Well, we've been in a "slump" (at least in the eastern states) for 2-3 years now, so, according to the "7-11 year cycle" the property market in Sydney should start picking up in a couple of years. Perhaps a rate cut or two at the end of next year will spark investor interest. What do you think?
When is the next Sydney "boom" due?
- Thread starter enoughwealth
- Start date
Am hoping not before 4 years as I will be selling up my ppr in Perth to move to Sydney. Hoping to sell at a high and buy at a low.
hi enoughwealth
2008 to 2009 my crystal ball tells me.
and I hope its right.
but before then there is alot of movement still to happen.
there is alot of stock of sites in the banks hands and until that has been released you will not see any new off the plan sales comming on line in any real numbers.
its a sit and wait at the moment and for the lenders its a sit and stall and see who or what happens.
its a funny market even for me so I hope my ball is on the money.
I have seen with the last month a very unusual change and for me a bit of a worry and that is overseas syndicates land banking there is a couple of chinese and vietnamees syndicates buying up sites not sure the reasoning as yet maybe to tap this 2008 time line.
they are buying not only sydney but melbourne also.
I didn't give them the flight details for perth so you are ok dazzling.
I think any way.
they have a couple of site already done here in sydney and a couple very large projects.
so its again wait and see how it goes.
rates cuts or those types of changes are not going to be the spark from my ball.
I think you will see very soon the mop of money start to buy the sites the banks have, off the back of rental demand, and presales with 2 years tennant agreements and that will be the fuel.
my .002
2008 to 2009 my crystal ball tells me.
and I hope its right.
but before then there is alot of movement still to happen.
there is alot of stock of sites in the banks hands and until that has been released you will not see any new off the plan sales comming on line in any real numbers.
its a sit and wait at the moment and for the lenders its a sit and stall and see who or what happens.
its a funny market even for me so I hope my ball is on the money.
I have seen with the last month a very unusual change and for me a bit of a worry and that is overseas syndicates land banking there is a couple of chinese and vietnamees syndicates buying up sites not sure the reasoning as yet maybe to tap this 2008 time line.
they are buying not only sydney but melbourne also.
I didn't give them the flight details for perth so you are ok dazzling.
I think any way.
they have a couple of site already done here in sydney and a couple very large projects.
so its again wait and see how it goes.
rates cuts or those types of changes are not going to be the spark from my ball.
I think you will see very soon the mop of money start to buy the sites the banks have, off the back of rental demand, and presales with 2 years tennant agreements and that will be the fuel.
my .002
Historically, have we ever been in a situation where yields are so different between the cities? Sydney still looks very overvalued on a yield basis.
As for how Sydney booms affect other cities, lowb, what happened in the late 90's was that Sydney boomed, then people started thinking Sydney was too expensive so they took their money and moved to SE Qld, increasing prices there. Economic growth in Qld also attracted more businesses to go there instead of Sydney with its higher office costs, etc. While new migrants tended to choose Sydney, existing Sydney people moved North.
Alex
As for how Sydney booms affect other cities, lowb, what happened in the late 90's was that Sydney boomed, then people started thinking Sydney was too expensive so they took their money and moved to SE Qld, increasing prices there. Economic growth in Qld also attracted more businesses to go there instead of Sydney with its higher office costs, etc. While new migrants tended to choose Sydney, existing Sydney people moved North.
Alex
Don't be impatient.....you had your go back in '02 and '03.
Sit back, relax, and wait for us over here in Perth to finish having our turn.....we'll finish up just as soon as these mining and oil contracts come to a conclusion.
Well, I think you have some time up your sleeve. A lot of these resource contracts with South East Asia have a 10 year timeframe!! Can't see it slowing down in a hurry.
Dan
Volume may not slow down, but prices can. Aren't ore prices on fixed contracts negotiated every year? Spot prices can fluctuate, which will affect the agreed contract price.
Alex
How about tomorrow I want to do so much more. Bring it on ASAP.
Wishfull thinking? The property cycle machine is like watching the hour hand on a clock turning so slowly it seems not to move.
Simon
I want to do so much more. Bring it on ASAP.Wishfull thinking? The property cycle machine is like watching the hour hand on a clock turning so slowly it seems not to move.
Simon
Yes, this is true but the drive from China is relentless! The chinese government want to migrate 80,000 people a week from rural into urban environments. Oz is resource rich and will need to keep feeding this growing giant...
Dan
I tend to be a sceptic when it comes to 'this time it's different' theories. Will Chinese growth continue at this rate forever? 80,000 people a week is 40m a year. Sounds like a lot until you remember MOST of China's 1bn+ population is in rural areas, most of them illiterate peasants. Can every illiterate peasant suddenly become car buying middle class workers?
Is the Chinese system robust enough to accept all these migrants? Cities want the workers but don't want the hassle of providing services and housing for them. The old 'domicile' rules still prevent true freedom of movement. Will corruption and lack of political freedom cause backlashes in the hinterland (lots more peasant uprisings now compared to the past, often because local governments are seizing rural land for building). Are regional party cadres building useless infrastructure just to enhance their own prestige (US companies did it in the 70's and 80's. I'm betting the Chinese are worse)? Will protection of state owned enterprises cause bad debt blowups a la Japan in the 80's? What happens if China has a temporary stumble, just as mining capacity comes on-line all around the world? If Oz is building more mines, surely the Brazillians, etc are as well.
I'm just saying China has its issues, and those might cause it to stumble in the short term. Long term China will industrialise, but I wouldn't want to have just bought WA property and China has a 5-10 year recession. Just because the long term trend for commodities is up (which I believe in) doesn't mean growth is consistent year on year. Watch out for lumps.
I still say a safer long term plan is to find the city with the best combination of affordability, yield and -ve market sentiment and buy there. When that becomes hot, buy elsewhere. Perth would score bad marks on all three. Sydney has -ve sentiment but is not affordable and has low yields.
Remember when in the 80's Japan was going to take over the world? Or even earlier when the Bundesbank was going to dominate? When the NASDAQ hit 5000 and old economy stocks (and old economies like Australia) were going to be sidelined? Chinese supremacy is not guaranteed.
Alex
Wow, you lot are impatient.
So we had a market peak in 1989/90, and 2003, 14 years gap, and we think the boom is about ready to go again? Not likely.
I said not until at least 2014.
We have to see the end of the resource boom yet, [or more likely a platueing out] a stockmarket bubble [It's no where near a bubble yet, just fair value], a stockmarket bust, then a recession.
2014, things should be starting to fire. Rental yields will be back to respectable levels, and I will be cashed up after a huge run in soft commodities caused by global warming, depleted aquifers, food shortages and Chinese eating higher up the ladder.
See ya's.
So we had a market peak in 1989/90, and 2003, 14 years gap, and we think the boom is about ready to go again? Not likely.
I said not until at least 2014.
We have to see the end of the resource boom yet, [or more likely a platueing out] a stockmarket bubble [It's no where near a bubble yet, just fair value], a stockmarket bust, then a recession.
2014, things should be starting to fire. Rental yields will be back to respectable levels, and I will be cashed up after a huge run in soft commodities caused by global warming, depleted aquifers, food shortages and Chinese eating higher up the ladder.
See ya's.
Jim Rogers suggests that you invest in the commodity futures directly. This would be risky for non farmers. I've mucked around with grain futures, but it is generally hedging grain I've already, or likely to grow, so not as much risk for me.
I've never really looked into it as I'm highly geared into softs anyway. I invest in stocks and will invest in resi real estate to get some diversification. Really, farm land is the best way. Farm land has had great capital gains for many years despite what the AFR says.
Very leveraged too. For example, if wheat prices in a normal year go up 20%, a farmers profits would maybe double. If wheat prices doubled, farmers profits would be through the roof. Works in reverse too. If wheat prices drop 20%, there is no profit. That was what the case was 12 months ago, but luckily prices have doubled since then.
I wouldn't touch the soft commodity stocks like AWB, Graincorp etc. to get exposure. Too volatile. Plus they need big production to get big profits, but big production lowers prices of the commodity.
See ya's.
I've never really looked into it as I'm highly geared into softs anyway. I invest in stocks and will invest in resi real estate to get some diversification. Really, farm land is the best way. Farm land has had great capital gains for many years despite what the AFR says.
Very leveraged too. For example, if wheat prices in a normal year go up 20%, a farmers profits would maybe double. If wheat prices doubled, farmers profits would be through the roof. Works in reverse too. If wheat prices drop 20%, there is no profit. That was what the case was 12 months ago, but luckily prices have doubled since then.
I wouldn't touch the soft commodity stocks like AWB, Graincorp etc. to get exposure. Too volatile. Plus they need big production to get big profits, but big production lowers prices of the commodity.
See ya's.
Maybe not, but American decay is.
You worry too much, Alex.
The problems you mentioned are real. I accept that. But nothing goes up in a straight line, including China Inc. They will bounce back again from any such mishap. So keep some dry powder and benefit from "buying opportunities".The Jim Rogers book TC refers to is Hot Commodities and explains cycles well and is therefore good reading for all investors even if they don't plan to trade futures. Jim did not merely "make a million from the stock market", he made billions and retired in his early thirties. Since then he has travelled widely and written. He is a keen history student and it is this knowledge that has given him his edge.
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Check your maths Alex.
80,000 x 52 gives me a different answer.
Sydney was doing 6% as far back as 1998.
M
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This will be a huge factor in the future world. According to the world fact book,
https://www.cia.gov/cia/publications/factbook/geos/ch.html
49% of China's workforce is involved in agriculture. There is absolutely no need for this number of workers working the land. When a country mechanises it's agriculture the number of farmers needed is more like 3 to 4% as we have in Australia and it is still reducing, but I don't think it can go much further as machinery size is at a limit now. Gear can only get so heavy.
It will be interesting to watch how China deals with this problem.
Pitt Street. Thanks for your post. That is interesting.
See ya's.
Unfortunately the title of the thread is misleading. The poll question was when will Sydney achieve a 6%pa growth, however 6% growth will simply mark the tail end of the slump or beginning of a recovery.
I picked 2007 for Sydney to achieve 6% growth but I wouldn't be surprised if it didn't happen till 2008. But I think a boom is 5+ years away still.
I picked 2007 for Sydney to achieve 6% growth but I wouldn't be surprised if it didn't happen till 2008. But I think a boom is 5+ years away still.
I said 2010 for Sydney. I think it will stop sliding around 2007/08 and start a modest recovery in single digit returns for a few years from there before booming again sometime in 2010/11 if we're lucky. That's about the right sort of lag from the previous boom, but TC could well be right that it will be 2014 before we see any serious growth.
I'm still going to go through the motions with my development site and still bring it online ASAP. If nothing else, my yields improve significantly as 3 townhouses instead of one old cottage. I'll then let the market do its thing in its own good time. I can't effect the market, all I can do is put myself in a position that I benefit when it ultimately does move in earnest again.
Patience is a virtue in the property game...
Cheers,
Michael.
I'm still going to go through the motions with my development site and still bring it online ASAP. If nothing else, my yields improve significantly as 3 townhouses instead of one old cottage. I'll then let the market do its thing in its own good time. I can't effect the market, all I can do is put myself in a position that I benefit when it ultimately does move in earnest again.
Patience is a virtue in the property game...
Cheers,
Michael.
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