Sydney Silliness Warnings 2015

[JohnHenry]

quoted for future reference

I think prices will come off the boil, but crash wouldn't be holding breath

How come people here is so sure that no property bubble or crash be it small 1 - 29% or large 30%+ ?

is there any pattern that can be seen to predict this ?

According to the Online newspaper and people in my office / church it is coming for sure.

Anyhow.... we'll see about that.

Maybe crash in Sydney but sideways in Brisbane ? who knows....

 

[see_change]

How come people here is so sure that no property bubble or crash be it small 1 - 29% or large 30%+ ?

is there any pattern that can be seen to predict this ?

According to the Online newspaper and people in my office / church it is coming for sure.

Anyhow.... we'll see about that.

Maybe crash in Sydney but sideways in Brisbane ? who knows....

If the GFC didn't crash the market .......

Cliff

 

[windyzz]

How come people here is so sure that no property bubble or crash be it small 1 - 29% or large 30%+ ?

is there any pattern that can be seen to predict this ?

According to the Online newspaper and people in my office / church it is coming for sure.

Anyhow.... we'll see about that.

Maybe crash in Sydney but sideways in Brisbane ? who knows....

Well for it to crash... There need to be a major Shock to the economy such as:
1. Interest rate spike suddenly in a very short time
2. Spike in unemployment.

If you think about it.
Number 1: Will interest rate increase ? Yes it will. Will RBA keep on raising interest in a very short period of time to deflate property price ? I don't think so Unless they want to collapse the whole financial industry and get the Tax payer to bail out the bank.

Number 2: Possibly, but Sydney has a very diverse industry.

So there are still chances of crashing, but it is unlikely . It's more like a small dip followed by a very long period of stagnation.

 

[Brady]

How come people here is so sure that no property bubble or crash be it small 1 - 29% or large 30%+ ?

Maybe crash in Sydney but sideways in Brisbane ? who knows....

1% isn't a crash

10% isn't a crash IMO either

20-30% yes crash

But I don't think that will happen in Australia overnight. Australia has a long held culture around property ownership. Those that migrate here take on this urge of property ownership, clients I deal with everyday will sacrifice most things for this property ownership.

We're not like other countries were the keys can be thrown back to the banks along with the mortgages. Our regulators are quick to act, look what's happening with APRA at the moment. This APRA movement has a lot to do with Sydney & Melb markets moving so quick, attempting to contain this growth before something happens.

I don't believe prices will crash, but going back to stagnate after a great period of growth sure, a slight pull back even yeah why not.

All of this can change if something unforeseen happens, war, GFC2 etc

 

[windyzz]

All of this can change if something unforeseen happens, war, GFC2 etc

Or Alien invasion

 

[Befuddled]

How come people here is so sure that no property bubble or crash be it small 1 - 29% or large 30%+ ?

is there any pattern that can be seen to predict this ?

According to the Online newspaper and people in my office / church it is coming for sure.

Anyhow.... we'll see about that.

Maybe crash in Sydney but sideways in Brisbane ? who knows....

No one has a crystal ball so nothing is certain. Having said that, historical data on house prices have shown that a large adjustment (>30% drop) has never happened across the board. Historically, after each boom, there is a slight correction in the order of maybe 10%. This was the case even when we had the GFC.

Sure, history does not automatically become fact for the future, but at the very least it shapes as part of an informed opinion. I believe regular contributors on these forums at least belong in the "informed" category. They regularly conduct analysis on the market and this is their collective opinion.

Have you thought of who the journalists behind these doom & gloom articles are? Maybe it's a slow day at the office and the big boss wants them to write a piece to trigger conversation. Do the people in your office/church have a background or track record of property investment? Where did they get their information? Is it from the aforementioned journalist?

 

[Ausprop]

How come people here is so sure that no property bubble or crash be it small 1 - 29% or large 30%+ ?

is there any pattern that can be seen to predict this ?

According to the Online newspaper and people in my office / church it is coming for sure.

Anyhow.... we'll see about that.

Maybe crash in Sydney but sideways in Brisbane ? who knows....

30% is not a major crash, large swathes of Perth copped that after the GFC and life still went on

 

[JohnHenry]

30% is not a major crash, large swathes of Perth copped that after the GFC and life still went on

ah I see.
I guess, my scope of crash here is in Sydney proeprty market

 

[skater]

How come people here is so sure that no property bubble or crash be it small 1 - 29% or large 30%+ ?


According to the Online newspaper and people in my office / church it is coming for sure.

.

Because the people here are seasoned investors, unlike those in your office or church.

 

[JohnHenry]

I hope that you guys area all correct....

Ah I see,

You guys and girls are very great source of inspiration and knowledge to me.
It seems yes you are make more sense.

I'll stick with the number and figures collected from statistics (at the back of property mags) and my basic due diligence in this forum.

 

[see_change]

Because the people here are seasoned investors, unlike those in your office or church.

A good combination of sage , thyme with a dashing of dill .

Shaken , not stired

Cliff

 

[hugh72]

30% is not a major crash, large swathes of Perth copped that after the GFC and life still went on

Yeah 10% is a correction which at some point is highly possible, if you measure peak to trough a correction could be more. You just never ever want to be a forced seller.
Moranbah is an example of a market crash.

 

[wategos]

Well for it to crash... There need to be a major Shock to the economy such as:
1. Interest rate spike suddenly in a very short time
2. Spike in unemployment.

You are missing the big factor that crashed overseas property markets in the GFC, sharp reduction in the availability of credit. Australian property prices would not survive this.

 

[WattleIdo]

correction, dip, crash, stagnation, whatever. A slow down will happen some time. But not yet!
Can someone tell me how median price for 2 bedda in Harris Park jumped from $440K to $550K in a couple of weeks?
Wouldn't be surprised to see these apartments continue on an upward trend when everything else slows down because of convenience and affordability. But never expected to see this up up up and away business. Something tells me Sydney won't be slowing down for a while.

 

[DDDKEFather]

correction, dip, crash, stagnation, whatever. A slow down will happen some time. But not yet!
Can someone tell me how median price for 2 bedda in Harris Park jumped from $440K to $550K in a couple of weeks?
Wouldn't be surprised to see these apartments continue on an upward trend when everything else slows down because of convenience and affordability. But never expected to see this up up up and away business. Something tells me Sydney won't be slowing down for a while.

A couple of links written by Pete Wargent on the current state of the Sydney property market he one of my favorite property commentators who is also a Sydney, Brisbane and London property investor. I think his articles are very good reads. He also has an interest in the stock market.

http://petewargent.blogspot.com.au/2015/06/auction-clearances-through-90-per-cent.html?m=1

http://petewargent.blogspot.com.au/2015/06/housing-finance-kaboom.html?m=1

 

[datto]

^^^^ never trust a man with hair like that.

 

[JohnHenry]

correction, dip, crash, stagnation, whatever. A slow down will happen some time. But not yet!
Can someone tell me how median price for 2 bedda in Harris Park jumped from $440K to $550K in a couple of weeks?
Wouldn't be surprised to see these apartments continue on an upward trend when everything else slows down because of convenience and affordability. But never expected to see this up up up and away business. Something tells me Sydney won't be slowing down for a while.

Yeah, and also:

The auctioned house last weekend in West Ryde Gaza St. asking Price $1.2m sold price was +$610.000 !!!

and also the house price in Westmead where it start from $1.1m and above why ? the median price is just $836.000 !!!

if that is not a bubble then I guess that's hyper inflated price due to FOMO (Fear Of Missing Out).

 

[BayView]

You are missing the big factor that crashed overseas property markets in the GFC, sharp reduction in the availability of credit. Australian property prices would not survive this.

A sharp reduction in credit would see a shortage of buyers.

If the rates remain low when this happens, there would not be much change - not much stock to sell.

But if rates go up at the same time - more sellers I'd say, coupled with less buyers - prices will soften a bit.

 

[DDDKEFather]

Yeah, and also:

The auctioned house last weekend in West Ryde Gaza St. asking Price $1.2m sold price was +$610.000 !!!

and also the house price in Westmead where it start from $1.1m and above why ? the median price is just $836.000 !!!

if that is not a bubble then I guess that's hyper inflated price due to FOMO (Fear Of Missing Out).

I think there is a lot of FOMO out there and that is for both investors and owner occupiers.

A lot of people paying these sought of prices are also upgraders that might have sold their property in a less "desirable" area and upgraded to a more "desirable" area. The low interest rates allows these people to upgrade to a much more "desirable" area.

It is not just investors that are paying top dollar for property it is also owner occupiers which the media does not or will not recognize. I would not listen or pay any attention to a journo in their 20-30's lamenting about a "property bubble". Sydney is not in a bubble. For sure property is expensive but stay away from Sydney real estate for now. I am really enjoying watching the carry on's from all the media d***heads and greenies about the greedy property investors. It really is funny to watch them on TV or read the newspaper stories.

The increase in prices in Sydney now are not unprecedented just remember that. Don't go into hysteria about the state of the market, I would just suggest don't buy anything in Sydney now.

I was not in the property game at the time but in the late 80's in Sydney I believe that property prices doubled within 2 years, but then came back down during the recession in the early 90's.

 

[C-mac]

I think if APRA really cuts the legs off of local investors, it'll see a reduction in Sydney investment by locals, simply because at the paultry DSRs and LVRs that lenders will allow, no 'mum and dad' local investor would realistically have the means to touch Sydney. Those folks will go elsewhere. QLD maybe, or regional NSW, who knows.

So, who does that leave remaining in the Sydney 'game' at that point, then? Well, good old home buyers (the FHB's who can afford it, and the upgraders mostly), and oh, of course the Chinese. Big time. In fact, it'll be even more of a cashed-up playground for the Chinese if their local investor competitors pull out of the game.

Hence my belief that we may (possibly) see a scenario where many non-Chinese-interested suburbs in Sydney will plateau (offering home buyers perhaps a better chance in these suburbs), whilst all those good old Chinese hotspots (the Eppings, the Chatswoods, the Hills Districts, the Strathfields, the Hurstvilles etc.) Will continue to throttle along at full pelt.

So; in my mind; no Sydney crash, just a muted plateau in say 70-80% of wider metro suburbs, and continued silliness in the Chinese favoured + top-end local buyer postcodes.

Just my two cents though, based on observations. Nothing is a certainty in this wild marketplace