Sydney prices to eclipse all other states

Yes... 50% capital growth on the most expensive city in Australia with no mining economy to support it while the rest of the world enters a period of deleveraging. I can just see that crystal clear like John Edwards.

Have you noticed all these so called professionals and groups who have an interest in property ALL say the same thing?

"The combination of lower interest rates, cheaper homes, and rising incomes is generating a welcome boost to housing affordability"

Talk about a broken record!

The whole rising rents thing is a load of crap... rents have historically tracked inflation. Some houses in Sydney would be lucky to yield 3%? Prices are going to have to come down to make them affordable.

People who believe that are nothing more than well orchestrated puppets in a ponzi scheme really... and I think people are starting to wake up and smell the roses, so to speak, only to realise there are no roses.
 
I tend to agree with you Bon. Just needed to see the carnage in the Retail sector today on the ASX. Billabong down 44%, JBH, DJS, MYR, HVN all down 6%-10%. It's bad.
 
was just looking at billabong historical share price after I heard the news at close of market. For the past 5 years it has tanked :eek: Terrible looking graph that one
 
I agree. John Edwards is quite delusional over this. China is contracting based on the latest manufacturing figures. Europe is heading towards a deep recession. US is already in a deep recession. Add to the mix some uncertainty re the middle east and North Korea now Kim Jong Il is dead and Australia with the only thing going for it being it's resources (not human they are too expensive) is somehow going to thrive amongst all this.

People keep talking about rents increasing but noone can afford rental increases. People are already screaming about the cost of living and suddenly landlords think they can increase the rent. Here in my home turf of lower north shore I have actually seen prices decreasing from what they were 2 years ago. Upper end stuff but you can get a 3 bedroom apartment with water views for $1,000 per week. Now I agree the average Joe can't afford this but with 2 people in the apartment we are talking $500 per week. Not overly expensive. 2 years ago they would have got $1,200 - $1,500 per week. Maybe landlords are getting 2-3% increases but that is inflation and nothing more.

Maybe he should go back to talking to dead people :p
 
Bon said:
Yes... 50% capital growth on the most expensive city in Australia with no mining economy to support it while the rest of the world enters a period of deleveraging. I can just see that crystal clear like John Edwards.
Click to expand...

When you mentioned crystal balls and John Edwards I thought what is this guy commenting on Syd property prices.
 

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Well , personally I agree with John Edwards

It's around 8 years since the last boom peaked in Sydney . Rents have gone up 50 % in the last few years. Hardly any vacancies .

Good time to buy in the upper market as that is weak if that's where you want to buy. We're buying nice units closer towards the bottom of the market , around 600 which is still quite strong. Not booming but certainly not crashing. Some motivated vendors

We bought two units in Mosman at the peak of the GFC ( probably the best buy we'll ever make ) , another one in Manly early this year and we settle on another one there today . Last two in our super fund.

There seems to be a lot of interest from people wanting to buy in their superfunds though I don't think this has taken off in a big way yet , though it might become a factor in the next couple of years.

Where are you guys putting your money ?


Cliff
 
Note he says ten years and that's the time frame I'm looking at

Probably the most important point

When we started investing ten years ago Sydney was the best performing market and places where we bought at the time , Hobart , logan & rocky were all places we were warned by experts as places that didn't have capital growth .... ( gee what were they smoking ...... ) .

Well now Hobart and Darwin top the growth figures for the last ten years and guess what's on the Bottom of the list . Sydney .

So I've put my money where my mouth is and I predict that in ten years time ( of the capital cities ) sydney will be at the top of the list . I'll be buying central sydney and once that section starts moving , we'll buy middle / outer sydney ( maybe even Mt Druitt :) ) and at some stage we'll go back to Brisbane.

Only possible fly in the ointment is the impact of the overseas financial crisis but at this stage we're not highly geared . we're going to wait a while before our next purchase , well at least six months . We need to put more money into our super to prove servicablity to the banks ......

Cliff
 
Bon said:
Yes... 50% capital growth on the most expensive city in Australia with no mining economy to support it ....
Click to expand...
CG in Sydney does not need mining to support it AFAIK. It has always been the most expensive city in Australia except for a brief period where the Perth median exceeded that of Sydney......and we all know what happened to Perth in the years following that!


Bon said:
... rents have historically tracked inflation.
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I don't think that can be right Bon. Rents have historically hovered around 5% yield. CG has not historically tracked inflation.

Bon said:
Some houses in Sydney would be lucky to yield 3%? Prices are going to have to come down to make them affordable.
Click to expand...
Sydney houses with 3% yields have always been around but they do not attract the type of tenant that needs "affordable" rents. They tend to be high earners or corporate rentals provided by their employer.
 
coastymike said:
People keep talking about rents increasing but noone can afford rental increases. People are already screaming about the cost of living and suddenly landlords think they can increase the rent.
Click to expand...

coastymike that is not my experience in the mid-part of the rental market. Agents are still reporting groups of a dozen or so attending a 15 minute Open for Rental Inspections with some rental auctioning still occuring. Rental vacancies in many parts are sub 1% and it comes to a 'supply Vs demand' equation rather than an "affordability" issue. (It may be different at the higher end where you are)
 
I rent in Mosman.

Most units are empty for a long period of time, with rent reductions. I paid $10 a week more to stay put. The owners wanted to increase the rent by $60 a week. Both me and their PM said the market would not support that. And it wouldn't.

A couple of other units along the street are having open for inspections for rental properties. They are lucky is two people go through.

I've been having a look around for a 2 bedroom or 1 bed +study place in the $450-$600 bracket. This is usually the fastest shifting bracket. Not any more. Sitting empty for a while, and even the price on Domain goes down.

A property my sister used to rent at Cremorne is an interesting study. 6 years ago she rented it for $390 a week. I saw it 2 months ago for $420 a week. That is hardly a massive increase.

Yeah, some areas are different, but I don't see a particulary healthy market out there.
 
I'm in a block of units renting for $300/wk.. been here 2 years. As soon as the rent goes up from $300, people up & move. There is only 1 tenant who has been here longer than me.

I got my rental notice increase about a month ago... true to form, I'll be shooting through too. Can't justify paying anymore than $300/wk for what this place is.

I can't imagine things being too different elsewhere... People will just up and move knowing they can sign a lease for 6 months or 12 months and fix the amount of rent without having to worry about increases.

Here is an interesting article with some quotes from Ralph Norris - http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10773580

The world is entering a period of deleveraging, credit is drying up and becoming more expensive... we are not immune to it IMHO. Anybody who says there are no risks and is full-on bullish is risk averse and doesn't value preservation of capital too highly.
 
coastymike said:
I agree. John Edwards is quite delusional over this. China is contracting based on the latest manufacturing figures. Europe is heading towards a deep recession. US is already in a deep recession. Add to the mix some uncertainty re the middle east and North Korea now Kim Jong Il is dead and Australia with the only thing going for it being it's resources (not human they are too expensive) is somehow going to thrive amongst all this.
Click to expand...

You've omitted mentioning Saudi Arabia deciding it needs nuclear arms too. That's got to be good, right?
 
Ideo said:
I rent in Mosman.

Most units are empty for a long period of time, with rent reductions. I paid $10 a week more to stay put. The owners wanted to increase the rent by $60 a week. Both me and their PM said the market would not support that. And it wouldn't.

A couple of other units along the street are having open for inspections for rental properties. They are lucky is two people go through.

I've been having a look around for a 2 bedroom or 1 bed +study place in the $450-$600 bracket. This is usually the fastest shifting bracket. Not any more. Sitting empty for a while, and even the price on Domain goes down.

A property my sister used to rent at Cremorne is an interesting study. 6 years ago she rented it for $390 a week. I saw it 2 months ago for $420 a week. That is hardly a massive increase.

Yeah, some areas are different, but I don't see a particulary healthy market out there.
Click to expand...



Sorry but every area is different not just "some". Generally speaking the rental market sydney wide has been extremely tight with vacancy rates hovering around the 1-2% mark for quite some time and rents in many areas having increased substantially.

I find these anecdotal examples a little tiresome as quite clearly they are not a fair representation of the market.

Take Mosman for example: It has a current and trend vacancy rate of around 3.5%, over double that of Sydney as a whole (see below).

http://www.sqmresearch.com.au/graph_vacancy.php?postcode=mosman&t=1

and

http://www.sqmresearch.com.au/graph_vacancy.php?region=nsw::Sydney&type=c&t=1

How Cremorne can be used as an example of an unhealthy market with a vacancy rate of 1.8% I'll never know. Unless of course you mean unhealthy for the prospective tenants.

Enter as many suburbs as you like into SQM or check the back of an API Mag', its far from a picnic for Sydney tenants.

There will always be overpriced or substandard rental property which can sit on the books for ages and go stale but again these are the exception NOT the rule.
 
Bon said:
I got my rental notice increase about a month ago... true to form, I'll be shooting through too. Can't justify paying anymore than $300/wk for what this place is.

I can't imagine things being too different elsewhere... People will just up and move knowing they can sign a lease for 6 months or 12 months and fix the amount of rent without having to worry about increases.
Click to expand...

Im just wondering how much the rent increase was? Would it cost more to move, I mean it might cost a couple of thousand to move for the sake of a $10 rent increase, it would take you two years to be back to square 1.

The poor landlords have got to move with the cost of living as well.
 
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