Seriously will Syd ever stop going up?

[BayView]

It will stop and when it does, it'll be stagnant for a decade. But people won't buy. They will wait for that 50% drop that never comes, then complain 10 years from now about the next boom and how 10 years was just not enough warning.

I remember being in a r/e's office one time somewhere (I think it was Elwood) and there was a framed black and white photo on the counter; of this very, very old man sitting on a park bench, resting his hands on a walking stick....

The caption underneath said "He's waiting for the prices to come down".

All those investors held society at large hostage while they plundered all the stock and only released the cuffs after the next boom. It's all too predictable. Investors are pure scum.

You forgot the appropriate emoticon - I assume it's sarcastic humour?

 

[jerrybee]

You forgot the appropriate emoticon - I assume it's sarcastic humour?

Yeah, I figure this crowd would see through it

 

[HiEquity]

Rent where you want to live near friends and family.

Invest where the numbers make sense.

Your future self will thank you...

 

[Burnhi]

Completely agree with HiEquity.
The properties you own already, are neutral and another is producing positive income, so you are under no strain with them.
Rent where you are comfortable. Then maybe further down the track, you will have a clearer picture.

 

[equitymate]

I was looking in the window of RE at Avalon a few months ago and was kind of surprised how reasonable the prices seemed, might of been old listings cant say for sure.

But yeah prices are crazy in Sydney now and I do wonder if it is all going to end in tears.

 

[JohnHenry]

....

But yeah prices are crazy in Sydney now and I do wonder if it is all going to end in tears.

Itdepends on what type of tears, tears of Joy or the other tears of heaven.... (Eric Clapton)

 

[knightm]

What stopped the last Sydney boom?

Yep.

Im not saying prices will crash either. But right now people believe double digit and stronger growth is inevitable each and every year. Its not.

 

[knightm]

Rent where you want to live near friends and family.

Invest where the numbers make sense.

Your future self will thank you...

This is so sensible I nearly fell off my chair. Yes.

 

[Tonibell]

Rent where you want to live near friends and family.

Invest where the numbers make sense.

Your future self will thank you...

I guess this is true - just glad I didn't take that approach.

I know Chris Gray is a big advocate of this approach.

With this you accept the risk that there is a chance that there will be some places you cannot afford to live - which seems to have happened here.

 

[JDP1]

Yep.

Im not saying prices will crash either. But right now people believe double digit and stronger growth is inevitable each and every year. Its not.

The longer sydney keeps up this boom, the longer the flatlining in prices in the future and/ or the correction in prices either duration or severity .
Quicker and more ready equity to be had in other markets I'd say. Having said that, if i owned property in Sydney, I would not sell, just take out some equity generated by the cap appreciation and buy another property in another market.

 

[HiEquity]

I guess this is true - just glad I didn't take that approach.

I know Chris Gray is a big advocate of this approach.

With this you accept the risk that there is a chance that there will be some places you cannot afford to live - which seems to have happened here.

No it hasn't - I understand Sydney rents are quite reasonable.

 

[Noknee]

Hi equity

U do make sense!!! Where should I be onvesting then if I can pick your brain?

 

[see_change]

Those who predict a big drop are unlikely to be happy .

While the GFC did produce some bargain properties there was no wholesale crash , and that was ( I think ) the biggest down turn since the Great Recession .

Affordability and sentiment will slow or even stop the market , but people have to loose their jobs before they have to sell regardless .

Cliff

 

[aussieB]

I am no guru but I was thinking about this the other day. I don't think the Sydney market will stop anytime soon.

Immigration is at an all time high. High visa fees isn't deterring people from emigration. I would think most immigrants from third world countries have inherited a lot of wealth from their ancestors. Legitimate and illegitimate (for eg., in India, farmers get their loans waved whenever a new government is elected in the Center/State (mostly) and never pay back loans yet reap bounties during harvest etc). There are a few Aussie banks out there and am told these branches don't ask the source of the money/tax numbers. They dont care if the money you are depositing has been acquired by legitimate means. In fact, I think now is the best time to clean money. Just walk in with the lcoal cash and dump it in an Aussie bank in your home country. Access it here and its all good.

Most people from other countries think Sydney is the epitome of Aussie living. And then there is this perception of big city -> more resources -> more jobs -> more money. So all the chatter on all immigration forums points to Sydney being the favorite city for immigrants.

I was also looking at the Aussie inter-generational report which points now to be the time for new industries to start taking roots so there is enough employment in the next 10 years. I would think Sydney to be a ripe place for new industries, primarily ICT. However, an ICT company, Atlassian, uprooted to UK, so am not sure if ICT companies can flourish here if there are no changes in the structure of taxation. Nevertheless, having lived in a few countries and uselessly analyzing and pondering where the growth will be I reckon the capitals are where the new industries usually begin to branch out.

Apart from that, the gov has their own vested interest in making sure the asset values of retirees are at their peaks so the pensions/welfare payments are cut. And, I didn't count the Chinese money yet

 

[Azazel]

Immigration is at an all time high.

Do you mean as a number or as a percentage of our population?
Migration was capped at 190,000 for both 2012/13 and 2013/14. Compared to our population as a percentage that's a decrease. Humanitarian migrants dropped from 20,019 to 13,750 in that time. That would be a 6,269 decrease. According to:
http://www.aph.gov.au/About_Parliam...tary_Library/pubs/rp/rp1314/QG/MigrationStats

 

[aussieB]

Do you mean as a number or as a percentage of our population?0
Migration was capped at 190,000 for both 2012/13 and 2013/14. Compared to our population as a percentage that's a decrease. Humanitarian migrants dropped from 20,019 to 13,750 in that time. That would be a 6,269 decrease. According to:
http://www.aph.gov.au/About_Parliam...tary_Library/pubs/rp/rp1314/QG/MigrationStats

Say it remains at 190k every year, year on year, it is always going to decrease every year when compared to the population.
But to answer your question, mostly as a number, I think.
190k ? Uhm, ABS site, shows the net overseas migration at more than 212k. Highest number flocking to NSW.

 

[Ausprop]

Hi equity

U do make sense!!! Where should I be onvesting then if I can pick your brain?

markets that have been pounded. How is gold coast going, is it back yet or still down?

 

[HiEquity]

markets that have been pounded. How is gold coast going, is it back yet or still down?

+1

There are plenty out there that still haven't gone up since the GFC.

Their time will come...

No harm in waiting a couple of months though to see how these lending changes work through the system - could be a material risk in investor heavy markets...

 

[Encarta]

I remember being in a r/e's office one time somewhere (I think it was Elwood) and there was a framed black and white photo on the counter; of this very, very old man sitting on a park bench, resting his hands on a walking stick....

The caption underneath said "He's waiting for the prices to come down".

You forgot the appropriate emoticon - I assume it's sarcastic humour?

Omg that same picture is in the offer room in ray white shailer park!! Maybe it's a thing ray white have when they leave you waiting before you submit your offer

 

[dajackal]

Those who predict a big drop are unlikely to be happy .

I am no guru but I was thinking about this the other day. I don't think the Sydney market will stop anytime soon.

Sydney fundamentals are still strong. This recent blog post helps to put things into the broader context.

http://petewargent.blogspot.com.au/2015/05/macro-prudential-and-sydney-property.html

I have no doubt that macro-prudential measures will serve to slow the market eventually - and there may be many more tools deployed that we have not been made aware of - but not before Sydney's median house price has been pushed up towards $1 million and investors have bid gross apartment yields all the way down into the mid 3 per cent range.