Sydney's hot , Vote before you read

[Deltaberry]

Well you might be right and there is probably no evidence

But who cares? The guy made money and that's all that matters.

 

[billybrownless]

i would bet my entire property portfolio it wont double!!!!

Ok folks

So Sydney's moving . What does this mean ?

Please Vote before you read any debate which might sway you initial thoughts.

Cliff

and hell will probably freeze over!

 

[euro73]

Exactly my point - my opinion is people will take their money out of super and put into property. Imagine all the deposits. One last boom baby.

yes, but they havent- and its been an option since 2007. So perhaps this may change- but so far it's a small market. And dont forget, financial planners, who have a MASSIVE influence in influencing where SMSF's invest, ignore property by and large.

Your argument assumes that most SMSF's have the necessary borrowing capacity to gear into property. You'll find that's not the case.

Im not saying it cant happen, but so far it's failed to happen- in spite of all the hype and wishful thinking.

 

[euro73]

Well you might be right and there is probably no evidence

But who cares? The guy made money and that's all that matters.

Sure- but the topic here is double ups in ten years across Sydney. No one is denying it can happen in some lucky spots- Im saying it shouldnt be relied upon as a reasonable expectation for most peoples purchases in most locations.

 

[see_change]

Sure- but the topic here is double ups in ten years across Sydney. No one is denying it can happen in some lucky spots- Im saying it shouldnt be relied upon as a reasonable expectation for most peoples purchases in most locations.

Euro

Actually , the original topic was , what do people think will happen ?

For me , knowing what a group of relatively well " property educated " people think is going to happen is useful.

I've found in the past the members of this forum , as a collective , are usually pretty spot on with their expectations . There are always those who are overly optomistic ( me ) or those who are unduly pessimisitic ( you ... ) but I've found the middle ground are fairly spot on.

Cliff

 

[euro73]

Euro

While it was possible to borrow 105 % in the last cycle . 95 % is possible now .

With some lenders- not all. 90% is tougher now than 105% was back in 2005/6/7


It only takes another 1-2 years of saving to get that initial deposit to get into the market and once you get into the market if you want to buy multiple IP's the deposits for future IP's usually come from an increase in equity rather than further saving .

For a very small number of people, with above average incomes and below average debt perhaps- but not for the majority of people.
This is where the argument is flawed. You assume that because equity is created, borrowing capacity is simultaneously created. This is the point I'm trying to infuse- it's just not that simple. That only applies to a small percentage of people. Whereas the last boom was driven by all borrowers across all income levels because the aggressive changes/improvements/enhancements/innovations from the banks ( allowed by LMI and securitisation) benefited everyone. Form a bank point of view- all the equity in the world is useless without income with which to leverage it, just as all the income in the world is useless without equity.


Given that most people don't buy IP's and those that do usually stop at one , while the changes in LVR will put a dampner in the market while people play catch up I don't think this will be a long term effect .

Its here to stay Cliff. Unrestricted Cash Out and Higher LVR's arent returning in our lifetime. It wont mean a permanent freeze on credit , nor a freeze on growth ( just a dampener) but it will definitely mean fewer people can borrower as much, as quickly, as easily. Investors who enjoyed unparalleled growth in the 90's and noughties continue to deny the role of credit. I understand that - they arent bankers and shouldnt be expected to udnerstand the mechanics of how mortgages are funded- but to continue to deny its role after having the mechanics explained seems curious, and if the current environment which equates to the lowest rates in history coupled with under- supply leading to growth still well below double digits, isn't enough to prove the point- not sure what is.

I'd be curious to know how many people actually did buy at 105 % LVR as a percentage of the over all loans in the last cycles. I'd guess it was mainly FHO's and those few adverterous people who buy multiple IP's

Minimal numbers used 105% finance. It was a niche product. Not mainstream at all

 

[Deltaberry]

Sure- but the topic here is double ups in ten years across Sydney. No one is denying it can happen in some lucky spots- Im saying it shouldnt be relied upon as a reasonable expectation for most peoples purchases in most locations.

Too hard to tell what will happen to the market as a whole to be honest.

Why get some hung up over that though? Just go out and make some money and have fun.

Even if what you say is correct, it doesn't mean people won't be making millions every few months out there in property market on the right deals.