40 Years in RE. Is this the most confusing market ever?

Discussion in 'Property Market Economics' started by Car tart, 18th Oct, 2019.

Join Australia's most dynamic and respected property investment community
  1. Triton

    Triton Well-Known Member

    Joined:
    8th Sep, 2017
    Posts:
    476
    Location:
    Vic
    Or you could you know... Look at auction prices and compare to historical prices on similar properties or even attend auctions to gauge the market sentiment. The suburbs I look at closely with a median around 1.2 mill around the peak are selling at peak 2017 prices, I don't need corelogics or REAs outdated data to tell me that.
    Having a median around 1.2 is not exactly high end in Melbourne. I don't understand why people get hung up on these corelogic numbers especially when they lag the market by few months
     
    Last edited: 20th Oct, 2019
    Kapot and Brickbybrick like this.
  2. JohnPropChat

    JohnPropChat Well-Known Member

    Joined:
    10th Sep, 2015
    Posts:
    2,293
    Location:
    Middle Earth
    I still feel we have to wait till early 2020 to get a better idea. A 20% growth spurt isn't worth the risk of high transaction costs. With rental vacancies being lackluster and poor yields (yes interest rates have come down but the fixed costs are now a huge part of the total expenses) means it is easy to get burned.

    The key thing missing is a period of stability/stagnation which hasn't happened this cycle.
     
  3. Rugz06

    Rugz06 Well-Known Member

    Joined:
    21st Jul, 2019
    Posts:
    70
    Location:
    Sydney
    The numbers don't help, I've seen 10-30% rises across all the properties I've followed in the last 6 months. I go to inspections, auctions and speak to REA. Its the only true way to gauge the local market where you want to buy
     
  4. spoon

    spoon Well-Known Member

    Joined:
    17th Nov, 2016
    Posts:
    1,762
    Location:
    Time-dependent
    And one will only know in hindsight
     
  5. standtall

    standtall Well-Known Member

    Joined:
    19th Oct, 2015
    Posts:
    2,701
    Location:
    Sydney, NSW
    You aren’t alone. I know many cashed up investors who aren’t investing despite market turn around. A lot of people are still processing the market volatility from last 12 months.

    Two key takeaways from recent market events: 1) regulators have no foresight, every action has been in hindsight and it still made things worse 2) cost of their incompetence is immense to a typical investor/household.

    conclusion: tread carefully for now!
     
    Lizzie and JohnPropChat like this.
  6. kierank

    kierank Well-Known Member

    Joined:
    20th Jan, 2016
    Posts:
    8,414
    Location:
    Gold Coast
    One doesn’t need much hindsight to not buy in mining towns, to not buy in Sydney/Melbourne in 2017, to now be buying in Brisbane, to not buy in regionals, ...
     
  7. standtall

    standtall Well-Known Member

    Joined:
    19th Oct, 2015
    Posts:
    2,701
    Location:
    Sydney, NSW
    Lots of false information in your post.. what’s a flat recovery anyways? If prices are flat as you say then why call it a recovery.

    High rise apartments and fringe new development estates are the only places in Sydney that haven’t significantly grown since election.

    Don’t base your market intelligence on news articles, call a few agents in Sydney and you will get a good idea.
     
  8. ashish1137

    ashish1137 Well-Known Member

    Joined:
    12th Sep, 2015
    Posts:
    931
    Location:
    Sydney
    Hi @standtall

    Not sure what outskirts you consider.
    I keep a track of north west, west and south west.

    North west and west habe grown. Land is becoming smaller and pricing up. Whats cheap is cheap for a reason, smaller frontages, smaller blocks, irregular blocks or way farthwr to station and other amenities.

    Anything not following above is selling quickly and at a premium. Prices anywhere in these areas has gone up by 8% to 10% at a minimum.

    Regards
     
  9. standtall

    standtall Well-Known Member

    Joined:
    19th Oct, 2015
    Posts:
    2,701
    Location:
    Sydney, NSW
    Agree though it’s not like a 2015 frenzy in outer suburbs but get a bit closer to city and boom is a lot more significant.
     
    ashish1137 likes this.
  10. ashish1137

    ashish1137 Well-Known Member

    Joined:
    12th Sep, 2015
    Posts:
    931
    Location:
    Sydney
    Maybe you are right.
    I was pretty new to country in 2015 and tracking vic more closely than NSW. :D

    However, now is buying again mainly due to FOMO. A lot of people i talk to (and i do talk to a lot of people) simply want to grab something. Houses going over 60k mark thsn reserved pricing. Might be due to spring.

    In the areas that i track in VIC, i have been enjoying bargains 40k to 80k lower than market pricing at a 450k to 480k price point in outskirts. But in past few days, all bargains have dried.

    Maybe December might bring more stock and less buying activity.

    Good to see that people since 40 years in the game are as confused. :D

    Regards
     
  11. Peter2013

    Peter2013 Well-Known Member

    Joined:
    24th Aug, 2019
    Posts:
    230
    Location:
    NSW
    'About as bad as it can get': REA boss grapples with 'worst market' for property in decades

    REA Group chief executive Owen Wilson has blamed the banking regulator and state governments for intervening in the property boom and causing the most difficult market for real estate sales in decades.

    "It’s about as bad as it can get ... It’s the worst market we’ve ever seen," Mr Wilson said.

    National listings fell 15 per cent over the three months to September 30, with a 22 per cent drop in Sydney and a 21 per cent decline in Melbourne.


    "That quarter, the fact the residential and development and mortgages [declined], to have that kind of a perfect storm ... we haven’t seen that within 30 years," he said.

    By the sounds of it, REA group is not experiencing Corelogic's property boom.

    Wonder why that is?


     
  12. Triton

    Triton Well-Known Member

    Joined:
    8th Sep, 2017
    Posts:
    476
    Location:
    Vic
    You are confusing number of transactions/listings with House price movements. Both don't always correlate
     
  13. Peter2013

    Peter2013 Well-Known Member

    Joined:
    24th Aug, 2019
    Posts:
    230
    Location:
    NSW
    o.k. So the Corelogic Property boom is a hollow one which could crash as soon as more property hits the market.
     
  14. hammer

    hammer Well-Known Member

    Joined:
    28th Aug, 2015
    Posts:
    2,854
    Location:
    Darwin
    Or...money is easy to get once again so people are able to buy.....
     
  15. marmot

    marmot Well-Known Member

    Joined:
    23rd Jan, 2018
    Posts:
    1,215
    Location:
    N.S.W , W.A
    The problem is it took us about 5 years to work out that wage growth is almost non-existent, and is not likely to rise in the foreseeable future.
    Banks can no longer assume that wages are going to really outstrip inflation when writing out mortgages.
    For the real estate industry it means a lot less people that can upgrade or even purchase their first home, everything slows right down
    For example someone on 80k a year and missing out on 1% of wage growth would be missing out on $6000 alone this year , all added up it would be well over 20k, if wage growth stopped in 2012.
    In the previous 10-15 years wage growth was almost double that.
    Banks giving out easy money works okay as long as their is good growth in wages.
     
    Lizzie likes this.
  16. Fargo

    Fargo Well-Known Member

    Joined:
    23rd Jun, 2015
    Posts:
    1,304
    Location:
    Vic
    Have a little think about it. REA is a different business, it gets its revenue from listings, reduced supply and disposals means less listings which = lower profits.. CoreLogic supplies Data more interest in acquisition means more customers for CoreLogic.
     
    ndpjai likes this.

Build Passive Income WITHOUT Dropping $15K On Buyers Agents Each Time! Helping People Achieve PASSIVE INCOME Using Our Unique Data-Driven System, So You Can Confidently Buy Top 5% Growth & Cashflow Property, Anywhere In Australia