Getting Pushed out of the market?

Good morning all,

I thought it would be a good idea to share some thoughts and experiences with each other.
The last couple of months, I have seen Melbourne property prices climb to a point where many future home owners are being pushed out.

But in recent times, I have also witnessed investors being pushed out as well?

Any one else have any further comments?

 

I don't think we're pushed out we've just got to save more but than again I'm in Adelaide where prices are 2/3 the price of Melbourne. There are still affordable places in Melbourne they're just not in desirable suburbs e.g. Broadmeadows.

 

Inflation catches up. Those properties get cheap. People say oh I'll wait for it to go down even further. Property prices go up. We begin the cycle again. Being locked out is only a state of mind, unless you *have* to buy during a boom.

 

Melbourne is expected to jump another 10% as well so it's definitely not good for first home buyers or investors that lack a deposit/equity looking to get into the Melbourne market.

 

Was nothing learned from the Irish crash? People threw silly money at anything to get into the market and it looks like this is still happening albeit at a slower pace since regulatory changes . FOMO has really crept in for both Syd and Melb over the last few years with a few FHOB's telling Ch7 news reporters "I just have to get in at any price, even if I know it's overpriced". What type of justification is that?!

Prices will stagnate, inflation and wages will increase, prices will start their run up again. Basic cycle.

https://propertychat.com.au/communi...priced-out-of-the-market-90-cant-afford.4119/

 

Look at London. Prices are higher than ever. I think some cities like Sydney will increasingly become globalised. Therefore, traditional fundamentals, such as median price to median income ratios are going to become less relevant in the future. Fundamentals will still have a factor when it comes to rents and achievable yields but in terms of capital growth there will be less of a lid. Add the extra 100k people living in Sydney each year (predominantly rich migrants) and the limiting geographics of Sydney and it has the potential to be a city almost exclusively for the rich. Time will tell.

 

I was a Melbourne buyer just before the last boom and the same thing happened then. At first owner occupiers were pushed out by investors and then I saw investors out bid by owner occupiers at auction. Prices were ridiculous. After that, prices dropped then stayed flat for a long time. Over time, prices were more affordable and now we have another boom where prices are insane. That's the property market. In 3 or 4 years, those who were pushed out of the market will be able to jump back in and if they save between now and then, with a much bigger deposit.

 

Australia ≠ Ireland

 

Depends where you are looking, and what type of dwelling you are looking at to a large degree.

Unfortunately, as the years go by, the bulk of folks in this Country are going to gravitate more and more to the two main cities - Sydney and Melboure - due to long term job prospects.

Everywhere else will just wander along in first or second gear, until the rent yields get really juicy, then the investors will swarm in and wreck that for a short time until the yields are horrible and the excitement will stop again.

Or; a new and exciting industry or massive construction project/projects start up and a few more bodies move in for a time to do the work.

 

Obviously but we could easily head that way.

 

Refer Exhibit A: Sydney property market

 

Agree.
Where are all the stories of people getting pulled into the market, when property prices were low?
You don't hear too many stories of desperation and getting in quick when the market is down, before it's too late and don't miss your chance before prices rise again.
When prices are low, everyone relaxes and the panic only happens when prices get out of hand.

 

Can I ask what area this was in?

I remember I went to auction in Broadmeadows (2011 or 2012 I think) for a home with subdivision potential. Sale price should have been max 350, I was willing to go to 360 as melbourne was crazy. Bidding went to 387k and slowed, and then a young couple threw a winning bid at 430 out of no where. They won the bidding, stopped everyone else bidding, everyone was trying to workout why at 430...wasn't worth it, wasn't even going to hit 400k. I love auctions, It thought me lesson though. Stay away from auctions when the heat is on

 

Do you think the house would even be worth 430k now?

That's the way auctions work though. They suit heated up markets where buyers (particular owner occupiers) tend to get emotional and over-pay. I went to an auction last year in St Marys and my jaw dropped. It was a similar story and a youngish couple ended up bidding about 100k over what I estimated the house to go for. The irony was that this wasn't even in a heated market it was a couple going for their 'dream home' and only bidding against one serious contender.

 

Just compared sale prices around the area with similar block and home, best case scenario 380k, recent sales.

Auctions are awesome to watch, people do weird things and loose all control of reality. Emotional buyers are the best.

 

These things are all cyclical. Melb still has legs, Syd has turned. But at the end of the day, you just need to be able to resist the temptation when you know it's at a peak, and be decisive when an opportunity presents itself. Most people are terribly bad at both - especially the latter.

 

True. Broadmeadows is one of the few suburbs in Melbourne that hasn't really taken off since 2012, which is unfortunate for those purchasers.

 

Heidelberg Heights.

But the really crazy Auction results were Rosanna and Macleod.

There was one particular one I remember on the hill overlooking Heidelberg where two OOs were duking it out. Developers wanted it but it went too high and they got in their cars and left. The house was horrid but the block was amazing. I wish I could remember where that was.

 

Yes I remember Rosanna was hyped up big time, prices moved quick so I looked elsewhere.

I haven't been to any actions for ages, I'm currently not looking to buy so I'm not sure how nutz Melbourne is at the moment. I want to go, but I'm afraid I'll get excited and start looking to buy again. Don't want any more for now lol.

 

Crazy! If you want to see how mad, go to re.com.au and search sold properties for Rosanna. Sort by most recent sold date. Mostly over a mill.