Is property market going downhill?

[AHwee]

Seems like we are hearing more and more of negative news about the property market these few weeks. Government seems determined to stem the rise of house prices esp in the big cities this time round and rightly so as the nation's economy does not justify house prices increment at all.

Going to open houses in Melbourne ' s surburbs, I have sensed that less people are viewing them and talking to agents, it seems vendors are also more likely to give discounts.

Perhaps this time round, house prices will really decline?

 

[oc1]

Yeah, 50% drop on the cards for sure. How dare house prices rise.

 

[Rolf Latham]

Government seems determined to stem the rise of house prices esp in the big cities this time round and rightly so as the nation's economy does not justify house prices increment at all./QUOTE]

challenge with all that is that our housing market is now based on a more global economy.

The exodus of cash from frigid foreign economies is partly choosing Oz real estate as a home


ta
rolf

 

[A Jeremy]

I'm looking forward to the drop in demand producing more of a buyer's market.

Also, it will reveal who the 'investors' are and who are the real investors. No ill will to the 'investors' as I want everyone to succeed but hopefully we can see which strategies remain through the tougher conditions and how people adapt their strategies as a reflection of the economic climate.

 

[Bunlee]

Is property going downhill?

Some is, some isn't, just like the share market when negative sentiment comes in, some shares go downhill and some go up. Positive sentiment in the share market, some go up some go down.

We have had a good run the last 18 months or so in Sydney property, it can't go into perpetuity like this and things will change at some point. I personally think there is more to run but you never know.

In the end, the short term shifts are largely just 'bananas' for those that invest in shares and property with defined goals and a long term view.

It is possible that the last 18 months has resulted in my net property wealth going up in excess of $500,000 or so, I don't really know or will ever know but it hasn't changed my life in any way other than on paper, a shift in the other direction would have the same impact on my life.

If times get tough the lessons get demonstrated for us all, ie;

- it is a long term game
- focus on goals
- buy quality and well positioned
- fund it appropriately
- put it in an appropriate context in the scheme of our lives

Sure, velocity of returns is an important concept but I am not in the game of picking where things are going in the short term. I do know that I can have my money in Super and outside of super and there are 4 main areas to invest, ie, property, shares, cash or fixed interest.

I choose property and shares which are long term games for me - I structure my thinking, funding and portfolio with the goal to stay in the game as it is a long term gig.

Uphill, downhill or whatever are just short term parts of the cycles that can present opportunities, force us into decisions or whatever. Investors know that this part of the game and accept it.

If there is a bit of negative sentiment in the property market it is perhaps not a bad thing but in the long term I feel that owning your own home and buying well located, funded and quality property for investment will be the path to increased choices in life.

Sorry about the long post all

regards

 

[Rolf Latham]

Sure, velocity of returns is an important concept but I am not in the game of picking where things are going in the short term. I do know that I can have my money in Super and outside of super and there are 4 main areas to invest, ie, property, shares, cash or fixed interest.

Sydney as an eg had no velocity between 2002/2003 and 2012............ so its obvious that a little catch up may be required.

I cant remember any time at all in history where the growth or decay of an asset class was linear.

ta

rolf

 

[datto]

Yeah I agree that property, well mine at least (Sydney west/south west) has been pretty much stagnant for many years and this is just a catch up.

But man. what a catch up! lol....it might over shoot coz I'm still seeing big turn outs at open houses and they're selling fast.

 

[The Fence]

Government seems determined to stem the rise of house prices esp in the big cities this time round and rightly so as the nation's economy does not justify house prices increment at all.

Why does it have to justify anything?

Demand is outstripping supply. Simple.

No need to complicate things.

If the Govt wants to get involved how about releasing more land (supply)?

 

[Deltaberry]

Reckon all the Chinese and Americans buying at 86c Aussie care about the nation's economy?

 

[gronk007]

I don't understand why the question is being asked the way it has; and given the amount of views and replies it has received the remainder of the forum probably shares that insight on such a generalization of insight.

 

[scha9799]

I can't see any sign of slow down in western Sydney.

I am so frustrated to get any deal.

Every offer I put in, the agents just never call me back, I have to follow up with them, only then I can find out it's sold to someone putting in much higher offer than me.......

 

[chilliblue]

I can't see any sign of slow down in western Sydney.

I am so frustrated to get any deal.

Every offer I put in, the agents just never call me back, I have to follow up with them, only then I can find out it's sold to someone putting in much higher offer than me.......

Interesting.

I have had 3 separate agencies from South West Sydney call me up as I was on their books from 2-3 years ago to see if I had any interest in purchasing property.

 

[miss green eyes]

Interesting.

I have had 3 separate agencies from South West Sydney call me up as I was on their books from 2-3 years ago to see if I had any interest in purchasing property.

But west sydney and south-west sydney are different areas.

I don't know why the west is more popular, both for sale and rent, but it is.

 

[Dbz_Vic]

I can't see any sign of slow down in western Sydney.

I am so frustrated to get any deal.

Every offer I put in, the agents just never call me back, I have to follow up with them, only then I can find out it's sold to someone putting in much higher offer than me.......

Probably mean you should stay away from that market unless you are emotionally attached to a ppor you want to buy.

A slowdown or correction is expected because that's how it has always been. There are also markets among markets so a slowdown somewhere doesn't mean it's across the board.

 

[my03]

Western sydney market is definatley hot at the moment. Went to a few opens as I happened to be in the area. 10-20 parties in each inspection, all properties presented well, in St mary's, north st marys and oxley area, High 400's to low 500's asking price. I expect them to be under offer within the week.

I'm just a newbie keeping my eye open, but it seems like 85% of advertisments are under offer. They're not on the market for long thats for sure.

 

[Dbz_Vic]

Western sydney market is definatley hot at the moment. Went to a few opens as I happened to be in the area. 10-20 parties in each inspection, all properties presented well, in St mary's, north st marys and oxley area, High 400's to low 500's asking price. I expect them to be under offer within the week.

I'm just a newbie keeping my eye open, but it seems like 85% of advertisments are under offer. They're not on the market for long thats for sure.

Not always, some properties have been sold months ago and the adverts still float around. I absolutely hate it when agencies do this. It happens everywhere and it's a marketting tool, just like how some agents leave their SOLD signboards in front of properties for ages forcing people to hack it or throw it across the road.

On western syd a mate of mine have been making offers on properties and each time sold for a lot higher than asking price. Underquoting is rife and definitely a seller's market, I would stay well away if you don't want to overpay.

 

[ndonnelly]

Is property going downhill?

Some is, some isn't, just like the share market when negative sentiment comes in, some shares go downhill and some go up. Positive sentiment in the share market, some go up some go down.

We have had a good run the last 18 months or so in Sydney property, it can't go into perpetuity like this and things will change at some point. I personally think there is more to run but you never know.

In the end, the short term shifts are largely just 'bananas' for those that invest in shares and property with defined goals and a long term view.

It is possible that the last 18 months has resulted in my net property wealth going up in excess of $500,000 or so, I don't really know or will ever know but it hasn't changed my life in any way other than on paper, a shift in the other direction would have the same impact on my life.

If times get tough the lessons get demonstrated for us all, ie;

- it is a long term game
- focus on goals
- buy quality and well positioned
- fund it appropriately
- put it in an appropriate context in the scheme of our lives

Sure, velocity of returns is an important concept but I am not in the game of picking where things are going in the short term. I do know that I can have my money in Super and outside of super and there are 4 main areas to invest, ie, property, shares, cash or fixed interest.

I choose property and shares which are long term games for me - I structure my thinking, funding and portfolio with the goal to stay in the game as it is a long term gig.

Uphill, downhill or whatever are just short term parts of the cycles that can present opportunities, force us into decisions or whatever. Investors know that this part of the game and accept it.

If there is a bit of negative sentiment in the property market it is perhaps not a bad thing but in the long term I feel that owning your own home and buying well located, funded and quality property for investment will be the path to increased choices in life.

Sorry about the long post all

regards

Sometimes I wonder if all investors entering the market have this mindset. I am no expert by any means but I would assume that everyone knows that buying now means very low yields so capital growth is the key. If you were a a baby boomer looking to retire soon or already retired and ploughed some serious cash into a property only for the value to stagnate for possibly many years after this boom ends how long can you afford to hold onto it? I think alot of people just assume a property of any kind will be a golden ticket. The way it gets marketed sometimes I can hardly blame them.
So say this baby boomer and many like him decide to offload this property after a few years due to lack of growth. Its not like there are no buyers out there as all the people looking to buy a PPOR come to the fore. So how hard could prices fall in this scenario? Would that not just cushion any kind of fall? Are the gains they have already made from a PPOR probably bought 30+ years ago enough to just keep holding.
I guess it could be a viscious circle as renters would now look to buy and landlords would have fewer tennants and rents would become even lower which might also encourage selling.
I suppose a real downturn in the economy and high unemployment could be a fatal blow. Rents go down, yields go down then there would probably not be any buyers and many sellers.

 

[AHwee]

Property market going downhill

Although i wish house prices can drop and cool a bit, and i do feel it might, it may not last long.

The main reason is Australian properties, especially those in melbourne and sydney has been so exposed to foreign buyers that local economic performance or government rulings will have little influence over certain segments of the property market.

I was in Singapore last week. Flipping through the local newspaper on a Saturday, i noticed at least 5 advertisments, 2 of them full pages, marketing Melbourne apartments. Few people would have taken much notice of these apartments back home here. But they are highly marketed there with eye catching captions like "take advantage of low AUD", "get Loan at Interest of 3% per annum (if borrow through Singapore banks), "migration specialist on site" etc etc..

I reckon these catch phrases/strategies are also used in the marketing of similar apartments elsewhere in Asia like in Malaysia and China. And i will be attracted to at least attend one of their seminars if i am a local and i have some spare cash. After all, i am buying a piece of housing in the "worlds most liveable city" and i cant be that wrongly, right?

Obviously, buyers of such apartments are oblivious to the conditions in australia. They bring in foreign money and might have paid lower Interests to get a loan. And their buying, no doubt, would have supported the local housing market.

With now AUD get thing cheaper, i think that will only motivate more foreigners to buy up properties in melbourne and sydney. The main victims will be the young locals who might take forever to afford buying a new home...

 

[Melbournian]

yeah the singapore banks can give 1% on their home loans geared in SG dollar or Aussie Dollar or malaysian ringgit or US dollar.

Makes it high attractive to invest being if they buy in singapore (2nd investment etc - there is an additional charge on top for these so it makes speculation more difficult).

 

[D.L]

Just a thought about foreign buyers... aren't they only allowed to buy new properties in Australia, and therefore really mostly driving up the new property market? So with the established property market, isn't it really mostly locals driving up the established market (rather than the easy-to-push-blame-to foreign investors)?