NT Darwin Crash - Why are the asking prices still High?

Was hoping to start a thread to pool info as it appears there is a slowdown happening at the moment.

I'm starting to hear a few horror stories from investors here, rents are dropping quickly and listings are up 20-30 percent (depending on which stats you read).

I noticed today that the "exciting next stage development of Solonika st" signs have now been taken down. (The Avenue - Parap). I see developers slashing the prices of units by 15% or throwing in free cars etc...

Real estate agents are telling me that prices are down 20%....

But when I look at the real estate listings the majority of the prices are still stupid. The number of sales per month is down 60% from the average...so obviously people are asking too much. How long does it normally take for the downturn to start and the prices to reflect the downturn?

I'm a novice here...genuinely asking some advice. Need to buy a PPOR within the next year.

Thanks!

 

Can take 2-3 years before sellers start accepting significantly lower prices during a property crash. Until then there are just hardly any sales. This is what happened in Spain anyway.

 

Vendors will still have unrealistic expectations. They will list for with an agent for 90 days. The agent will be unable to sell at the price the vendor wants. The vendor will list with another agent. It may take another 90 days for the vendor to realise the market has dropped and it is not just the "hopeless" agent's fault he first listed with that is the problem. The vendor may withdraw from sale and relist when he thinks the timing is better. If he sells it will be another 40 days before the sale goes through and another 4-6 weeks before the sale is reported by the Land Titles Dept.

So the lag is probably 8-9 months minimum before you see documented lower sales prices or longer.

 

Hi,
When any one has a bad investment and its time to part ways it hard for any one to accept.
When a market is sinking the ones who bear the least loss are the ones who sell at a realistic price!!

 

I'm in regional QLD. Started watching market in my area about six months before moving here. Up to 18 months of watching and I'm still seeing stubbornly high prices on properties 1+ year on the market.

It is very much as though a group of sellers have decided what they believe their house is worth and won't budge no matter what.

Clearly they're not in a rush in any sense.

The ones going cheap are investor properties and deceased estates. In many ways this is the actual market and it's dropping 5-8% since last year. The rest are... I'm not sure. Waiting for some dumb cashed-up Victorian who thinks it's cheap comparatively?

 

Where are you MGF? Rocky?

 

Eventually a seller cracks, which sets a new much lower benchmark and the others follow.

In the Spanish development I bought into a group of sellers initially was asking around 475K (Euro), the prices close to the peak (a similar property went for 580K at the peak). Slowly their asking prices came down, but there were no buyers for years. Finally this year we have some sales around the 240-250 mark. I jumped the gun a bit early and paid 320 but have one of the best properties, maybe it is worth 275 now. Prices are back to 2002. You have to be patient, it takes years for sellers to accept the new reality.

 

It's only been 5 years, I'm sure someone will buy it at that price!

 

Keep vague for privacy but yes, north of Brisbane, Coastal.

 

Lol, crazy. Gonna sell any day now.

Btw - where is that report from?

 

We're not in a big rush (apart from the renting sucks angle) and currently the price drops in our area are large enough that the resulting drop in lifetime mortgage cost is higher than our yearly rent.

I do wonder how some of these sellers hold on for so long. Some places have been vacant 1.5 years at least.

We get a few greedy kid sales in our area (deceased estates, children just want it gone) that distort the market a bit.

 

Woah! West street is truly a work of art! Ha! Maybe one day it will sell....

We've got a few of those up here as well, but it's also the smaller places here that defy logic.

Take this one for an example...
http://www.realestate.com.au/property-house-nt-durack-120601513

On first glance seems reasonable... $475k in a reasonable spot, reasonable house and cheaper than most of the other houses on the market.

But it's been on the market for over a year because for $470k you can buy a better property on the same amount of land, brand new around the corner.....(FYI FHOG here is 26k and cause it's new you only pay stamp duty on the land, not the house - so all up a 35k discount).

They're onto their 2nd or 3rd agent now. You would think someone would tell them?

 

When the market slows down and goes from boom to bust you will get more supply (houses) on the market, therefore more sellers than buyers, this will continually drive prices down in the early stages, how low, who knows ??its dependent on many factors, economy will be one factor to consider. When did the boom cycle start and finish?? I have not been playing in this market. Some bust cycles will go on for 7-10 years, just look at other markets in Australia to compare, boom cycles are much shorter, damn it.

For example Perth is currently in a downturn, we were booming/rising from 2012-14, now house prices generally have dropped 10%, and I believe still falling, stock is increasing, therefore buyers have choices and if people are desperate and need to sell they continue to drop the price which effects the market.

In your scenario you should not be in a rush if prices are still falling, I would be sitting and watching very closely, you are in a key position to buy well.

Our economy is going pear shaped at the moment, Au$ falling, APRA, sharemaket on a roller coaster ride, Chinese market slowing down


MTR

 

Here's another one....
Went to an auction on the weekend. Not a single bidder. The silence was deafening. So what does the agent do the next day?

Put it on the market for 50K higher than the Auction starting price....

Why would you do that? Surely if there is zero interest in an Auction at a certain price...that would be an indicator that the price is too high?

I must be missing something? Any clues?

 

Agents and vendors haven't adjusted to the new reality it seems, give it time.

 

Like a boss! Take it or leave it mofos!

 

The stats are finally starting to show the reality up here...

Darwin rents down 21.3 Percent....

http://us5.campaign-archive2.com/?u=9badbd870addb4af72206c2eb&id=e90eef1b53&e=83af5456ec

 

I've been trying to let a house in Gunn. Was let for $550/week last year. Has been vacant for 2 periods this year...2 months.. now 3 months and continuing.

Rent reduced from $550/week to $440/week. House repainted.

In the last few days the number cheaper rental properties has reduced which is the first good sign for a while.

Seems to very much be a boom/bust cycle in Darwin.

 

Hey Ajax,
Unlike most of the stuff in town, your place seems to be priced fairly....
Have you tried the Darwin rentals facebook page? Good luck!

https://www.facebook.com/DARWINHOMES

 

Park Trent are selling OTP in Darwin - I got an email from them today. Apparently lots of people in Darwin crave a 'rural lifestyle' so these flats are 29klm down the highway. Isn't that the desert? One bedders start from $390K.
What could possibly go wrong?