Falling prices in Sydney.. Really??

Discussion in 'Property Market Economics' started by Kis Kis, 19th Jan, 2019.

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  1. Lacrim

    Lacrim Well-Known Member

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    Side, unrelated issue to this thread but I think the transport enhancements in Sydney are a missed opportunity. We should have stuck everything underground and upgraded the entire network to accommodate fast(er) trains like you find in Singapore, HK, Tokyo etc.
     
    Last edited: 21st Jan, 2019
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  2. berten

    berten Well-Known Member

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    @Redom

    I appreciate the well written response, no doubt you know your stuff and I agree if you are swinging with big sums and can afford lose, land banking can be crazy lucrative. But 100% in 4 months is an outlier. I

    But my bs detector goes off when people talk about investment in terms of courage/bravery or easily doubling your money because in my experience, they're selling something.
     
    Last edited: 21st Jan, 2019
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  3. dabbler

    dabbler Well-Known Member

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    No offense, and I do not know, but ....

    No 1 You believe what a local rag puts out ?

    Also, I doubt it, and what are they talking about, the council land value they assess rates on, that, yes, would be right, as would much of Syd, but that does not mean anything when it comes to actual sales and the actual market, this has to do with rates and land tax, i.e, extra costs not more equity.
     
  4. TheSackedWiggle

    TheSackedWiggle Well-Known Member

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    There are always against the tide opportunities in any given market, but its few, selective, speculative and is generally a play-area of very savvy investors.

    Indeed there is a massive infra boom currently going on in Sydney which has led to massive job opportunities,

    yet the rents have started to fall? and wages are not rising in a hurry.
    Non-infra construction jobs are already under pressure given new development slowing fast, makes you wonder what happens when many of these project build phase comes to an end, is it by late 2021?


    No matter how one slice or dice it, no matter what the spin, we are in an uncharted territory with multiple headwinds acting in parallel like never before
    • Headwinds currently playing out
      • current responsible lending fetish who knows till when
      • IO2PI rollover till 2021
      • Over supply building up
      • Rents starting to fall
      • Trickle down effect of falling valuations
      • OTC not able to settle will be big in 19/20
    • Headwinds yet to impact
      • FONGO
      • FOMissingOutGettingCheaper
      • NG reform
      • CGT discount reduction
      • Impact of ever increasing automation and increasing gig economy on average joes incomes, spending habit and living desirability.
      • Aeging demography
     
    Last edited: 21st Jan, 2019
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  5. dabbler

    dabbler Well-Known Member

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    This cold is spreading....and heading toward a flu and pneumonia possibly......

    You know when the bad news stories get slowly worse it is likely to get worse........

    Who is buying a buy and hold IP in Syd now ? hands up,,,, @sash you ready to pounce ?

    Property price falls could double: Morgan Stanley
     
  6. dabbler

    dabbler Well-Known Member

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    PS get in now before the big drops, I reckon it is going to get bad here, so jump in now so you know what financial pain is.

    I see piles of new apartments still going up or starting as I drive round West and inner West....gotta be some nervous developers now, and rattled valuers at least with units.
     
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  7. Redom

    Redom Mortgage Broker Business Plus Member

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    Good point, didn’t realise it read that way.

    Not selling anything related to this strategy, just general commentary as an investor about micro opportunities that an infrastructure boom presents vs general mass macro negativity. I’ve also noted that the general macro isn’t a very good play given risk reward now.

    It’s definitey an outlier of course. In general though, the infrastructure boom is leading to mass rezoning across the city creating opportunities for investors. If you’ve got a general no go zone to an entire city, then you close doors to an opportunity (albeit risk reward may not stack up).
     
  8. Redom

    Redom Mortgage Broker Business Plus Member

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    True, hence the macro not great. But micro plays are available for those with appropriate risk profiles.
     
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  9. berten

    berten Well-Known Member

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    For sure. To that end I know there are folks on here that have made it big buying reselling land based on rezoning, it's just IMO you need to know what you're doing or you will get burnt, it's not for greenhorns (like me). It would be too high risk for myself without a mentor with a track record, but i'm envious of anyone who can do it!

    Is a strategy based on anticipating rezoning getting harder these days? I remember Dick Smith saying he's embarrassed about making most of his money this way and not from his business :p
     
    Last edited: 21st Jan, 2019
  10. sash

    sash Well-Known Member

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    ....not yet.....
     
  11. Redom

    Redom Mortgage Broker Business Plus Member

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    I’m definitely no expert, but I think the massive public infrastructure boom is creating a lot of land dynamic changes in associated areas. Hence a lot of rezoning in a short period of time and in turn, opportunity. In general, not for the faint hearted. Probably not a bad time for this strategy, given the lack of buyers and -10% falls.
     
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  12. euro73

    euro73 Well-Known Member Business Member

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    That requires more money and takes more time than Australian politicians are willing to support. No votes in it. None of them are thinking 50 or 100 years ahead. They arent even thinking 50 months ahead, most the time.

    One only needs to look at our motorways . They should have been 4 lanes each way at a minimum. 6 would have been better though. The current rail links under construction should have been built 20-30 years ago. High speed rail should be built immediately but probably wont be.
     
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  13. wilso8948

    wilso8948 Well-Known Member

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    Most can’t even stay in the top job for 50 weeks!
     
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  14. berten

    berten Well-Known Member

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    Game of thrones.
     
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  15. wilso8948

    wilso8948 Well-Known Member

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    House of cards more like it..
     
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  16. euro73

    euro73 Well-Known Member Business Member

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    Seems that way... I think the upcoming federal election is going to used by most voters to send a very clear message to all pollies of all persuasions that they should quit the game of thrones shenanigans quick smart. I see a bit of an old school whooping coming for Scomo and co - singularly designed to make an example of them and send a very clear message to all parties - get on with it. no more factional BS or we will turf you out.
     
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  17. Kangabanga

    Kangabanga Well-Known Member

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    Well developers have to complete their projects quickly once they start building, as delays cost them a lot.

    Those new apartments going up have probably secured funding last year, so have to go ahead and complete and hopefully still breakeven, or maybe make a loss but at least a smaller loss than if they delayed starting.

    Do wonder what the crane counts like...
     
    Last edited: 22nd Jan, 2019
  18. BoatArrival

    BoatArrival Well-Known Member

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    Ever looked at Singapore ? They freaking build new rail line every few years as well as expand double airport capacity twice in the last decade (they build Terminal 3 which is bigger that old 1&2 combined and now they build Terminal 4, which bigger that 1,2 & 3 combined). And they are building NSC highway too, which btw first one to integrate dedicated lines for bicycles and is actually very future forward looking design. Now, that's what I call mass transformation. And it's not unique to Sydney at all. Los Angeles is having 4 lines under constructions at the moment with 5 more at the launch stage. And LAX as far as passenger traffic is already double of Sydney and they are expanding it ever more. As far as highway expansions goes that **** never stops in LA with all of its traffic. Don't tell me that LA or SG are lower tier cities than Sydney. If anything I'd consider LA a tier above Sydney.

    Sentences about uniqueness of Sydney on global scale tell me loud and clear that the people hasn't traveled much. As far as mass transit, highway and airport projects in Sydney they are nothing special. If anything I'd rank them at the bottom as far as planning & execution goes. Sydney urban planning in general leaves a lot, a lot of room for improvement.
     

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  19. Redom

    Redom Mortgage Broker Business Plus Member

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    In general agree with you about Sydney's general infrastructure compared to Singapore, Sing does a lot well. Not sure about LA, I've just come back from there and it appears to be very reliant on roads...also the airport kinda sucks (not that Sydney is winning any awards).

    I didn't say Sydney had been in mass transformation like Sing or other asian cities have been for decades (those cities have literally transformed very quickly over a 50 year period). In fact, as a city, in Sydney there's been relatively little public infrastructure investment over a long period of time. There appears to be a public infrastructure deficit thats being caught up. Fast.

    But as of right now, there are very very few developed cities with as much public infrastructure investment (if any). It's nuts.

    All at the same time:
    - Australia's largest EVER transport project with Sydney Metro
    - WestConnex is described as the biggest ever transport project since the harbour bridge (yes super salesy)
    - New airport & the western Sydney infrastructure plan associated with connecting it up
    - Light rail across eastern suburbs
    - Peak of resi construction cycle

    Thats all going on at the same time. These on their own are relatively massive projects.

    Im no expert on infrastructure, so I have no idea if this is most optimal/efficient. Its just very very noticeable that there's a lot going on.
     
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  20. Lacrim

    Lacrim Well-Known Member

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    To be fair though, even though Sydney as a global CITY isn't in the same league as HK or Singapore, it is is unique in terms of its world class beaches and fantastic weather. LA for example is a good comparison but its beaches IMHO are average and overrated.

    You'd be hard pressed to find large, 5m plus population cities around the world that can boast as many QUALITIES as Sydney does. That's what makes it sought after and expensive ie its natural endowments can't be replicated elsewhere.
     
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