NSW Calling a Sydney Peak - Great run while it lasted

I am calling Sydney already past its peak based on following:

1. Constant drop on daily indices (longest consecutive days since available data)
2. $6b levy on banks will put further cost pressure on investors
3. New APRA regime
4. Overall inflationary and interest rate pressures
5. $300k super transfer for empty nesters will increase supply

What does it mean for prices in Sydney:

- unit prices will take a hammering, no doubt
- 1.5 to 3 million house market will get affected depending on how much interest rates go up
- prices in older suburbs (long held properties) will get affected most due to supply coming in market from empty nesters


What's next:

- Hold Sydney if you can (the more keep holding, less the decline)
- Brisbane house market has the best prospects now followed by Perth (3 years time frame)


Thoughts?

 

Is it too late to access equity from Syd investments if you can?

 

Perth bargains however yields have been hammered and we are a long way off recovery

Brissy fragmented market buy well

 

Now probably is a bit late but banks will assess people on their individual balance sheets. It's probably not going to be as easy/generous as it was 4-5 months ago.

Personally, I took all the equity in Sydney out in January and part of it has been invested in Brisbane and other part waiting for a PPOR upgrade in Sydney when bargains start coming out.

Agreed - I have started watching it this year. It's a critical market for Australia's long term and shouldn't be written off.

100% agree - going with inner city blue chip properties with good yields. They are getting increasingly hard to find though.

 

Not sure Id call the top has passed in Sydney just yet.. You maybe right though..and I think thebudget yesterday might slightly help with Sydney slowdown.
As long as there is no crash in Sydney, watch for other markets to get some more (prior Sydney) interest.

 

Let’s see what happens when spring comes. I hope this is the top, we all need a breather.

 

I think there's still some steam left in the Sydney market. Properties are still selling for way over reserve price and auctions are well attended.

A slowdown is definitely on the cards but I just don't think we're there yet.

 

Even if the market starts tanking it happens over time like catching a falling knife, no rush, patience is required

 

I reckon a bit premature as well. Obviously markets in the west and south west have been flat for some time but April results in for some of the northern beaches are still strong. Beacon hill has increased 4.73% over the last quarter. Cromer and narraweena up also. Better picture in a few months around Spring I reckon.

 

Perth is frustrating me at the moment. Not a hot market by any stretch but it's def not dead.

 

Its a great time to upgrade primary residence as long as you have a job

Price sensitive

I am in no rush to buy in Perth, I would prefer to chase markets where the economy in better shape, my strategy

 

Its the attack on Investors that has me concerned, seems there is a target on our backs, do I speak for a few here?
What on earth have we done to deserve this targeting?
All above moreso in relation to APRA.

 

Errr... investors made it so expensive in Sydney that FHB only make up something like 7% of the market, but investors made up over 50% of the market. Says it all really.

 

Adelaide m8. Many businesses relocating there. Undervalued $$$$

 

Says what all really, ???

So the idea is to punish existing investors right around the whole country at the hands of FHB's in Syd only? Really?

Says to me that there was demand for rentals and that demand may now have been satisfied. No?
Has the Govt decided to "invest" in housing? Or are they slowly but surely divesting their interests in housing?

If not, then please explain, Im all ears (well eyes reading).

 

Politicians are one of us. My federal member owns 8 properties in Sydney. Keep faith in them

 

Too right, but APRA are not "politicians".

 

You are right to a point but you really can't blame investors when the government (RBA and APRA too) opened the doors for them wide open to invest. They kept to the supply not keeping up with demand rhyme and we need to build more while not addressing reform or the demand side so investors jumped in as expected.
And now as per Phar Lap, the blame is shifting towards investors but really, the only ones to blame here are the RBA for lowest interest rates in history, APRA for waving a lettuce leaf at the banks and not acting earlier and the government for not tackling reform.

As for Sydney's peak,we're getting there but not sure if the budget matters targeting downsizers might have a positive or negative impact on the market.

 

Yeah... perhaps investor interest rates should be much higher (like 2% more) than for OO's, give the OO's a chance. I mean, investors get negative gearing, depreciation, rental income to help service the loans whereas the poor OO only has income to include, there's no rent to help with the serviceability. That's why there are so many young rentvestors.
But then again, large differentials in interest rates would add quite a bit to bank profits.... and the government wouldn't like that. The government will do anything to deflect critics away from them.... and it's a politically safe move to bash the banks... However... everybody with super is likely to be an existing bank owner. Banks will pass on extra costs...

 

thanks Sydney, just cashed in on my NSW (Sydney piggybacked) property with about 60% profit over 5+ years. Time to move on as it has peaked, perfect timing but I would say it will spring back again not too far away. Good luck! I need to start a doom & gloom thread too