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

If investors are purchasing deve sites today to hold in Melb tells they are purchasing at peak... ouch and no idea on numbers. Makes little sense

 

This flies in the face of all the big banks and economic bodies in Australia forecasting Melbourne and Sydney to keep declining until 2020.

 

Agree with your position Patrick.

But you are both right.

However Lisa is referring to 2 of the 4 majors loosening rates this month - personally....I think its a head fake and they are catching the last of the mortgage swappers on variable or short term fixed before rates jack up and we see tightening of mortgages in 2019-2020.

Show me lower 5 year fixed loans....and im interested.

Im comfortable and don't intend on selling for at least 20+ years....but I've also paid down a truck load of debt in anticipation etc.

 

Hi Dean, good feedback. Rates are one thing however it’s no good having low rates if you don’t qualify to borrow or can borrow much less than you wanted to . I was referring to tightening of credit policies not in rates .

 

@MTR you were quite bullish on Melbourne a couple of years ago. It seems to have dropped further than Sydney. You initially thought it would run longer than Sydney. What do you think changed?

 

I was buying when the market was rising. Sold up on two projects, perhaps too early, but a profit is a profit, I just move it into other markets.

Developing property when markets are softening is the easiest way to lose money because you have no idea whether the end values will drop. The only option may be to hold and service debt.

Not saying my strategy is perfect.... far from, but its one way of mitigating risk. I have seen first hand developers getting burnt.

MTR

.

 

Good on you. What I was asking is what do you think is making Melbourne drop more than Sydney now? I remember you also consistently saying that Melbourne had much more upside than Brisbane (when Brisbane was the real flavour of the month on here and everyone was buying IPs in Brisbane). What do you think changed about the market?

 

the upper end in melbourne has flatten - talking 1.4 - 2 mil. Nothing has changed tbh - half the ppl here comment without real knowledge of on the ground in melbourne. it is like myself although i own properties in europe - i don't profess to the know the market inside out unlike some ppl who may have just done a dev or 2.

Deals such the one recently seen - buy 1 mil, build 1.45mil for 6 townhouses, say you add 200K etc for rest of legals, gst etc that is 2.65m. townhouses all sold for 600K which is 3.6 mil whatever rough figures etc. "Basic year 10 maths " will tell you is bigger margin that some have done here.

each one has their own strategy

i do not think markets like pt cook has tanked at all. in fact it has moved than when i last sold.

you take a train ride which i did today from the mentone station - frankston line, and it is jam packed with ppl - like in can of sardines in the morning. go figure. frankston is not that many stations from mentone.

 

Sure I am just commenting on the aggregated fall for Melbourne (in comparison to the aggregated fall/rise for other capitals). Of course there are great opportunities in every market. Just interested in what is happening generally that is making Melbourne drop more than Sydney, particularly seeing as I was quite convinced previously by @MTR arguments for Melbourne vs Brisbane. Also because historically Melbourne has come AFTER Sydney in the cycle.

 

I was recommending Melb at around 2013+, purely because it was rising market and there was money to made, you could throw a dart.

I also said booms don't last forever, and they don't, proof in the pudding, what we are seeing today.

I also started a thread on "what will stop Melb and Syd booming"...… APRA worked.

At this time I purchased in Melb and Syd over Brissy, because it was rising market, and the fundamentals driving these booms were solid, ie immigration, jobs,

I also started a thread

Why Did Brissy not boom

I will try to attach links shortly

Hope this explains why I was buying in Melb and Syd.
I expect investors who purchased in Syd and Melb between 2013-2017 made a killing, easiest way to make money is buy in rising markets.

Would you believe you don't need to be a genius

Here are the links

What will stop the BOOM in Sydney and Melbourne

QLD - Why Hasn't Brisbane BOOMED

MTR

 

Credit squeeze.
Investors in the main are out of these markets. Will FHB soak up the supply.... me thinks not.

The question is will this impact on all markets??? I think so, time will tell.

I am not buying in Australia at the moment, I am waiting and watching.

Brissy was never on my list, only because there were better markets to make easy money in short time frame.

Many saying Brissy is starting to rise, but I have been hearing this one for years. I hope it does boom, but the next question is why will it boom? what are the drivers?

 

Agree with your strategy about buying in rising markets. But not sure how buying in 2017 in Sydney and Melbourne would have been helpful?

 

Statistics if something that is interpreted as opposed to generalised in every decision making
take for example




if you see this sample figure - if you were in the top 2 suburbs - you would be worried but if you were in the others - not. because the top suburbs have grown so much some from 1 mil to 2 mil - a fall of 20-30% is not uncommon that can skew it in a negative way.

i think the high end in melbourne will be affected - the lower end is not. there is no shortage of buyers if you are in price bracket . Credit squeeze or not for these demographics - not as investors but for ppl looking for their first home and looking to buy. melbourne will still outshine. i have been to 100s of auctions week in week out - there are ppl still buying. yeah of course i would like to buy as well in Brighton for 3-4 mil but yeah not many ppl have that much of dough.

 

because there are properties that say for e.g. in 2017 which was 800 is now 1 mil

 

In my opinion it will need strong mining to really grow. The impending and commenced big infrastructure will help but need a strong mining economy. Things are looking positive for mining - slowly but surely. I think the upside is good for Brisbane.

 

sorry should have said 2016, probably be out of the market, or alternatively access equity??

 

That's good.

 

problem is you wont know?? if its good or bad decision today??

Why because as markets are softening means we are at peak. I understand there are markets within markets, but they are not immune to the overall market sentiment when it changes. Blue chip also fits in this category.

Time will tell

 

Yep. I suspect grow market share, then increase rates.

 

Yes Early 2016. I feel things are going to pull back a bit and then be flat for a while My gut feeling from everything I'm reading and from looking at long run relative price of capitals.