Sydney Silliness Warnings 2015

Just had another thought re warning signs. In 2003/2004 was there massive amounts of OTP stuff happening? I didn't catch that boom so I can't remember. I am not seeing this in Sydney atm although there is a little bit of OTP hype creeping in. Is this a sign that we are still well below peak?
 
Just had another thought re warning signs. In 2003/2004 was there massive amounts of OTP stuff happening? I didn't catch that boom so I can't remember. I am not seeing this in Sydney atm although there is a little bit of OTP hype creeping in. Is this a sign that we are still well below peak?

Each cycle isn't the same. If it was, much smarter people than you and I would have worked it out long ago.
 
Just had another thought re warning signs. In 2003/2004 was there massive amounts of OTP stuff happening? I didn't catch that boom so I can't remember. I am not seeing this in Sydney atm although there is a little bit of OTP hype creeping in. Is this a sign that we are still well below peak?

Yes, there is heaps. The amount of apartment blocks coming out of the ground is the most i have seen since pre olympics.
 
I think sydney will become a tale of two cities: one where land owners (houses) remain to be the wealthy few/wealthy elite; and where the masses (units/apartments) live in varying degrees ranging from squallor to luxury.

Unit owners (myself included!!) Had best buy strategically and carefully to avoid problems when all these new towers pop on to the market upon completion in the next couple or years. If I buy any more units in Sydney, I'll be looking and areas of low-rise older blocks; peppered and wedged between heritage houses or in hillier pockets where development is just not possible. These units will continue to appreciate in value because they will still carry the pleasant neighborhood vibe due to the nice old houses and greenery around them. No risk of them becoming nestled in high rise concrete and glass ghettos in the near future..
 
I can't tell you what is happening in the City, or the Eastern Suburbs, but I can tell you that out here, in the West, it is white hot. Standing room only at the opens, huge numbers of offers being placed on the one home. Little stock on the market & sold straight away.

We've sold two. Both at the first opens, so this is not just from us looking in, we've experienced it first hand.

Do I think there's still room to move upwards? Yeah, sure do! Would I risk buying something only to sell again in twelve months? NO WAY! Although I THINK there's still room to move, I'm not that confident to put my money where my mouth is. That's why I'm selling NOW, and not waiting around.

There's a saying that goes "You don't lose money taking a profit". So, although there's a chance that I could get even more profit, there's also a chance that the market could fall over while I'm waiting & I don't get the profit at all.

Both the properties I've sold, have been sold at more than double the purchase price. One I've had for 5 years, the other for 10. :D
 
Yes, there is heaps. The amount of apartment blocks coming out of the ground is the most i have seen since pre olympics.

It's important to note that the levels of construction in Sydney, while at peak volumes, are still well short of what would be needed simply to cater to the increase in population. Before anyone informs me that more than one person lives in each dwelling on average, look at the numbers. It's still not enough stock. Not even close. And Sydney unit approvals are well past their peak now so construction starts, then completions will reflect that over the next 12+ months.

This is one reason (another being record low rates) that could see prices continue to rise steadily for a few years yet. Not that they will. But they might.

Pete Wargent has posted a series of these data (subscribe to his newsletter--this info in there is gold).

I thought I should share:

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I can't tell you what is happening in the City, or the Eastern Suburbs, but I can tell you that out here, in the West, it is white hot. Standing room only at the opens, huge numbers of offers being placed on the one home. Little stock on the market & sold straight away.

We've sold two. Both at the first opens, so this is not just from us looking in, we've experienced it first hand.

Do I think there's still room to move upwards? Yeah, sure do! Would I risk buying something only to sell again in twelve months? NO WAY! Although I THINK there's still room to move, I'm not that confident to put my money where my mouth is. That's why I'm selling NOW, and not waiting around.

There's a saying that goes "You don't lose money taking a profit". So, although there's a chance that I could get even more profit, there's also a chance that the market could fall over while I'm waiting & I don't get the profit at all.

Both the properties I've sold, have been sold at more than double the purchase price. One I've had for 5 years, the other for 10. :D

Well done skater. White hot is a good term and I'm glad you are in on the action.

Yeah - I find it hard to guage from west of the sandstone curtain but from all the feelings I'm getting is that East Sydney really has not performed as well as the west and I'm wondering that if the catch up factor comes into play then Sydney east is in for some big gains. Someone mentioned above that below 700k is doing well and up to 1.5 m is a bit slower. Maybe this is some of the reason.
 
Yep thank you - I read a fair bit of Pete's stuff via his Twitter posts but I didn't know he had a newsletter. Will jump on that!
 
.Do I think there's still room to move upwards? Yeah, sure do! Would I risk buying something only to sell again in twelve months? NO WAY! Although I THINK there's still room to move, I'm not that confident to put my money where my mouth is. That's why I'm selling NOW, and not waiting around.

There's a saying that goes "You don't lose money taking a profit". So, although there's a chance that I could get even more profit, there's also a chance that the market could fall over while I'm waiting & I don't get the profit at all.

Both the properties I've sold, have been sold at more than double the purchase price. One I've had for 5 years, the other for 10. :D

Smart move, take some money off the table, reduce debt and then move on to the next deal in a strong position. Good for you, good advice.:)
 
Great post Richard - interesting charts and good reference to one of the better commentators in the market. Not sure about the bolded conclusion is correct.

Sydney is indeed going through a construction boom. But it is making up for lost time - a whole decade of lost time where construction of new dwellings was exactly the over a 10 year period, despite a 25% increase in the population.

Re the population to dwellings chart - good to caveat it with every 2-3 new people require a new dwelling (its not a 1 for 1 ratio).

As of right now though, my understanding was that Sydney is well and and truly building more than 'structural' demand (could be wrong, but gut instinct driving around is that its right). That is, the supply of new dwellings is outstripping the 'structural' demand side (ie population increases, etc).

However, much of this supply is medium density and 'in construction'. That is it will take time to come online over the next 24 months...i think that may mean there will be greater volatility in price movements. Ie a pickup in prices while theres not enough stock around as theres not enough supply to keep up with demand, but then large amounts of medium density dwellings come online, rental yields fall drop, etc and theres an associated price adjustment.

I like this article - a bit old and out of date i think, but a more complete picture of the Sydney supply side. There was a great chart you posted earlier with the Sydney undersupply being carved out every year for the next few with the supply coming online.

http://www.propertyobserver.com.au/...oval-and-construction-response-to-prices.html
 
Use the Druitt area as a barometer. When the entry price for a house out there is 500k, duck for cover! Bogan central is about to implode IMO.

Watch the signs. Red sky at night, sailor's delight. Red sky at dawn, sailor be warned.
 
Depending upon the time value.(obviously I'm thinking very short term)

Why wouldnt you wack it all down on blue chip share ?

The risk of getting caught in the Syd market with the scenario the OP posted in their 2nd post is high, IMO. Unless of course they have plenty of LVR to ride out when the musiuc stops, but it was a generic question so hence my answer.

Are you really going to make 200K on blue chip share in the short term? Look at BHP for example, went down to under 30 bucks a share the other week. It was sitting in high 38 per share a year ago and it always stays around this price for some time now. Just using BHP as an example.
 
OK - We are going to have a go at buying in Sydney again. There seems to be a lack of evidence from this thread that Sydney is near peak. We are going to go Coogee again.

We have circa $200k equity from our first purchase in Coogee 5 years ago. Probably tip in 60k cash as a deposit. Looking for something around the 600k mark renting for circa $550.

What do you guys reckon?
 
What can you get for that money in Coogee?
I don't follow the market there, but would not imagine much could be had at that price.

That was my question too. If you can only get say a 1 bedder and you're expecting up to 40% growth do you see it going up to say 800K? Surely that's impossible
 
Are you really going to make 200K on blue chip share in the short term? Look at BHP for example, went down to under 30 bucks a share the other week. It was sitting in high 38 per share a year ago and it always stays around this price for some time now. Just using BHP as an example.

No, probly not make 200k short term but the divs will cover the "rent" and you can transact far easier and cheaper short term than you can with property.
It is certainly possible to do it though. Can happen overnight depending upon how much leverage is placed.

Are you really going to make 200k on Syd property in the short term?

The jury is still out on that and it's closer to game over this run IMO.

Also depends upon how much $ is put to risk dont forget. Like I said earlier, transactional costs including CGT should be in the calcs no?
 
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