Sydney high density units gain only $5kpa

Interesting and extensive post on the MacroBusiness forums from a reader worth a look (won't post in entirety here, but goes through a lot of data):

For anyone interested in the Sydney property market, some figures below explain why buying a median priced unit, near good public transport could have been a bit of a disappointment for anyone buying over the last 3 years.

If you are a potential first home buyer in Sydney (or even Melbourne/Brisbane), you are most likely looking at buying a unit, most likely an "affordable" one, often near the half million dollar mark. You're probably looking for good public transport if congestion is anything like it is here in Sydney (a s#*tfight!)

So you do what many people your age do. Look to buy in or around the area you are currently renting. Which is often an area with a large number of units, often a suburb on a main public transport line.

One example of such a suburb Dee Why on Sydneys northern beaches;

Since 2009 Dee Why has seen on average 565 unit sales each year. Its a Sydney suburb with one of the largest turnover of unit sales annually. This can be seen as a good or a bad thing! Its good when you are a first home buyer looking to buy, the number of units makes the area more affordable. Its a double edged sword however, and can be bad once you've purchased because, again, the number of units make it bad for price growth.

Statistically however, the high turnover in the number of units sold is a good thing, because Dee Why can give us a good idea of whats happening at the bottom of the property market in capital cities;

The Price finder website gives comprehensive data on residential property sale prices across australia. Its suburb flyover crunches the numbers of all these sales and offers an annual average and median price for each suburb. This gives us a reliable gauge of change in property values in each suburb, year to year.

For Dee Why, between 2009 and 2010 the median unit price jumped 8%. No doubt because of the notorious FHByers grant. But since then, price finder shows the median unit price in Dee Why has meandered back down around the 470k mark... Continues

http://www.macrobusiness.com.au/for...igh-density-units-gain-only-5kpa-thread162.0/

Of course within that list there are both out performing suburbs and under performing, so I guess you could make the argument that if picked well some have done well, although I wonder how many Sydney unit buying FHBs spend a lot of time thinking about where the best growth is likely to be...
 
...but, doesn't this just prove that FHB grants bump prices up artificially in one suburb notorious for unit sales (i mean, 565 unit sales would indicate a fair supply, am i right?).

how is it reflective of the wider, sydney market as per the title? how is it reflective of all Sydney higher density unit complexes?

for Dee Why i don't doubt this to be the case. lots of units, lots of sales, FHB boosts - why would you buy a unit in a suburb with a turnover of nearly 600 units pa if you were loking for growth? article doesn;t mention rental yields and what they haev done in this time - maybe this market has a general concensus that you swap growth for yield ala the markets that Nathan Birch targets?

not enough info to gauge the thread title claim for Dee Why, let alone the entire Sydney High Density Market.

sorry - this article lack context to be extrapolated city / state wide and the thread title is misleading and sensationalist.

a more appropriate thread title would be

"Dee Why FHB-induced price rises for apartments give up gains over the past year"
 
how is it reflective of the wider, sydney market as per the title? how is it reflective of all Sydney higher density unit complexes?

not enough info to gauge the thread title claim for Dee Why, let alone the entire Sydney High Density Market.

sorry - this article lack context to be extrapolated city / state wide and the thread title is misleading and sensationalist.

a more appropriate thread title would be

"Dee Why FHB-induced price rises for apartments give up gains over the past year"

Did you click the link and continue reading and see the many other examples?
 
Did you click the link and continue reading and see the many other examples?

i did, but i didn't want to bring it up because it further destroys your argument.

surrey hills - bankstown - liverpool - husrtville - liverpool - sutherland

all suburbs on the edge of the city.

there may be high density nodes within these suburbs but they do not reflect "high density living" across sydney- rather spot examples within outer lying suburbs.

the same comparison would be saying "cockburn central and rockingham apartments falling - perth prices take a hit" - that argument is bunk because they have nodes of high density within a traditionally lower density suburb (2 streets away are 700sqm blocks with big 5x2s).

your argument is that sydney high density prices take a hit because apartments in outer lying suburbs haven't fared so well since the FHB was scaled back.

consider the price point of the reduced land component within an already cheap suburb and it's no wonder they were FHB magnets - with a lot of people who couldn't afford houses suddenly being able to - of course the prices went up and floated back down.

i don't agree with the FHB at all - a more sustainable measure would be to waive stamps and fees for the same saving instead.

i have no argument with you at all on the FHB artificially inflating lower end housing prices.

but you cannot take that out of context - being to compare FHB stock in outer lying suburbs with sydney stock as a whole - and apply it city / state / nation wide with a series of convoluted and grey lines of reason.

the proof is still there - they experienced CG. they're not underwater, there's no mention of what rents have done in that time and there's no mention of if there's a swing away from high density in these areas which allow you to forecast what to buy next if you are looking in these areas.

i'm not trying to pick on your argument - but you need to be clear about what you're arguing for / against... there's no context.

are you saying the FHB was a bad idea and here's the sales data to prove it?

are you saying that investors and buyers need to be aware what the FHB does to artficially inflate prices in comparitively lower-socio economic areas?

are you saying that buying anything while the FHB exists is folly?

are you saying that sydney has underperformed in a national context?

please, be clear and then you wont end up with ambiguous arguments and dross that span 48 pages of bandwidth.
 
Sydney high density units gain only $5kpa

Over the past three years? So what? For two of those three years Sydney was in a minor correction after 20% growth in the previous 18 months. I wonder why the author didn't run the analysis over five years to include the strong growth years? No... actually I don't wonder, because it's just another one-sided permabear Macrobusiness post, designed to spin the data to look as bearish as possible.

Well done on the blatant plug for a rival forum to Somersoft though. :rolleyes:
 
i did, but i didn't want to bring it up because it further destroys your argument + [wall of text]
It's not my argument Aaron. I just thought the post had some interesting price data/analysis which is often lacking in the "Property Market Economics" section on Australia's largest property investment forum.

You raise a good point, some price weakness was probably to be expected after the October 2012 changes to the FHOG in NSW.

Not really specific to Sydney, but I do think FHB's (in most capitals) should consider skipping the traditional unit purchase as stepping stone to something larger a few years down the track in this low/no growth environment.

Over the past three years? So what? For two of those three years Sydney was in a minor correction after 20% growth in the previous 18 months. I wonder why the author didn't run the analysis over five years to include the strong growth years? No... actually I don't wonder, because it's just another one-sided permabear Macrobusiness post, designed to spin the data to look as bearish as possible.
I look forward to your post showing the numbers over 5 years.
 
I look forward to your post showing the numbers over 5 years.

 
I meant the suburbs with high density units, discussion point of the thread.

There are at least some high density units in most suburbs, and movements in unit prices haven't been terribly different to house prices.

Anyway, good to see this topic is able to generate some discussion here on Somersoft. The thread on the MacroBusiness forum itself is pretty much dead. Tumbleweeds (like the whole forum really).
 
It's not my argument Aaron. I just thought the post had some interesting price data/analysis which is often lacking in the "Property Market Economics" section on Australia's largest property investment forum.

fair enough! sorry, it came across as though you were taking a similar stance.

I think I got that impression by the fact that you didn't change the thread title.
 
article doesn;t mention rental yields and what they haev done in this time - maybe this market has a general concensus that you swap growth for yield ala the markets that Nathan Birch targets?
That's been the general pattern I've noticed with r/e reporting for ages....

They seem to only ever talk about growth, but never talk about yield, and when they do talk yield, they pull out figures of 3,4,5% as good, or the norm. :eek:

I suspect this would due to the habit of the reporters being almost entirely inner suburbs focused, and therefore that is all they seem to/want to know. :confused:

They seem to think that good yield almost always means no growth, and vice versa.

As was said too about Hobo Joe's article; it seems to have cherry picked a small window in time to analyse, which - as is done in any investment class - can be slanted to make that class look terrific or cr@p.
 
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