What's gonna stop the Sydney boom?

[MIW]

I'm young and wasn't old enough to see how the last boom ended.. Does it take an interest rate rise to stop it? Did it just stop over one weekend? Did something happen to the economy?


Just seems never ending atm doesn't it.. I mean, how much can a house in Blacktown, Penrith and Campbelltown really be worth? Could Campbelltown hit 600k for old established homes? Will Blacktown stop at 800k? Will Penrith stop at 650k?

Seems like every sale is the starting price for the next sale a week later.. It's become nuts.. Where are people getting their money from lol how is a standard house in Fairfield selling for 750k...the place is a dump.. I work there lol

Yes very interesting times ahead. Just attended the auction and it was crazy, similar property sold to one I bought 10 months ago at 33.5% MORE! I am taking a breather as I cannot understand the herd mentality, can anyone?
This property required a renovation too to make the place liveable?
A valuator is in tomorrow so let's see what the PPOR is worth?
I have never seen such times in Sydney, what's going on?

 

[lilman]

I think the market has another couple of years of growth but then a decline followed by a long period of stagnation. I'm thinking another 20-25% growth followed by 10-15% nominal decline over two years followed by 3-4 years of going nowhere.

a couple of years more of this growth? at this rate of growth a 3 bedroom house in mt druitt will be worth 1 million

 

[JDP1]

a couple of years more of this growth? at this rate of growth a 3 bedroom house in mt druitt will be worth 1 million

There is no justice if druittt touches anything near 1 Mil. Something is very seriously wrong if that happens.

 

[see_change]

It's very hard to get into the market at the moment. Many houses are selling within a few days of listing, and well before they even go to auction.

I think the market has another couple of years of growth but then a decline followed by a long period of stagnation. I'm thinking another 20-25% growth over two years, followed by 10-15% nominal decline over two years followed by 3-4 years of going nowhere.

OK for buying a PPOR for a long term hold, but not a great time to buy an IP because after the decline and stagnation phase it won't have provided much (if any) return after 7-8 years.

It would be a bit like buying a Sydney property in 2002-2003. By 2012 it was still worth roughly the same amount (in real terms). Fine for a PPOR but not a great investment.

The time to buy an IP in Sydney was 2007-2012 when prices were starting to edge up slowly, but before this massive boom really began.

I'd agree with much of what you're saying, but unless we have a nasty increase in interest rates , i think we will have a period of stagnation ,followed by a latter fall .

There may be a small initial fall as the market stops being crazy in terms of competition and people realize it's no longer a sellers market , but I think a significant fall is unlikely . Maybe 2-5 % though we will get to the point where there will be occasional motivated vendor who sells for less , but that the normal situation.

Cliff

 

[kamchatsky]

I'd agree with much of what you're saying, but unless we have a nasty increase in interest rates , i think we will have a period of stagnation ,followed by a latter fall .

There may be a small initial fall as the market stops being crazy in terms of competition and people realize it's no longer a sellers market , but I think a significant fall is unlikely . Maybe 2-5 % though we will get to the point where there will be occasional motivated vendor who sells for less , but that the normal situation.

Cliff

The challenge is whether IR will be up to say 7% again. US, China, Europe are all in historical low IRs, and that has been for a while. This doesn't fire up economy much at all, in terms of jobs etc. But sending more cheap money into properties and stocks around the world.

So unless somehow there is some catalyst for more productive growth, IR will remain low for some foreseeable future now that the mining boom has ended.

That's probably why so many people are desperately buy properties as they don't think IR will go up anytime soon, and they don't want to miss the boat. I was thinking of buying another IP in Sydney but I just don't know when the music stops, especially now that the price is already out of control, and tomorrow RBA could add fuel to the fire.

 

[see_change]

a couple of years more of this growth? at this rate of growth a 3 bedroom house in mt druitt will be worth 1 million

don't think so ....

Historically it doubles each cycle , and it's getting close to that now . It's getting close to the pooint where for the massess it's going to be unafordable and that's the thing that will slow it down .

The valuers will be getting twitchy now .

Cliff

 

[ej89]

I can't see western sydney slowing down anytime soon. Rail links, business parks and the airport will keep growth going for a long time. I think the only thing that will stop it is a recession or rapid IR increases.. People in the west just go further and further out to get that cheap house cos theyre already used to driving far, but those outter homes wont be too far when you have jobs created all over the west

 

[windyzz]

Anywhere around Parramatta will be the strongest growth in the next decade or so imo....

 

[see_change]

Sometimes I'm tempted to make a list of other people's predicationspredications , so I can check them out in a few years time to point out people's errors .

Those last two posts would have to be near the top of the list , but , hey I got better things to do .

My personal predication is that the parramatta , outer west will have one of the lowest growths over the next ten years .

Cliff

 

[willair]

One only has to go back to where and when the prices started to climb,add a mix of media very low interest rates,then you will understand the random affects and the maybe adverse or fragile outcomes over the next 18 months..

 

[Ausprop]

got a lot of time for this bloke, an interesting read:

http://www.hegney.com.au/news/low-rates-a-sydney-drama/

 

[windyzz]

Sometimes I'm tempted to make a list of other people's predicationspredications , so I can check them out in a few years time to point out people's errors .

Those last two posts would have to be near the top of the list , but , hey I got better things to do .

My personal predication is that the parramatta , outer west will have one of the lowest growths over the next ten years .

Cliff

Hey it's people opinion.. it could be wrong and it could be right. you don't have to pin point people mistake.

The reason we pointed out that west will be strong us due to infrastructure being poured in by the government in the west area, and also hearing CBA, Ato, KPMG, etc moving to Parramatta + university of western Sydney is currently being built near the Parramatta station, 900millions upgrade to Westmead hospital, first high rise schools, and migration is very strong .
All these numbers pointing to price growth in the future.

 

[see_change]

Hey it's people opinion.. it could be wrong and it could be right. you don't have to pin point people mistake.

.

I apologise , I shouldn't have done that . It was a silly thing to say and is only likely to put people off in giving their opinions which is counter to the point of the forum .

There is always lots of investment in Western Sydney . It's a big place , but my thoughts is it won't fundamentally change the dynamics of the area . Western Sydney , IMHO , is always going to follow the rest of Sydney and what we have seen recently is mainly catch up .

I don't expect the west to out perform the rest.

I think that we are getting closer to the peak , though with rates we might still have more movement .

Cliff

 

[windyzz]

I apologise , I shouldn't have done that . It was a silly thing to say and is only likely to put people off in giving their opinions which is counter to the point of the forum .

There is always lots of investment in Western Sydney . It's a big place , but my thoughts is it won't fundamentally change the dynamics of the area . Western Sydney , IMHO , is always going to follow the rest of Sydney and what we have seen recently is mainly catch up .

I don't expect the west to out perform the rest.

I think that we are getting closer to the peak , though with rates we might still have more movement .

Cliff

No worries..

I think the future is pretty bleak.. Negative gearing might be taken off, along with Capital gain tax concession, and tightening up lending rules for investor, poor economy around the world + property prices are too high...

 

[sumterrence]

No worries..

I think the future is pretty bleak.. Negative gearing might be taken off, along with Capital gain tax concession, and tightening up lending rules for investor, poor economy around the world + property prices are too high...

I already see how the tightening lending policy work, I'm at the moment applying for a home loan with my fianc? and the lender ask for a copy of our passport as part of the new lending policy which previously they never ask me for it

 

[neK]

I think valuers are going to stop the boom - especially if the valuations are coming in short and people can't borrow as much.

Maybe some brokers can comment and advise if they are experiencing valuations lower than the purchase price.

 

[KangaBanga]

stock market correction/crash

Sydney/Melbourne housing market will probably only correct after the stock market corrects or crashes. usually the big housing market corrections lag stock market corrections at least about half a year??

IIRC the most recent example was around march 2011 the ASX200 corrected from 4800 to 4000+ points in sep 2011 and a few months after it became a buyers market. I believe reading some ppl here picked up good buys towards the end of 2011.

 

[see_change]

I think valuers are going to stop the boom - especially if the valuations are coming in short and people can't borrow as much.

Maybe some brokers can comment and advise if they are experiencing valuations lower than the purchase price.

I would have thought if that was an issue , mt Druitt wouldn't be getting to where it is .

I think that so called MACROPRUDENTIAL changes are more likely , but the reality is we have booms on a regular basis and this is one of several I've seen and they're all the same .

Cliff

 

[KangaBanga]

I would have thought if that was an issue , mt Druitt wouldn't be getting to where it is .

I think that so called MACROPRUDENTIAL changes are more likely , but the reality is we have booms on a regular basis and this is one of several I've seen and they're all the same .

Cliff

So have the booms correlated well to the stock market performance?

 

[JohnHenry]

With this type of Infrastructure Project coming: http://www.smh.com.au/nsw/transport...ive-city-shaping-project-20150616-ghoy0v.html

after West Connex, Northwest and South West rails, it is going to be a profitable to invest in Sydney for the years to come.