My thoughts .
It's hard to predict when a market enters the start of a new Property Cycle .
My thoughts are , in retrospect ( I hate that word ... ), the up swing started in the middle of last year.
My thoughts are that we are entering a period of strong growth that will lead to the sydney market doubling over a period of between 3 - 6 years ( I deliberately didn't put that in as an option )
Why ?
Sydney Historically doubles Every so many years . In the last cycle it took around 13-14 years from around 1990 to 2003 , so with the last ten years being relatively flat we're over due.
Affordability is good at the moment . The low interest rates are a large factor in this , but I can't see the reserve bank putting rates up significantly any time soon . They're still talking about rates going down . As the market goes up , they will put rates up slightly , but given the low base , a small increase will have a bigger impact than a large increase from a base of higher rates . I think the market will be sensitive to rate increase . The RBA know this and don't want a crash anytime soon . Give them around 3-4 years minimum unless we have a dramatic boom .
Rental returns around good in good areas of sydney. Not sure about this week , but in the last month we have seen nice units in the lower northern beaches selling for that 500 / 500 rent / price ratio . Combined with historically low rates that makes these properties historically very affordable . There has been strong rental growth in these ares over the last few years . We looked at these properties a few years ago and a typical rent was 400 for 600 . Given those holding costs we didn't buy but we have bought since.
Places are selling for below replacement value . This occurs at the lower end of the market . At the top of the market , properties sell for more than their replacement value.
A strong Property market , price increases , increased building will be part of the next economic upswing . it will create confidence and and that will feed back to further increases in prices.
We have an election coming up . I think that the liberal win ( I think ) will give us a reason to be more hopeful . Tony Abbott has been incredibly successful as a doom and gloom merchant , portraying the market as a Basket case due to labor mismanagement ( ? with the help from the media ) . I don't think the community wants to hear this message now and I think there are vested interests who want the liberals to be successful. I think any doom and gloom messages from the labor opposition will be ignored and not given credence by the main stream media .
I've been told there is much money waiting on the sidelines for a favorable liberal government before it gets invested. This will be another factor in creating economic growth , personal wealth and further fueling the property market.
We are coming out of a period of economic hardship ( actually really not that bad in Australia ) affecting most of the world. China's growth dropped to levels that would have had the RBA slamming the brakes on with oversized steel capped boots . The USA economy has been showing signs of reccovery for a while . Finally the worlds basket case, Europe , is showing signs of a successful resus.
Psychologically , as a community , we're tired of thrift and restraint . People are looking for a reason to be hopeful so they are ready for a period of irrational exuberance. Enough time has passed for the community to forget the mistakes that occurred at the end and the hurt it caused . Only those who were hurt them selves , or people who know them will remember .
The new generation coming through will hear comments of be careful as conservative because it's different this time. The current generation know everything and don't need advice from their parents . If they're not sure how to do something , why read the manual , There's a youtube video , from some stranger they're never met . It must be good it has 5 mill hits . I have three kids , 19, 22 & 24 . They have a combination of extreme wisdom and and at times ..... sigh.....
My personal hope is that those members who were hurt , aren't put off and stay on the side lines . Everyone makes mistakes . Learn and move on . My other hope is that when the market does get over heated , which it will ,people see and heed the warnings signs.
Finally and most importantly , there has been an increase in activity on this forum .
Cliff
. I thought we would have seen stronger growth centrally in Sydney before we saw the growth we are seeing in 2770 . I think the internet in terms of spreading information has been largely responsible for this. 
