A snap shot of what is happening on the ground in Melbourne

Melton is now 10% down and nothing is selling... a lot of houses coming on sub 400k and stock rising. No one buying in the last 2 months

 

loads of busy acuction weekends coming up I’m the next month. I’m very glad I’m not trying to sell my home right now.

 

Yes, there seems to be a lot of backward/upside down thinking here.

UK 1989/90 property crashed around 45% in the South east, London etc.

Caused by a change in credit laws (miras tax relief) resulting in the evaporation of notional wealth magicked out of nothing (A sells a house to B, sells on to C, sells back to A always increasing price, money from no real created wealth).

The loss of notional wealth resulted in no spending, resulted in less earning, a vicious circle down, recession, unemployment. Once started it was impossible to stop. Buyers took a big step back, every week waited saw thousands saved, why would anyone buy? Sellers were offering the Porsche in the garage as an added incentive, but by then it made no difference.

But of course it is different here! Aussies have not seen this for so long, they have no reference.

 

So true. Many Aussies are massively exposed to a downturn and don’t even realise it. The chances of a home-grown credit bust and resultant recession in Australia are rising quite rapidly.

 

The sub 4s rare particularly near the station at Melton South. Wth the investment and upgrade of the train line....this is unlikely to go down significantly as there are not that many quality properties for sales. These are still moving albeit it is down a bit.

The new estates in Melton South are having a harder time to move particularly where house and land packages are over 500k.

 

A lot of the stale stock is now priced 380 - 410 i saw at least 10 when i looked this morning. The same for melton west and kurunjsng. Talking to agents the repricing has only come about in the last few weeks as investors are starting to panic. The buyers literally vanished over night after 60 minutes . I agree though...too many drivers to not to.continue to.do well...cheapest place in melbourne so fhb will come back once the sentiment wears off....not a good time to sell

 

In a downturn, due to FONGO and consequent trickle down effect, costly becomes cheaper and cheaper becomes even more cheaper.

 

Melton only got dragged up because new urban fringe land lots blew out to $300k, in a specufest from those of the southern continent. They're headed back down... to $200k with a lagging delay.

 

Hardly any new stock listed in suburbs that I'm looking at this week. Looks like sellers/oldies/downsizes have shut up shop.
What normally happens when new listing numbers go down? Demand builds up?

 

In Melbourne less ppl are listing than same time last year but there are more properties on the market anyway because not much is selling.

Sellers are still thinking peak prices. Buyers not.

 

They have to adjust prices or suffer the consequences

No market is immuned regardless of price point, credit squeeze will effect all markets

Seems many investors dont get this

 

Question is. How long will people hold off selling! Or do we get a rush for the exit?

 

Listing levels in Sydney and Melbourne have jumped over 18% from a year earlier.

 

Not everyone can even if they want too,
Smart money amongst them ,anticipated this and have already left,
rest are wishing and hoping.

 

Dont believe everything you read, now is not the time to buy.... easiest way to lose money

 

Depends. There is people now committed elsewhere. House for sale at 1m. Little interest. If you can pick those up in the 8’s - worth considering. You might do better later on, but a bird in the hand is worth two in the bush.

 

Or.. with credit having tightened and ability to.borrow severely constrained demand for cheaper areas increases when compared to those surrounding it ...time will tell

Not if you end up with half a bird later on☺

 

Recent months it's decreased

 

Interestingly enough, I have been one of the biggest property market bears over the last 12-18 months, advocating staying out. Now its turned and I am watching closely to see when to get in - people seem to think I am mad. So basically I am mad both ways.

 

There are always opportunities to add value and its a numbers game.

I am of the opinion holding property in a flat/falling market with low yields, in an environment where interest rates are rising is not going to be a good idea and higher risk, especially if investors are struggling to service debt.

One strategy that has worked well for me is being patient and waiting, time is currently on our side, no need to rush in. Bust cycles last much longer than boom cycles. In saying this I still believe Melb is the best market is Oz, but its still about timing the market.
Wait and Look for markets/suburbs where stock is reducing, not increasing, otherwise you will lose money. Just my humble opinion