Forums > General Discussion   Shooting the breeze...

Sydney house prices

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Created by Haircut > 9 months ago, 11 Jan 2016
Adriano
6048 posts
12 Sep 2017 3:13PM
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Main said..

AUS1111 said..
Can anyone provide some examples of a bubble that didn't burst?

That assumes its a bubble !

start comparing the price per $m2 to other "world" cities and its about right....

Hahaha. Sure mate, it's not a bubble. Repeat it to yourself over a beer every evening.

Face it, the slightest economic downturn, a 1-2% increase in interest rates and the market is stuffed.

Haircut
QLD, 6103 posts
12 Sep 2017 5:55PM
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Checking some suburb stats again for this month gone, Helensvale, Coomera, Hope island Coombabah, Runaway bay, basically all of the very northern Gold Coast suburbs have only sold half per month of what they were selling in 2015 and 2016, stocks for sale have not dropped or are higher.

It's now been going on for a few months in a row. Surely this will see some kind of a change in prices?

SydneyDan
6 posts
12 Sep 2017 6:30PM
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Main said..

SydneyDan said..
I've been in Sydney over a year now and the property market is insane, I'm looking at moving to Brisbane but the problem is there's not a lot of work there. I cannot bring myself to buy in Sydney though and I've had enough of paying someone else's mortgage off.



rent in sydney
buy in brisbane ( and rent it out)


I have been thinking about that, it would be my first property buy and I am just not sure of how much hassle a rental would be, e.g. periods where it is not let, bad tenants, and with me being in Sydney what sort of issues it would add being further away, all in all I think I'm cautious about it but I need to do something. Decisions decisions!

Harrow
NSW, 2089 posts
12 Sep 2017 11:37PM
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Two bedroom unit near a station. You will never have an empty rental.

evlPanda
NSW, 8034 posts
13 Sep 2017 10:46AM
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Adriano said..


Main said..



AUS1111 said..
Can anyone provide some examples of a bubble that didn't burst?



That assumes its a bubble !

start comparing the price per $m2 to other "world" cities and its about right....



Hahaha. Sure mate, it's not a bubble. Repeat it to yourself over a beer every evening.

Face it, the slightest economic downturn, a 1-2% increase in interest rates and the market is stuffed.


Won't happen.

The reason being that during an economic downturn interest rates go down.
If interest rates go up, then there will be an economic downturn, a crash, aaaaaand interest rates will go down.

Interest rates will not go up unless there is an economic upturn, in which case people can afford the higher interest rates. That isn't likely to happen for a long time, for a lot of reasons.

The Reserve Bank has painted itself into a corner when it comes to property prices. If it puts rates up, then there will be an economic downturn, and rates need to go down again.





Bara
WA, 184 posts
13 Sep 2017 9:15AM
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The fly in your ointment there panda is that rates cant go down from here (ie we are already at negative real interest rates here in oz and around the developed world). All the bullets have already been fired before we even have a real downturn which is why these clowns now talk about "helicopter money"

So the conundrum is when we do have an inevitable slowdown here in oz we cant drop rates in any meaningful way to cushion the property downturn. And thats why it can potentially get truly ugly this time.

AUS1111
WA, 2646 posts
Wednesday , 13 Sep 2017 9:20AM
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evlPanda said..

Interest rates will not go up unless there is an economic upturn, in which case people can afford the higher interest rates.




This is a dangerous attitude to take. Interest rates will rise in line with inflation expectations, and this can happen in the absence of an economic upturn. Inflation is the issue, not economic growth.

If many people are complacent based on the misguided belief that interest rates won't rise then we have a all the makings of a bubble. Whenever price rises are based on collective psychological factors rather than economic fundamentals, that screams danger, as sentiment can and does change very quickly.

I live in a city where property prices have been falling (in real terms) for ten years. The bubble never burst - it has just slowly deflated over ten years, which may be hard to comprehend for a Sydneysider. Ten years of slow declines.

Perth is a nice place to live - is it underpriced?

myusernam
QLD, 4272 posts
Wednesday , 13 Sep 2017 11:23AM
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dont forget the overriding rule. demand vs supply.
So long as the population keeps increasing (i.e. the artificial pumping of the economy by immigrants) and because of the geographical limitations of sydney and the commuting issue, i cant see property prices falling that much. because at the end of the day, there will still be enough people with work who dont want to commute 1.5 hours to their shxtty office job in the city. period.'
the only problem is, do re really want the burden - enviromental and social that the high immigration rate brings

u think sydney is bad? check out london

nnnbrewery
NSW, 14 posts
Wednesday , 13 Sep 2017 12:20PM
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Just remember when talking about "demand vs supply" that "demand" can change also. A lot of our "demand" side is investor driven. Many of these investors are losing money (i.e. "negatively geared") or are getting very poor returns. They are relying on capital gains. If property prices stop increasing at a rate to justify such poor returns, they will stop investing, and some will try and get out. At some point, people can borrow no more to keep the prices increasing.

"demand vs supply", "people need somewhere to live", "it's different here"... this was all said in Ireland before the crash. I lived there.

In the worst case scenario, demand will drop like a stone. Immigration will reduce (why would you come here by choice if there's a big recession underway?), emigration will increase, and people will move out of their 2-bedroom units where they live by themselves to mum 'n dad, or share houses. ****! there goes all that "demand". I have seen the effects of this... cost of living comes down. Unemployment goes up. Wages go down. Banks get bailed out and part or fully nationalised (but none of the bankers go to jail). Want 20% off your rental rate? just ask for it... or move to somewhere the landlord is desperate to just get "some" money in the door.

I don't really think we'll see it to the same extent here, but to just blindly say "it won't happen here" is nuts. If this bubble pops, a lot of people are going to get very badly burnt, and it will be ugly. Our government will likely piss away billions of dollars to keep the banks running, because guess what they rely on for their mega profits now?

Adriano
6048 posts
Wednesday , 13 Sep 2017 10:53AM
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Bara said..
The fly in your ointment there panda is that rates cant go down from here (ie we are already at negative real interest rates here in oz and around the developed world). All the bullets have already been fired before we even have a real downturn which is why these clowns now talk about "helicopter money"

So the conundrum is when we do have an inevitable slowdown here in oz we cant drop rates in any meaningful way to cushion the property downturn. And thats why it can potentially get truly ugly this time.


Exactly. Plus, if the downturn is significant, even zero interest rates like in Japan or the US don't help. Everything crashes.

Adriano
6048 posts
Wednesday , 13 Sep 2017 10:55AM
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myusernam said..
dont forget the overriding rule. demand vs supply.
So long as the population keeps increasing (i.e. the artificial pumping of the economy by immigrants) and because of the geographical limitations of sydney and the commuting issue, i cant see property prices falling that much. because at the end of the day, there will still be enough people with work who dont want to commute 1.5 hours to their shxtty office job in the city. period.'
the only problem is, do re really want the burden - enviromental and social that the high immigration rate brings

u think sydney is bad? check out london


Yes, until the economy tanks and people start losing their jobs. Then what pays for the mortgage?

myusernam
QLD, 4272 posts
Wednesday , 13 Sep 2017 2:08PM
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Adriano said..

myusernam said..
dont forget the overriding rule. demand vs supply.
So long as the population keeps increasing (i.e. the artificial pumping of the economy by immigrants) and because of the geographical limitations of sydney and the commuting issue, i cant see property prices falling that much. because at the end of the day, there will still be enough people with work who dont want to commute 1.5 hours to their shxtty office job in the city. period.'
the only problem is, do re really want the burden - enviromental and social that the high immigration rate brings

u think sydney is bad? check out london



Yes, until the economy tanks and people start losing their jobs. Then what pays for the mortgage?


true. dont worry, theres no way im buying an IP in sydney or melbourne. I couldn't even if I wanted to. But i will continue to buy them in regional areas where the gross yield is 6%plus and the purchse price is below that of replacement. thats a no brainer. I cant see builders wages or the price of materials dropping that much (ok wages but as if the material costs are ever going to get cheaper)

Adriano
6048 posts
Wednesday , 13 Sep 2017 12:34PM
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myusernam said..

Adriano said..


myusernam said..
dont forget the overriding rule. demand vs supply.
So long as the population keeps increasing (i.e. the artificial pumping of the economy by immigrants) and because of the geographical limitations of sydney and the commuting issue, i cant see property prices falling that much. because at the end of the day, there will still be enough people with work who dont want to commute 1.5 hours to their shxtty office job in the city. period.'
the only problem is, do re really want the burden - enviromental and social that the high immigration rate brings

u think sydney is bad? check out london


Yes, until the economy tanks and people start losing their jobs. Then what pays for the mortgage?


true. dont worry, theres no way im buying an IP in sydney or melbourne. I couldn't even if I wanted to. But i will continue to buy them in regional areas where the gross yield is 6%plus and the purchse price is below that of replacement. thats a no brainer. I cant see builders wages or the price of materials dropping that much (ok wages but as if the material costs are ever going to get cheaper)


Smart strategy. Those long term returns are just under long term superannuation returns.

Material costs go up about 6%/annum so you're about right.

vosadrian
NSW, 160 posts
Wednesday , 13 Sep 2017 4:31PM
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At what point in time did Adriano and the other bubble crash proclaimers here start saying the Sydney property market was in a bubble and was about to pop and was therefore not a wise buying decision? this year, 5 years ago, 10 years ago?

Ever since I bought my first property 20 years ago, I have kept an eye on the property market and there has almost always been a vocal group of people on various forums saying that property is about to crash. In that time there have been a couple of blips where it lost a little value (<20%) for a short time (<2 years) only to turn around and recover any losses quick smart and march on and upwards with renewed vigour. Any losses fell way short of the claimed collapse.

While I mortgaged my residence, I bought two investment properties. I sold one earlier this year for double what I payed for it 10 years earlier and I have kept the other. 5 years ago I sold my residence for more than double what I payed for 15 years earlier and bought another residence that is now valued about double what I payed for it 5 years ago. Around the time I upgraded the residence, the cries of a collapse were the loudest I can remember.

Could the market collapse tomorrow? Sure it could. Could it collapse to a level to make any of my purchase decisions as bad as the vocal bubble pop cryers of the time claimed? Not impossible..... but very unlikely. Using my current residence as an example, if the value halved on a bubble popping, it would be worth what I payed for it. I can live with that. I like living there, I can afford to pay the mortgage the same way I could when I took the mortgage 5 years ago.

Of course if the price drops a little there will always be someone who bought at the wrong time just before or after the peak and they will lose out. Some may be forced to sell at a loss or whatever else they do to save their financial life. But most are in a position like me where they did not buy at the peak of the recent boom and therefore will still be ahead even if sizeable losses are made.

So I am curious when all the bubble popping people here started their chant? How much has the market increased since then? How much would the market now need to lose to validate your position on the property market had you decided not to buy when you started your chant? It is possible.... maybe even likely that your call for a crash may be right this time... but what have you lost out on in the past when you made similar calls but were wrong?

AUS1111
WA, 2646 posts
Wednesday , 13 Sep 2017 2:36PM
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The bubble doesn't need to "pop", it can deflate. Call it a "balloon". This is a problem for people whose investment strategy is geared toward expectations of continued capital growth.

Adriano
6048 posts
Wednesday , 13 Sep 2017 3:58PM
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AUS1111 said..
The bubble doesn't need to "pop", it can deflate. Call it a "balloon". This is a problem for people whose investment strategy is geared toward expectations of continued capital growth.


Exactly. Vis. Perth.

myusernam
QLD, 4272 posts
Wednesday , 13 Sep 2017 7:40PM
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Adriano said..

AUS1111 said..
The bubble doesn't need to "pop", it can deflate. Call it a "balloon". This is a problem for people whose investment strategy is geared toward expectations of continued capital growth.



Exactly. Vis. Perth.


and darwin

Main
QLD, 819 posts
Wednesday , 13 Sep 2017 7:56PM
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SydneyDan said..

Main said..


SydneyDan said..
I've been in Sydney over a year now and the property market is insane, I'm looking at moving to Brisbane but the problem is there's not a lot of work there. I cannot bring myself to buy in Sydney though and I've had enough of paying someone else's mortgage off.




rent in sydney
buy in brisbane ( and rent it out)



I have been thinking about that, it would be my first property buy and I am just not sure of how much hassle a rental would be, e.g. periods where it is not let, bad tenants, and with me being in Sydney what sort of issues it would add being further away, all in all I think I'm cautious about it but I need to do something. Decisions decisions!


Bite the bullet!

buy house on land within 10km of the cbd with good public transport ! closer to the CBD the better

Main
QLD, 819 posts
Wednesday , 13 Sep 2017 7:57PM
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Haircut said..
Checking some suburb stats again for this month gone, Helensvale, Coomera, Hope island Coombabah, Runaway bay, basically all of the very northern Gold Coast suburbs have only sold half per month of what they were selling in 2015 and 2016, stocks for sale have not dropped or are higher.

It's now been going on for a few months in a row. Surely this will see some kind of a change in prices?


winter !

sales will pick up in Summer

Main
QLD, 819 posts
Wednesday , 13 Sep 2017 7:59PM
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Adriano said..

Main said..


AUS1111 said..
Can anyone provide some examples of a bubble that didn't burst?


That assumes its a bubble !

start comparing the price per $m2 to other "world" cities and its about right....


Hahaha. Sure mate, it's not a bubble. Repeat it to yourself over a beer every evening.

Face it, the slightest economic downturn, a 1-2% increase in interest rates and the market is stuffed.



if it was that easy to pick I'd punt it

BUT

the markets will stay irrational a lot longer than you and I can stay solvent

heard that saying before ?

albers
NSW, 1294 posts
Wednesday , 13 Sep 2017 8:22PM
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Philip J Anderson

Adriano
6048 posts
Thursday , 14 Sep 2017 5:34AM
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Main said..if it was that easy to pick I'd punt it

Adriano said..


Main said..



AUS1111 said..
Can anyone provide some examples of a bubble that didn't burst?



That assumes its a bubble !

start comparing the price per $m2 to other "world" cities and its about right....



Hahaha. Sure mate, it's not a bubble. Repeat it to yourself over a beer every evening.

Face it, the slightest economic downturn, a 1-2% increase in interest rates and the market is stuffed.




if it was that easy to pick I'd punt it

BUT

the markets will stay irrational a lot longer than you and I can stay solvent

heard that saying before ?


True but I'm not picking anything - just stating the variables that will cause a crash in the property market.

bazz61
QLD, 698 posts
Thursday , 14 Sep 2017 8:22AM
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vosadrian said..
At what point in time did Adriano and the other bubble crash proclaimers here start saying the Sydney property market was in a bubble and was about to pop and was therefore not a wise buying decision? this year, 5 years ago, 10 years ago?

Ever since I bought my first property 20 years ago, I have kept an eye on the property market and there has almost always been a vocal group of people on various forums saying that property is about to crash. In that time there have been a couple of blips where it lost a little value (<20%) for a short time (
While I mortgaged my residence, I bought two investment properties. I sold one earlier this year for double what I payed for it 10 years earlier and I have kept the other. 5 years ago I sold my residence for more than double what I payed for 15 years earlier and bought another residence that is now valued about double what I payed for it 5 years ago. Around the time I upgraded the residence, the cries of a collapse were the loudest I can remember.

Could the market collapse tomorrow? Sure it could. Could it collapse to a level to make any of my purchase decisions as bad as the vocal bubble pop cryers of the time claimed? Not impossible..... but very unlikely. Using my current residence as an example, if the value halved on a bubble popping, it would be worth what I payed for it. I can live with that. I like living there, I can afford to pay the mortgage the same way I could when I took the mortgage 5 years ago.

Of course if the price drops a little there will always be someone who bought at the wrong time just before or after the peak and they will lose out. Some may be forced to sell at a loss or whatever else they do to save their financial life. But most are in a position like me where they did not buy at the peak of the recent boom and therefore will still be ahead even if sizeable losses are made.

So I am curious when all the bubble popping people here started their chant? How much has the market increased since then? How much would the market now need to lose to validate your position on the property market had you decided not to buy when you started your chant? It is possible.... maybe even likely that your call for a crash may be right this time... but what have you lost out on in the past when you made similar calls but were wrong?


yes a lot of people as yourself have done well from the price rises ..but at some point the ability to service a large mortgage ,the casualization of the work force , interest rate rises ,falling disposable incomes the ability to pay rent etc will impact on property prices ,the actual rental return % is low, how many 1st home buyers are out there now ..? not many I hazard to guess its only overseas buyers and speculators that are propping up the market...

vosadrian
NSW, 160 posts
Thursday , 14 Sep 2017 8:43AM
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bazz61 said..

vosadrian said..
At what point in time did Adriano and the other bubble crash proclaimers here start saying the Sydney property market was in a bubble and was about to pop and was therefore not a wise buying decision? this year, 5 years ago, 10 years ago?

Ever since I bought my first property 20 years ago, I have kept an eye on the property market and there has almost always been a vocal group of people on various forums saying that property is about to crash. In that time there have been a couple of blips where it lost a little value (<20%) for a short time (
While I mortgaged my residence, I bought two investment properties. I sold one earlier this year for double what I payed for it 10 years earlier and I have kept the other. 5 years ago I sold my residence for more than double what I payed for 15 years earlier and bought another residence that is now valued about double what I payed for it 5 years ago. Around the time I upgraded the residence, the cries of a collapse were the loudest I can remember.

Could the market collapse tomorrow? Sure it could. Could it collapse to a level to make any of my purchase decisions as bad as the vocal bubble pop cryers of the time claimed? Not impossible..... but very unlikely. Using my current residence as an example, if the value halved on a bubble popping, it would be worth what I payed for it. I can live with that. I like living there, I can afford to pay the mortgage the same way I could when I took the mortgage 5 years ago.

Of course if the price drops a little there will always be someone who bought at the wrong time just before or after the peak and they will lose out. Some may be forced to sell at a loss or whatever else they do to save their financial life. But most are in a position like me where they did not buy at the peak of the recent boom and therefore will still be ahead even if sizeable losses are made.

So I am curious when all the bubble popping people here started their chant? How much has the market increased since then? How much would the market now need to lose to validate your position on the property market had you decided not to buy when you started your chant? It is possible.... maybe even likely that your call for a crash may be right this time... but what have you lost out on in the past when you made similar calls but were wrong?



yes a lot of people as yourself have done well from the price rises ..but at some point the ability to service a large mortgage ,the casualization of the work force , interest rate rises ,falling disposable incomes the ability to pay rent etc will impact on property prices ,the actual rental return % is low, how many 1st home buyers are out there now ..? not many I hazard to guess its only overseas buyers and speculators that are propping up the market...


I'm just curious how many people who think Sydney housing should now fall have thought this for some time and if they did not buy or gave advice to others to not buy, what position would those people be in if they had instead bought?

I am not saying whether Sydney housing is about to bust or boom or deflate or stagnate..... I am just saying that a call for a crash or adjustment of Sydney is nothing new. Many people have been predicting it for 20 years.... most (all?) of those people have either acted upon poor advice or given poor advice as people would have been better off had they ignored this advice.

If you continually say Sydney housing prices are overpriced and going to crash for a long enough time, you will eventually be right and gloat about how you were right and all those people bought were not as clever as you. A broken clock still reads the right time twice a day.

So when is that point when all the factors you mention come to a head? And when did you first think this? I agree that there are many factors that look unsustainable... but they have been "unsustainable" for some time and yet people have done very well in capital growth in that time.

evlPanda
NSW, 8034 posts
Thursday , 14 Sep 2017 8:48AM
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bazz61 said..

vosadrian said..
At what point in time did Adriano and the other bubble crash proclaimers here start saying the Sydney property market was in a bubble and was about to pop and was therefore not a wise buying decision? this year, 5 years ago, 10 years ago?

Ever since I bought my first property 20 years ago, I have kept an eye on the property market and there has almost always been a vocal group of people on various forums saying that property is about to crash. In that time there have been a couple of blips where it lost a little value (<20%) for a short time (
While I mortgaged my residence, I bought two investment properties. I sold one earlier this year for double what I payed for it 10 years earlier and I have kept the other. 5 years ago I sold my residence for more than double what I payed for 15 years earlier and bought another residence that is now valued about double what I payed for it 5 years ago. Around the time I upgraded the residence, the cries of a collapse were the loudest I can remember.

Could the market collapse tomorrow? Sure it could. Could it collapse to a level to make any of my purchase decisions as bad as the vocal bubble pop cryers of the time claimed? Not impossible..... but very unlikely. Using my current residence as an example, if the value halved on a bubble popping, it would be worth what I payed for it. I can live with that. I like living there, I can afford to pay the mortgage the same way I could when I took the mortgage 5 years ago.

Of course if the price drops a little there will always be someone who bought at the wrong time just before or after the peak and they will lose out. Some may be forced to sell at a loss or whatever else they do to save their financial life. But most are in a position like me where they did not buy at the peak of the recent boom and therefore will still be ahead even if sizeable losses are made.

So I am curious when all the bubble popping people here started their chant? How much has the market increased since then? How much would the market now need to lose to validate your position on the property market had you decided not to buy when you started your chant? It is possible.... maybe even likely that your call for a crash may be right this time... but what have you lost out on in the past when you made similar calls but were wrong?



yes a lot of people as yourself have done well from the price rises ..but at some point the ability to service a large mortgage ,the casualization of the work force , interest rate rises ,falling disposable incomes the ability to pay rent etc will impact on property prices ,the actual rental return % is low, how many 1st home buyers are out there now ..? not many I hazard to guess its only overseas buyers and speculators that are propping up the market...


The overseas buyers and speculators are propping up the market. Most locals are in Vosadrian's position, bought years and years ago, and aren't phased by a drop in prices.

Little Australians from little Australia don't or can't comprehend the size of the rest of the world. There are fifty Chinese for every Australian, and they aren't getting poorer.

Australia:
IIIIIIIIIIIIIIIIIIIIIIIIII

China: IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII

Now, granted they aren't all millionaires looking to invest overseas, but the proportion of millionaires is also fifty times higher.

Can you imagine 50 Sydneys up and down the NSW coast? 50 Melbournes crammed into Victoria?That's the scale of investment we are experiencing.

And with the government basically falling over backwards to sell it to them, both sides I'll add, there will be no end to this any time soon. Hell, there is a visa for Chinese parents to buy property near schools; that's its specific purpose (thanks Malcolm).

Why has Perth or Darwin seen a decline in prices? Or Brisbane not see an increase? Nobody has heard of these cities, and/or they were too dependant on tulips/mining. That's why.

evlPanda
NSW, 8034 posts
Thursday , 14 Sep 2017 8:51AM
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AUS1111 said..


evlPanda said..

Interest rates will not go up unless there is an economic upturn, in which case people can afford the higher interest rates.




This is a dangerous attitude to take. Interest rates will rise in line with inflation expectations, and this can happen in the absence of an economic upturn. Inflation is the issue, not economic growth.

If many people are complacent based on the misguided belief that interest rates won't rise then we have a all the makings of a bubble. Whenever price rises are based on collective psychological factors rather than economic fundamentals, that screams danger, as sentiment can and does change very quickly.

I live in a city where property prices have been falling (in real terms) for ten years. The bubble never burst - it has just slowly deflated over ten years, which may be hard to comprehend for a Sydneysider. Ten years of slow declines.

Perth is a nice place to live - is it underpriced?



That's an interesting point. I will have to reevaluate.

Perth, let's face it, for good or bad, is at the end of the Earth, is unknown, and doesn't have as much going for it the way Sydney or Melbourne does. Yes, it sure is a nice place to live for some people. Hell I'd quite prefer it if I could find any work there. I know of one person that does what I do in Perth, and they work from home, in Sydney.

There is little to no overseas investment in Perth. That could be a good thing.

vosadrian
NSW, 160 posts
Thursday , 14 Sep 2017 9:36AM
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I just want to clarify my position:

* I don't care if my residence goes up or down. I plan to live there for a long time so I don't care what it is worth while living there. Of course when I sell I want it to be worth as much as possible compared to what I am buying.... so that could be completely devalued as long as what I replace it with is in the same position.
* I want my investment property to go up... it is an investment... of course I want it to be worth as much as possible.
* I think Sydney house prices are over the top. I don't know how my kids are going to live anywhere near me. But we like living in Sydney and have managed to get into the property market in an area I like to live. Not much I can do to change things. I would like to see prices become more affordable, but I think Sydney has to change for that to happen. Too many people want to live within easy commute to city, and not enough housing to support that. I think some decentralisation is required to make Sydney more affordable... but that would likely still mean affordable housing is a fair way from City but you can work closer to home.
* I realise I have some conflicting goals above. I want housing to be more affordable so my kids and others can afford a place, but I want to maximise return on my investment property. I am playing the investment properties like a slow moving share market. I sold one earlier this year as I thought that was the likely peak. I held on to the other in case I was wrong. If house prices stabilise I will sell the other and move investment to other areas. I would be happy for this to happen. So even thought I think Sydney prices are over the top.... If the rules are setup to make it that way, I am going to play by those rules and benefit from them. 10 years of negative geared investment in SYdney property has been profitable.

Adriano
6048 posts
Thursday , 14 Sep 2017 9:12AM
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If we all just went back to living in our houses and contributing to community instead of treating residential property as a business or retirement investment the problem wouldn't exist.

This is what our parents and grandparents did.

That's why they could afford a house on a modest income.

AUS1111
WA, 2646 posts
Thursday , 14 Sep 2017 9:17AM
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Adriano said..
If we all just went back to living in our houses and contributing to community instead of treating residential property as a business or retirement investment the problem wouldn't exist.


That's ridiculous on so many fronts.

vosadrian
NSW, 160 posts
Thursday , 14 Sep 2017 11:21AM
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Adriano said..
If we all just went back to living in our houses and contributing to community instead of treating residential property as a business or retirement investment the problem wouldn't exist.


So how do you propose that this happens?

If people did not invest in property and rent it out, there would be a significant portion of people who prefer to rent who have not got somewhere to live. Not everyone wants to buy a house. So who provides these rental properties? The government out of taxes? or investors who will only invest in this area if it is attractive as an investment?

There are many reasons to not buy a house. Some people want flexibility to move around. Some want to spend their money in other areas and not be tied to a financial commitment. Some do not want responsibility for the upkeep of a house. Rental property has to exist for people like this.



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