How do you see Sydney's Western Suburbs Growing into next year?

[vaughan]

By the way, who would have thought property price in Sydney in 2013 & 2014 are totally different from 2011 & 2012 !

This. +1

Keen observers will also report that rent has not gone up over the period, and in fact may be softening. That is, 2011: property worth $200k, rent $320 pw. 2014: property worth $400k, rent $320 pw.

Nowhere near the same yield, yet savvy investors are snapping them up.

 

[DaveM]

Yields are right down compared to current sale prices, and investors still going nuts.

I forsee a lot of sell off over the next 3 years for the reason above... investors getting into a hot market at sub 5% yields "before they miss out" in the hope of continued crazy CG growth, and after a couple of years of haemorraging cash and CG tapering off, chucking it it in and cutting their losses.

If I had a USB crystal ball, I would suggest the market is close to peak with a spring/summer market to run, and then it will quieten down. If you were wanting to cash in some chips next few months would be a good time.

 

[scha9799]

I thought I might always share what my on the ground experience.


Last Saturday, I went to open house inspection in Mt Druitt area. The house is asking "over 399,000". The rental return is $300+$200 = $500 ( with a one bedroom granny flat). rental return looks ok.

I had a bit of chat with the agent, and couldn't help myself made an off $425,000......... I turned around got back to my car......I thought hand on a sec, this property only sold around $200K back in 2011/2012. Also people would be considered paying too much if they paid above $250k back in 2011 / 2012............ if you lucky, you could even paid around $180K for it.

What happened here ??

I made an offer for $425,000 and the agent said someone already put in the higher offer !!! ( the agent didn't disclose the final offer price, but I think somewhere around 450,000- 460,000 mark)

I started to wondering.... was this happened back in 2003/2004 ?? People have gone too crazy about this property party and didn't want to be missed out, only later in 2005/2006 found themselves with can pay cheaper price to the similar type of property....
( Disclaimer: I didn't actively invest any property back in 2003-2004, I only remember some of my close friends and relatives were talking about the property market back in 2003 - 2004)


I thought good time to buy is when one is financially ready to buy, not because of the media.......

I hope I have a crystal ball can see what's going to happen next year........

 

[TMNT]

Yields are right down compared to current sale prices, and investors still going nuts.

I forsee a lot of sell off over the next 3 years for the reason above... investors getting into a hot market at sub 5% yields "before they miss out" in the hope of continued crazy CG growth, and after a couple of years of haemorraging cash and CG tapering off, chucking it it in and cutting their losses.

If I had a USB crystal ball, I would suggest the market is close to peak with a spring/summer market to run, and then it will quieten down. If you were wanting to cash in some chips next few months would be a good time.

yes I totally agree, its simply not sustainable,

the fundamentals arent there either

Im just curious, whether we will see a an actual fall, or a complete plateau for 3-5 years or be minimal growth

This attitude of not wanting to miss out near the end of the cycle is why the average investor wont do as well as the ones who "buy in gloom, sell in boom"

 

[TMNT]

I thought I might always share what my on the ground experience.


Last Saturday, I went to open house inspection in Mt Druitt area. The house is asking "over 399,000". The rental return is $300+$200 = $500 ( with a one bedroom granny flat). rental return looks ok.

I had a bit of chat with the agent, and couldn't help myself made an off $425,000......... I turned around got back to my car......I thought hand on a sec, this property only sold around $200K back in 2011/2012. Also people would be considered paying too much if they paid above $250k back in 2011 / 2012............ if you lucky, you could even paid around $180K for it.

no offence, but you are doing what every amaeture investor does, you are competing with the masses, because it feels safer for you (and it probably is)and you are overbidding/paying for the fear of missing out

 

[macca446]

I think things will be quite hot over the spring summer months as well,but my feeling is once rates start to go up and they will it will be the game changer there,I purchased one of my properties in western sydney in 2005 189k the previous buyer paid 256k in 2003 top of the market.
Macca446

 

[Tenex]

According to every spuiker who wants to sell you some property in western Sydney, the property price are going up and up, not only next year ,but also every following year. You need to buy "this one" which they prepare earlier.


According to me, honesty opinion, I really have no idea how to make the duplex number work for the above areas you mentioned in today's market.


I really wish those spuikers are correct. Because we all want our property value in the western Sydney as good as the eastern Sydney, don't we


By the way, who would have thought property price in Sydney in 2013 & 2014 are totally different from 2011 & 2012 !

I am not set on those suburbs, they are just more of a starting point for me.

You are right but in any case there are suburbs with good potential. For examples the reason Ermington sky rocketed was that the next suburbs Ryde was already too expensive and people moves slightly towards west. Add to that the fact that Parammatta has become the second CBD.

I think Sydney still does have potential, the questions is where and why.

 

[Tenex]

Yields are right down compared to current sale prices, and investors still going nuts.

I forsee a lot of sell off over the next 3 years for the reason above... investors getting into a hot market at sub 5% yields "before they miss out" in the hope of continued crazy CG growth, and after a couple of years of haemorraging cash and CG tapering off, chucking it it in and cutting their losses.

If I had a USB crystal ball, I would suggest the market is close to peak with a spring/summer market to run, and then it will quieten down. If you were wanting to cash in some chips next few months would be a good time.

Very good point, at the moment market is close to peaking and also the time of the year is not right.

 

[datto]

Scha9, keep up the good work buddy! . I've got a property out there and I adore forward thinking investors. Yep, cheers...lol...look at that dollar meter spin...ain't it lovely..

 

[WattleIdo]

I think things will be quite hot over the spring summer months as well,but my feeling is once rates start to go up and they will it will be the game changer there,I purchased one of my properties in western sydney in 2005 189k the previous buyer paid 256k in 2003 top of the market.
Macca446

My question is: How long will 'game over' last?
I suspect there'll be a 2nd wave of investors who've been holding back and then will go in for a feed.
It's not over 'til the fat lady sings.

 

[ZachAnSel]

Scha9, keep up the good work buddy! . I've got a property out there and I adore forward thinking investors. Yep, cheers...lol...look at that dollar meter spin...ain't it lovely..

Dunno it is time to celebrate or empathy, bit oh booth I guess. We have two ips that will be auction March next year. Mean while my friends excited to purchase.

Personally I think mid/end next year, we will see the price peak. So if you are builder, the question is can you sell it top dollar before that?
Or sell it by 2017/18 when the blood bath happens.. Yeeehaaa, can't wait that time. Hows help me celebrate by sharing KFC matey????

 

[travelbug]

My question is: How long will 'game over' last?
I suspect there'll be a 2nd wave of investors who've been holding back and then will go in for a feed.
It's not over 'til the fat lady sings.

No crystal ball but here's my 2c worth.

Some are predicting another rate cut early 1015. If that happens we may get another little surge. Then I think it's all over.

2019 will see newby's selling as interest rates get back to normal. There are always first time investors in every boom. They don't do any research, they just know they "have to buy property because everyone is doing it". If interest rates rise to 7.5% means a 50% increase in mortgage payments. That's going to hurt. "they" see property going up 10%+ per year and think that is the place to buy. Then reality hits.

90% ( or is it more) only have one investment property. Many more buy one and sell it because it "doesn't work". We are going to meet some of these in the next "buyers market".

Get your finances sorted guys. I'm going to be ready.

 

[datto]

Hows help me celebrate by sharing KFC matey????

Your shout, it's on!

 

[Tenex]

Interest rates cant go that much higher that fast. Not to mention many will have their rate fixed for 2-3 years.

At the end of the day the jump-start of property market in Sydney is asian money, not everything is about them but they are definitely driving the market. Interest rates are just the icing on the cake.

The big question will be when their interest in the market take a dive than when interest rates go up or down. Their money is not subject to our interest rates.

 

[my03]

You guys are talking about 2018/2019 when reality hits, that's 4 years away...if the market is anywhere as near as it has been recently, there's still room to grow.

If the market does correct in 2018/2019, are we really going to get prices back at or below today's levels?

 

[macca446]

You guys are talking about 2018/2019 when reality hits, that's 4 years away...if the market is anywhere as near as it has been recently, there's still room to grow.

If the market does correct in 2018/2019, are we really going to get prices back at or below today's levels?

I think it will happen before this,4 years is a long time much changes so quickly I have nearly sold all my western sydney stock for me just cashing up and moving on .

 

[Newbieatlife]

Interest rates cant go that much higher that fast. Not to mention many will have their rate fixed for 2-3 years.

At the end of the day the jump-start of property market in Sydney is asian money, not everything is about them but they are definitely driving the market. Interest rates are just the icing on the cake.

The big question will be when their interest in the market take a dive than when interest rates go up or down. Their money is not subject to our interest rates.

Have you got stats to prove paragraphs 1 and 2?

 

[Tenex]

Have you got stats to prove paragraphs 1 and 2?

How many times reserve bank meets to review interest rates per year? By what increments do they normally increase the interest rates? Are people not able to fix their rates for 2-3 years? What stats exactly do you expect to see?


Onto the second paragraph, I suggest to speak to REAs. There is absolutely no denial that asian money has been a great driver behind the current prices. You dont need stats for this and there is no accurate stats to actually reflect this any way.

 

[Newbieatlife]

How many times reserve bank meets to review interest rates per year? By what increments do they normally increase the interest rates? Are people not able to fix their rates for 2-3 years? What stats exactly do you expect to see?


Onto the second paragraph, I suggest to speak to REAs. There is absolutely no denial that asian money has been a great driver behind the current prices. You dont need stats for this and there is no accurate stats to actually reflect this any way.

I would like to see stats on the percentage of people who actually do fix rates even during rate rises. And you would be delusional to expect banks to keep their fixed rates low even at the faintest whiff of a rate rise.

Oh right, REA's - the beacon of all unbiased real estate information. A recent article suggests only 1 in 6 properties are purchased by foreign investment which accounts for less than 20% of all purchases - and most of these are brand new/off the plan properties. I don't see how this is "driving the market" - maybe the Eastwood market?

Or are you talking about Australian purchasers with an Asian background/appearance?

 

[travelbug]

You guys are talking about 2018/2019 when reality hits, that's 4 years away...if the market is anywhere as near as it has been recently, there's still room to grow.

If the market does correct in 2018/2019, are we really going to get prices back at or below today's levels?

What do you mean by "when reality hits?"

I think it will slow down before mid 2015, end 2015 at the latest.

What I'm talking about is when it's a buyers market.

No I don't think prices will drop to before the current boom prices. But there will be some bargains (as there were in 2008 when buyers were scarce).