This article seems to be fairly definitive on Sydney house/apartment prices in respect to affordability.

www.abc.net.au/radionational/programs/themoney/where-is-housing-affordable-in-sydney/7266656

Short precis:- If you are already in, you might be OK. If you are not in, forget about it.

Beaglebuddy said..

FormulaNova said..
It seems that prices have fallen Sydney for the last quarter.

I can't find the original article I read earlier today, but here's one relating to it:

www.smh.com.au/business/the-economy/rbas-glenn-stevens-says-moderating-house-prices-helpful-20160322-gnokht.html

For some reason they don't seem to make a song and dance about house prices falling... go figure. 'Domain' seem to have some interest in selling houses for some reason..

And so it begins...

There was something on TV the other night about the USA and Cleveland Ohio in particular where there were the situation you described earlier where people would just vacate properties. Here it is not as easy to avoid the debt.

There, it was amazing how many people lost out, and there were even people who kept paying their mortgages even though there houses were worth almost nothing because everyone around them had left. I had to feel sorry for the people still paying for 'their house' when there were dozens of vacant houses around that no one was paying for, but to keep ownership of their house, they had to keep paying. They would have been better off just not paying.

It was good to see though that there was some attempt by the courts to make the banks foreclose on some houses so that the owner could avoid the worthless mortgage and then resume occupancy for next to no cost. It is a very weird situation though.

I doubt it could get like that here, but you never know. Over here, I am sure the banks would chase you for the rest of your life to get the debt, and in some cases they might even sell that debt to someone else, who will take even more. There was an article the other day where someone defaulted on a credit card debt, it got sold to a collection agency who added a whole host of fees and charges, and they pretty much lost everything they had, which in this case was their house.

Well FormulaNova in so many situations it came down to the fact there was nothing left to do, when the adjustable rate interest only loans would reset and double the monthly payments and no banks would refinance. You cannot get blood from a stone.

it's been a couple more months. Are you seeing any changes in your local area?

Haircut said..
Is anyone seeing a change in the real estate market lately, particularly Sydney? There doesn't seem to be any positive talk about anything economic of late, except that people bought a lot of christmas presents

Cairns is the hot property market at the moment.

nqbuyersagent.com.au

Kozzie said..

Harrow said..

Here's an interesting little anecdote. A friend of ours was trying to buy into the area I live in. For the last 2 years they have been outbid at every auction by Asian investors. Last month they finally manage to win the auction of quite a nice house. How did they manage it??? The house street number was 44, (double death in Chinese culture), so there were no Asian bidders.

lets go to china and buy the 44th floor of all the highrises for peanuts

Ha ha, don't you know, they skip those floors - they don't exist!

wow, that's awesome for them. we have sooo many apartments being built here, not sure what's going to happen. we had the first bit of realestate "gloomy outlook" type flyer put in our letterbox in ages, recommending people sell now, and almost overnight 5 houses went up for sale in our street

A friend of mine in Sydney bought a house recently and was telling me that clearance rates are still very high.

At the same time he was telling me almost no one was bidding at the auctions and that he had the real-estate agent call him up and tell him that even though other buyers had made higher offers, they all wanted a longer settlement times, so they let him buy it... yeah. Sure. I guess that's what realestate agents do to sell.

The comment about the clearance rates made sense when later I read an article where they said the clearance rates were high because there was almost nothing on the market, i.e. not many people are buying, and sellers aren't trying to sell because they think the chances of selling are not so good.

In another example, a work colleague in Perth told me that they took a year to sell their place and got considerably less after that year than they expected at the outset. He also suggested offering 10% less than the asking price if I were to buy a place there, because sellers are motivated.

No one ever sold a headline "Nothing much happening. A bit up, a bit down." so it's only ever gonna be reported as boom or bust. Actually, no one has any idea.

a couple more months - anyone seeing any real changes?

How are things looking down there these days?

In my area in the southern suburbs of Sydney, I think prices are still holding steady.

The only real data-point, sort of, is a work colleague that sold his half of a duplex and got 'not quite what they wanted'. Whether that was because prices are tight or if there expectations were too high, I don't know.

There seems to be a bit of a boom in turning any suitable block into a duplex site, but this might even be a symptom of larger building projects slowing down.

That said there are still some huge developments being built. When I was talking to a shop owner next to the 'brick-pit' site in my area, he was saying that bus-loads of Chinese buyers would turn up, look at the empty site, and presumably buy. The suggestion was that of 700 or so units, a lot of them will be foreign owned. This is only guessing though, based on what one person saw.

There is also another similar development proposed in the same area.

If I was an investor, I would be a bit worried about the pressure being put on interest-only loans. With higher interest rates, investors will find rental returns cover less of the debt, and the capital growth they are relying on is looking more shaky.

Anyway, even if prices were falling, it would take ages to figure it out. The real estate agents would try to talk it up, and you wouldn't know until 6 months later.

petermac33 said..
If prices are really that high in Sydney, why not move a bit further west to Adelaide or Perth?



Many people move to Sydney to massage their ego. It can't be for much else when you look at value for money.



The answer is the price is 80-90 percent artificial. True value is probably closer to 150k - 200K.

To answer your questions, at least in my experience, I think it is hard to find work in Perth. I work in IT and despite all the mining billions coming from the area, I think a lot of the mining businesses offshore their IT or base it elsewhere. Apart from that, what does the Perth economy have? I suspect that the government missed an opportunity to diversify industries, but I guess there is not much you can do with a relatively small population.

Which is why... a lot of people move to Sydney and Melbourne. There is a large population, so a large variety of jobs. With the number of people, there is demand for almost everything. A lot of companies setup their headquarters in these cities because it is easier to get staff when there is a huge population. You could have a better lifestyle if you moved to Newcastle or Wollongong, and still have access to more jobs.

All prices are artificial. If there is no demand, there is no value. I noticed this when before the GFC there was a rise in holiday home suburbs on the north and south coasts of NSW. After the GFC, when things were tight for some, it was like a fire-sale in some areas. Once people realised that the rental returns were abysmal and they couldn't afford the luxury of a holiday home, prices fell.

I don't agree with your implication that rates would increase to a level where it will make people suffer. As people are so highly geared in property, a slight increase has a huge effect. The RBA are not trying to create a disaster for the economy, they are trying to prevent one. I will guess that we will not see 10% or above for a long long time.

House in mount druit sold for 1.2 million.
New record but it's
Nothing extra special either.

stuff is selling and renting high in the street where i live too which is in the 600k - 1.2m range and 15-20yo houses, however areas even closer to the broadwater (Hope Island) many of them 30yo and older houses, and were selling / renting hot last year are not moving like they were, which i think is a bit odd. I'm not sure if it's a genuine change in market or if it was never really a hot market and more a case of investors rushing in thinking they were onto something that wasn't. Now there seems to be pockets that are doing well and pockets that are starting to suffer

this is SQM's yield stats for my postcode

sqmresearch.com.au/property-rental-yield.php?postcode=4212&t=1

vacancy

www.sqmresearch.com.au/graph_vacancy.php?postcode=4212&t=1

coomera used to be highly flogged by agents when we were looking to buy. vacancy rates have changed alot if the stats are right

www.sqmresearch.com.au/graph_vacancy.php?postcode=4209&t=1

for gold and sunny coast - what do you think will happen after the commonwealth games are over?