Another Interest Rate Drop?? What will happen

Sydney is special because of land constraints. And people still want to move here, there are jobs.
Land constraints = higher prices. Think Hong Kong. Anybody who owns land there is mega rich.
That's why we have $1 million home medians. It may go up or down, but the underlying demand means it will always command a premium. At the moment prices are still heading north because of low interest rates and jobs. I don't see interest rates increasing anytime soon. People are still moving here for jobs as the market is still so robust.

Plus it's just a beautiful city. The weather's great 9-10 months of the year. Sometimes there are weird weather events but we don't tend to have 4 seasons in a day and we didn't have the 2011 floods....

 

True. As long as jobs leads the nation and rates are low, Sydney will be ok. The main detractor is that salary growth in Sydney is almost non existent( pretty much a national thing) and house price growth has and continues to outpace salary growth leading to unaffordability.
Lots of smaller factors such as questionably sourced money from Asia fuelling Sydney etc also contribute but these are secondary.
If Sydney loses the jobs advantage or if other cities make headway in this regard, the money may well flow into thosr areas rather than Sydney. Jobs is going to be the key. Interest rates apply equally to all markets so that's a non differentiator.. As you rightly mentioned geographic constraints limits supply in Sydney as well and is a differentiator...the combo of geographic supply constraints and jobs on the demand side is what is keeping Sydney strong.

 

I suppose if you can't afford a full blown house and Blacktown/Mt Druitt/Penrith/Liverpool/Campbelltown/Illawarra/Central Coast don't appeal, then it's either a townhouse or unit. Sydney has scope to add units. Once those owners get a bit more money/equity/owe less and grow a family then they might be able buy a reasonably well located house...
Of course if you already have the family then it's a harder decision. Commute or squeeze (or migrate elsewhere?)

 

8 Reasons why property markets crash by M Yardney, some may be interested in this

8 reasons our property markets could crash - Property Update

 

Sydney never slows down... ever!
Keep an eye on the state deficit, things will get interesting.

 

Rings true I think. Fairly sound reasons.

 

Both eyes are committed elsewhere at the moment but I will put a camera to it to go through later on

 

I like your new avatar @MTR ...who cares what happens to the sydney market when we keep getting such avatars

 

Good, stay focused

 

It's a bit blurry. I still prefer witchy poo in lingerie. If interest rates drop we can definitely expect @MTR to change her avatar. Actually, we can safely expect her to change her avatar even if interest rates don't drop any further.

 

is that the new Moaning Lisa? lol...

 

No moaning today, very serious work today.....

 

People are generally too scared to sell their house and upgrade in Sydney. They sell their place and then by the following week property prices in their desired suburb run away from their affordability.
There is simply low housing stock in Sydney at a time when the Goverment is developing education as an income stream. Chinese people want to live in Chinese suburbs and send their kids to good school. Enclaves form. It's great, a Chinatown is exotic.

Chinese people are pulling massive amounts of money from China into other countries. It's crazy but China is nearly more expensive than most countries now, so we should expect manufacturing to return eventually.

 

Not gonna happen, in asia the new factories are moving to places like Vietnam and Thailand. Toyotas are coming from Thailand now for example...

Cheap credit back home is what's providing them the capital to buy up assets overseas. Once that stops it's game over.

 

Cheap credit won't stop for years, it can't stop. Raise rates and the rest of the world including us will be in recession. Asset bubbling will not stop until something collapses. For now, if rates continue to drop, houses will continue to rise in Australia.

 

Sounds like a boom... they could always buy first and then sell.
Markets do cool down they dont keep growing indefinitely. Sydney growth has been spectacular, whats the median now??