Latest Residex Report - June 2011
- Thread starter Shadow
- Start date
Cliff notes:
- House prices have risen in the past
- House prices will continue to rise (at a lower rate than the last 20-60 years)
Seems unlikely that the 110 year growth table (which is for Sydney only) takes into account average lot size over this time which I imagine has at least halved over 110 years....
- House prices have risen in the past
- House prices will continue to rise (at a lower rate than the last 20-60 years)
Seems unlikely that the 110 year growth table (which is for Sydney only) takes into account average lot size over this time which I imagine has at least halved over 110 years....
Is it my eyesight or are the graphs for unit and house prices for Brisbane and Perth identical in the first link provided by Shadow?
Latest Residex stats are now available here...
http://blog.residex.com.au/2011/07/18/australia-as-a-whole-6
http://blog.residex.com.au/2011/07/18/australia-as-a-whole-6
From the CEO (talk about a backflip from only a month ago):
It's gunna take a miracle for us to see your predicted 'construction boom' Shadow.
http://blog.residex.com.au/2011/07/18/from-the-ceo-5/
It's gunna take a miracle for us to see your predicted 'construction boom' Shadow.
Well, we already have one in Melbourne, but my construction boom prediction was for Sydney to kick off by the end of this year, and in fact the wheels are already in motion...
http://smh.domain.com.au/real-estat...-areas-to-get-13000-homes-20110712-1hbut.html
A gradual beginning, but this is just the start. No miracle needed at all, in the same way no miracle was needed for the Melbourne construction boom. All it needs is the right government policy, but I'm sure a money saving expert like yourself must know that.
Well, we already have one in Melbourne, but my construction boom prediction was for Sydney to kick off by the end of this year, and in fact the wheels are already in motion...
http://smh.domain.com.au/real-estat...-areas-to-get-13000-homes-20110712-1hbut.html
A gradual beginning, but this is just the start. No miracle needed at all, in the same way no miracle was needed for the Melbourne construction boom. All it needs is the right government policy, but I'm sure a money saving expert like yourself must know that.
I agree with you that there is potential for a construction boom in Sydney but it will depend on O'Farrels response to a weakening construction sector.
If the economy gets weaker it is possible the state gov in NSW will further cut their losses and increase greenfield development which was one of his election commitments, going to 50/50 rather than 70/30, i.e. Labor had only 30% of new devel targetted at the fringe (as per the link you provided).
The big one though reducing developer levies has only been tweaked at this stage. The automatic rise Labor had set it at has been passed over by Ofarrel but this is chicken feed compared to if he pares tham back.
It is obscene the amount they charge in Sydney and on the central coast / south coast. It is at the ridiculous situation now that land procurement is now a tiny cost compared to government levies state, federal (GST) and local. OF course less houses are built when this situation happens.
If they roll these back construction will boom and go on booming at lower prices as the cost base is reduced, I don't know this points to higher prices for homes however, only lower once the initial activity spike is finished and the homes are built, could be a few years for this to happen though.
It is possible though that understanding this they go with some form of grant on all homes trying to lift prices rather than push costs down to get construction happening. In the past decade they have opted for the former but prior to that the latter was common and resulted in construction activity but not the price rises associated with urban consolidation policies that have to be wound back if construction is to boom without a rise in prices.
Melbournes weakness IMO is a result of the progressive advantages they gave to new builds with extra grants for new builds only to FHBrs. They were building near twice as many homes as Sydney over the last couple of years, Melbourne so was always going to be the poorer performer once that activity spike washed through.
Would not surprise me if in 6 months Melbourne is listed along with Perth and Brisbane but Sydney, Central and South coasts I do agree are different just due to the complete incompetance of the just ousted Labor government mostly. They could not organise a chook raffle let alone make a conducive enviroment for sustainable development. O'Farrel it seems and his government are different.
Don't forget the million dollar median house price tag that came with that prediction (for Sydney), the median there will have to rise by 50% over the next 3-4 years...
Heh discreet Mr Pollard... or was that Mr Miller, Mr Barton?A gradual beginning, but this is just the start. No miracle needed at all, in the same way no miracle was needed for the Melbourne construction boom. All it needs is the right government policy, but I'm sure a money saving expert like yourself must know that.
Yes, Sydney median house price to approach $1M by end of 2015 as measured by Residex index.
Current median is $668K. An average increase of 8-9% per annum is all that's needed.
LOL, not quite...
Wow, talk about optimism. I wonder where FHBs fit into this dream scenario? Perhaps they'll have to buy in another city and climb the property ladder there before they can sell up and buy an entry level property in Sydney.
If you're doin OK in another city, why would you move and take on another big mortgage? Is Sydney THAT wonderful?
FHBs wouldn't generally be buying a median priced house. You don't usually buy a median priced house as your very first home.
FHBs would buy entry level houses, as they always have done (and continue to do) regardless of median price.
Quite possibly.
I think one of the big issues that we sometimes overlook is rate of increase relative to inflation. We've had much more inflationary times in the past, and at the moment inflation is well under control.
You can buy an entry level home in Sydney for about $200K. Should be affordable for most working people, even if they do rise to $300K.
try that here in WA - that figure is $249k and it's not a very nice ex-state-housing 2 bed flat in the outer bogan rim.
I agree with most of what you said. I think the construction boom will be driven by a combination of higher prices (leading to improved profitability for developers) and reduced government restrictions, which we are already seeing. If the construction boom does result in over-supply after a few years, then prices could fall or flatline for a while.
The July Residex stats are now available here...
http://blog.residex.com.au/2011/08/18/australia-as-a-whole-7/
http://blog.residex.com.au/2011/08/18/australia-as-a-whole-7/
