Where are we in the current Sydney property cycle?

This is an extract from a post on another chat site and I can't vouch for it's accuracy, but interesting, nonetheless.

following information was gathered by nobody else but RESIDEX, (the company of one Christopher Joye) major property spruikers and 'pushers' of a theory that property doubles every 7 - 10 years !


liverpool 2002 - 2009 20 % growth

fairield 2002 - 2009 20 % growth

parramatta 2002 - 2009 20 % growth


for all of you not from Sydney: these councils are the 'salt' of the earth of sydney and as such they share their caracteristics with other councils surounding them which would be holroyd,blacktown, penrith, auburn,bankstown campbeltown and camden...i'm sure we could include "hills shire" but in order to avoid any complaints i'm happy with "just" these 10 councils...


You can't make money on OPM with these poor cap gains.
 
This is an extract from a post on another chat site and I can't vouch for it's accuracy, but interesting, nonetheless.

liverpool 2002 - 2009 20 % growth

fairield 2002 - 2009 20 % growth

parramatta 2002 - 2009 20 % growth

You can't make money on OPM with these poor cap gains.

Sunfish
I find it strange that you've posted this because as you know all markets work in cycles.
People who bought in those suburbs in 2002 they've essentially bought at the peak of the boom so there was no much capital gains after that.
In fact, a price correction was to be expected so prices dropped and now they are back at their previous peak levels
 
You can't make money on OPM with these poor cap gains.

Annualised with assumptions:

Growth: 2.64% compound (20% over 7 years)
Yield: 5.0%
Neg Gearing: 1.0%
Total Return: 8.64% pa

Average mortgage interest expense 2002 - 2009: 7.2%

Net Return: 1.44% pa

Assume 5% deposit on $300K IP: $4,320 return pa on $15,000 invested or 28.8% nominal return.

I'd say 28.8% pa sounds like making money on OPM to me...

Cheers,
Michael
 
Sunfish
I find it strange that you've posted this because as you know all markets work in cycles.
People who bought in those suburbs in 2002 they've essentially bought at the peak of the boom so there was no much capital gains after that.
In fact, a price correction was to be expected so prices dropped and now they are back at their previous peak levels
Property doubles every 10 years!!! Wouldn't mind a dollar for every time I've read that here.

'Tis odd though: I've never seen an "*" and the disclaimer "But only if you buy at the bottom of the cycle."

I would be able to shout Mrs Fish a nice dinner with a dollar for every time I've read "Buy what you can, when you can fund it".

Making sweeping statements about markets and then dismissing sections of that market that do not meet expectations is disingenuous. Either the above statements are true or they are not.

If, however, you believe markets must be very carefully selected and also timed, (Does that sound like the share market?) how come, in all the years I've been here, has no newbe wanting to buy in been advised to wait for a year or so? Some brave individuals have tried to say something similar but they have all been run outa' town. ('Cept me! :D)

I know you have been around a long time, so do you remember how, back when you joined, that the common wisdom here was to buy in Sydney because that's where all the cap gains are? If I or Seechange spoke of provincial cities we were laughed at. (Seech did well in Rockhampton and Townsville was just hitting it's straps and Perth not long after)

So while you dismiss the possibility of any "intelligent" investor buying Sydney in '02, that opinion was never voiced on SS. In fact the reverse was true. The "old hands" were advising the newbes to jump in. Some must still be feeling the pain.
 

I know you have been around a long time, so do you remember how, back when you joined, that the common wisdom here was to buy in Sydney because that's where all the cap gains are?


Yeah I know all this and I'm with you 100%.
Money can be made in all markets and not only in Sydney.
Yes, it does help to time the market and we should try to time our entry early in each cycle or we could be waiting for a long time....
 
Sunfish
I find it strange that you've posted this because as you know all markets work in cycles.
People who bought in those suburbs in 2002 they've essentially bought at the peak of the boom so there was no much capital gains after that.
In fact, a price correction was to be expected so prices dropped and now they are back at their previous peak levels

I am not from Sydney but my guess is that you guys are in the early part of the boom cycle.
I am not too interested in stats I have been watching particular areas which have increased significantly and still moving. Some properties are selling within 5 days if priced correctly. I also have a fair bit of competition.

From my little computer I see the signs as very positive.

Cheers, MTR
 
Pretty hard to tell... roll the dice and take your chances I guess.

timing the market IS important, as is WHICH market, WHICH property, debt structure, yield, value add etc.
 
I've been watching a couple of inner-ring Sydney suburbs for while and think there's been a bit of a deceptive trend in the reported stats. Last year saw a lot of the below-median priced properties changing hands (FHOG effect in part and lack of well-off buyer/investor confidence too) but far fewer more pricey properties coming onto the market. I'm guessing that these pricier ones will come onto the market in far greater numbers this year and next (and that clearance rates will be impressive), and that they will create the appearance of a leap in reported median prices. It will look impressive, but really be a return to trend that was just temporarily interrupted by the GFC. If correct, this would suggest we're not just beginning the upturn, but recommencing the upturn that actually began 2 years ago, and has then perhaps only 2 rather than say 4 more years to run. Just a thought . . .
 
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I've been watching a couple of inner-ring Sydney suburbs for while and think there's been a bit of a deceptive trend in the reported stats. Last year saw a lot of the below-median priced properties changing hands (FHOG effect in part and lack of well-off buyer/investor confidence too) but far fewer more pricey properties coming onto the market. I'm guessing that these pricier ones will come onto the market in far greater numbers this year and next (and that clearance rates will be impressive), and that they will create the appearance of a leap in reported median prices. It will look impressive, but really be a return to trend that was just temporarily interrupted by the GFC. If correct, this would suggest we're not just beginning the upturn, but recommencing the upturn that actually began 2 years ago, and has then perhaps only 2 rather than say 4 more years to run. Just a thought . . .

some good points Belbo. my only concern would be the prevailing attitude in this country that the GFC is oh so 2009 and somehting that happened to the yanks. Severe credit rationing is still a reality.
 
Pretty hard to tell... roll the dice and take your chances I guess.

timing the market IS important, as is WHICH market, WHICH property, debt structure, yield, value add etc.

Hi Aus
so far it has worked, I refuse to get caught up in any negative media and will continue to buy properties which suit my criteria.

I see great opportunites NOW in Sydney market and I believe the timing is great, though 6 months ago would have been preferable. Areas I am targeting are as cheap as chips, so I am jumping in before the herd. I will not have a hope in hell when every man and his dog decides they need to buy, it will be too late. Areas I am targeting have already jumped 25% - 2009 and still rising and with high demand I only see it continuing to rise. I see it as easy money, just chasing a rising market.
Cheers, MTR
 
I am not from Sydney but my guess is that you guys are in the early part of the boom cycle.
Cheers, MTR
Hard to tell.
Property is already expensive IMO and not only in Sydney.
I think it's time for yields to increase before we see another boom.
But who knows? IMO the likely scenario is that we could be going up a little bit more and then sideways for a long time.
 
HI BV

I guess I look at property as cheap in Syd and Melb compared to Perth where I live.

my recent purchase which has not settled yet in Syd cost me $315,000 renting for $530pw.
I don't know how to work out the yield on this. Can you tell what it is?

I always add 5% on purchase price to cover stamp duty and all outgoings.
I am pleased with this return.

It may take me a while to find another property with good return, but they are definately there just have to look alot harder.

If the market does go sideways as you mentioned I expect that it will be short lived due to chronic housing shortage in NSW. The boom will be in 2011, 28 March my birthday, and that would be the best present. :)



Cheers, MTR
 
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nice yield MTR!

By my calculations:
yield = 530*52/(315000) = 8.75%

I echo darcy's question... it's got to have a granny flat, right, for such a good yield?
 
Certainly does.

I am now targeting areas near universities and properties where I can either put together a DA to onsell or just add value somehow. I think this is going to take a while to find.

Cheers, MTR
 
nice yield MTR!

By my calculations:
yield = 530*52/(315000) = 8.75%

I echo darcy's question... it's got to have a granny flat, right, for such a good yield?

Thanks.
yes, as mentioned before has granny flat, the beauty of this property is the granny flat is fenced off and has its own access. I am told that if this were not the case the front property would be rented out at a reduced rate.

Cheers, MTR
 
I rang my council this morning re town planning and it was made clear that I could not rent out a 2 br self contained unit attached to my house without going through the rezoning process to dual occupancy.

How could any council allow separate letting of a granny flat?
 
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