Overvalued Sydney Market



From: Louie Langov

Coming from a shares background, i have come to know overvaluation of shares and the following market crash that we are seeing now. The Sydney residential market appears to me to be the same, values are unsustainably high now, since we are reaching the limits people will be willing to pay for rent. Could there be a possibility of a market crash in the Sydney residential market? This may not have happened before, but just follow the logic,

rentals increase
people refuse to pay overinflated rentals
owners discount rentals
property valuations fall
people sell properties to pay for the ridiculous amounts they borrowed
panic follows
market correction
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Reply: 1
From: GoAnna !

What is the usual rental for say a 2 bedroom inner city apartment in Sydney?

GoAnna !
(aka Anna before she got real)
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Reply: 1.1
From: Louie Langov

I was mainly focusing on houses, lets say 2Br terrace anywhere from $330-$550 wk
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Reply: 2
From: Robert Forward

Hi Louie

I live in Sydney and have been having fun watching the market especially of late. in regards to your order of things happening well here is my thought.

>rentals increase: Already happened
>people refuse to pay: Already happening
>overinflated rentals: Already happening
>owners discount rentals: Already happening
>property valuations fall: ????????????
>people sell properties to pay for the >ridiculous amounts they borrowed: ????????
>panic follows: ??????????
>market correction: ?????????

I have noticed that there has been a stagnation of property prices in Sydney. And the problem with inner city over supply is a start.

But all the above is just my humble thoughts on a market I live in. Though saying all the above of cause there are pockets of Sydney that are and will achieve good growth and the rents will remain high. Sydney is a very large market to throw into on basket.

But I've had my say now.

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Reply: 1.1.1
From: Damien Dupont

Hi Michael,

Just wondering with your equation...

If the average accommodation in the area was 2 and 3 bedroom townhouses, would the average income that you would calculate it on be a single salary, or a combined household (two income) salary?


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