Sydney unlesss they had one house sold after major renovations ?

Just go with the flow,it's only numbers,and everyone has a different set of numbers..willair..http://www.theaustralian.com.au/bus...mber-quarter-abs/story-e6frg9gx-1225825424881

,

 

[The_Bludger]

just a few comments...
In 88 when we bought our first PPOR rates started rising and our property doubled in less than 3 years. In my experience rising rates have heralded rising prices.

Spot on, rising rates(when they are low) = rising property prices. It's only when interest rates rise substantially and the media makes it out as if the sky is falling is when property prices stall or slow down. But this isn't such a bad thing, because then rents start to climb.

 

[Propertunity]

Just go with the flow,it's only numbers,and everyone has a different set of numbers..willair.

Well it is only averages. You cannot get a growth figure for "Sydney"

For example, Mosman units fell 1.7% last year. Summer Hill units grew 15.3% etc But overall, taken as a region, it grew by whatever %.

 

[willair]

Well it is only averages. You cannot get a growth figure for "Sydney"

For example, Mosman units fell 1.7% last year. Summer Hill units grew 15.3% etc But overall, taken as a region, it grew by whatever %.

Most investors would be able to see the clear differences shaping up,and have a illusion of understanding on how everyone thinks around them
i look at it lkie this in Brisbane,one house on the river on a large block sells for 3 mill plus,2 streets back small early 3 bedroom on a small
block sells for 850k plus,averages mean stuff all ,just a number for various people to play with,,the Australian Media ,understands their audience very well,amateurs write for themselves,professionals are paided very high $$$$ to write for others..willair..

 

[BV]

One comment:
its amazing how many people look at prior performance to validate future returns. A very dangerous strategy.

A very good comment

 

[Propertunity]

....the Australian Media ,understands their audience very well,.......professionals are paided very high $$$$ to write for others..willair..

I totally agree (although I don't know how much they are paid). The standards of what passes for journalism seems to have slipped considerably.

I read an article recently that was such a total cut and paste job that it was really hard to follow the thread of what was being said....in the end I gave up after realising that the person compiling this article was attemping to quote from 8 different sources and trying to get it (unsuccessfully) to make sense.

 

[Sailesh Channan]

As I have mentioned before property prices historically go up following a share market crash. Therefore, what we are seeing is normal cyclic market behavior. What we can also tell from history is that a typical boom lasts three years.

What we also know is that typically Melbourne and Sydney lead the cycle and is soon followed by the other states.