Is the high end of Sydney at risk of a serious correction?

[Highlygeared]

The $1m plus market in Sydney - East/North Shore/Inner West reminds me of 2002 all over again. Coupled with very low supply and pent up demand, prices are just going through the roof.

No doubt in my mind that these buyers are predominantly professionals that have benefited either indirectly or directly from the fin market.

I'm looking to buy a PPOR in either the East/North Shore. Does the forum think if a recession hit, or the sharemarket tanked (the same thing really), that prices may be in for a major pullback say 20-30%? Anyone on the forum seen this happening in the last 20 yrs in prime, blue chip suburbs. I'm not talking necessarily about Point Piper here, more like Randwick, Pymble, Roseville, etc.?

At present, withdrawing every inch of equity I have in IPs in preparation of capitalising on a bargain if things go bad. Got my fingers crossed.

 

[Harris]

The $1m plus market in Sydney - East/North Shore/Inner West reminds me of 2002 all over again. Coupled with very low supply and pent up demand, prices are just going through the roof.

No doubt in my mind that these buyers are predominantly professionals that have benefited either indirectly or directly from the fin market.

I'm looking to buy a PPOR in either the East/North Shore. Does the forum think if a recession hit, or the sharemarket tanked (the same thing really), that prices may be in for a major pullback say 20-30%? Anyone on the forum seen this happening in the last 20 yrs in prime, blue chip suburbs. I'm not talking necessarily about Point Piper here, more like Randwick, Pymble, Roseville, etc.?

At present, withdrawing every inch of equity I have in IPs in preparation of capitalising on a bargain if things go bad. Got my fingers crossed.

Dont hold your breath expecting the top end of the market to tank just beacuse it seems unaffordable.

Melbourne's top end of $1m+ had been unaffordable for a while after peaking in 2002, yet the market for the past 18 months has been on steroids and still going strong with historically high increase in values in any 12 month period.

The perception of affordability gets a new meaning all of a sudden when say a prop selling for $1.6m in kew (inner east melbourne) on 870 sqm 18 months ago appears quite affordable and cheap (relatively speaking) back then compared to over $2.8 mill in todays market.

Back in 2002, we had threads in Somersoft with naysayers predicting the top end to tank by 40%... Not only that it didnt tank, but it gained another 50% on average from the hey days of peak pricing in 2002..!

You might be waiting for a while if you are expecting to pick bargains at the top end of the market..!

Harris

 

[Ross]

Highlygeared

Id have to agree with you that certain parts of inner Sydney have seen some decent growth in the last 12 months, like Lane Cove where we were looking for a PPOR......not much good stock coming on the market to meet demand.
Now looking at buying "in-laws" property in Abbotsford for close to the $1M mark......difference here though is that it was valued at $1.2M back in the 2003 peak. All my research indicates pent up demand is about to push prices again soon. Abbotsford projected growth from various reports is 10% for the next year.

Ross

 

[asdf]

Pent up demand is continuing to push prices upwards in these sought after suburbs. Interesting that a lot more people are actually out looking for PPOR with very LIMITED supply. If we had a recession, will it lead to a correction? Dunno but only trigger I can see is 20% unemployment rate in the IT, finance and consulting industries. Seachange mentioned on Monday night that he saw price of one mansion in Pymble sell for over $1M in 1990 only to have it change hands again 6 years later for $660k odd. $1M back in 1990 bought you a very nice property. I know of a 3 storey glass house on the side of a cliff with infinity spa, pool, sauna, massive bed rooms all overlooking Freshie which was bought for $1M in 1993. It would be worth $4-$5M now.

 

[ari gold]

ross we have been looking at lane cove for a nice renovator and we see lots of potential,next six months should be very good to lane cove.

 

[Ross]

Yeh both Lane Cove and Abbotsford are tipped to join the million dollar median club next year !

Ross

 

[equitymate]

White collar times are good...
overhire, overfire...

 

[Jacque]

Yeh both Lane Cove and Abbotsford are tipped to join the million dollar median club next year !

Ross

Lane Cove's already there with a median house price of $1.006m (Residex)

I like LC and surrounds and have seen prices move upwards in the last 12 mths- definitely not downwards. There will always be case studies of anomalies where properties go backwards but resales since 2003-04 in these areas of Sydney's NS have proved otherwise in the majority of cases.