House price increase from trough ... so far

Discussion in 'Property Market Economics' started by wombat777, 1st Aug, 2019.

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  1. Blueshoes99

    Blueshoes99 Well-Known Member

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    It is but it’s also not. For such a nice house it’s worth the price even with the extra spend on finishing it.
     
  2. Codie

    Codie Well-Known Member

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    True. Not totally upset brisbane isn’t moving yet as it still presents a good opportunity to buy &
    Accumulate, heres hoping it plays catch up when it does kick on.
     
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  3. standtall

    standtall Well-Known Member

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    Agree with the gist of what you are saying but Brisbane not responding to post election sentiment worries me a lot - two rate cuts woke Sydney up from a near death experience in no time but seem to have no affect on Brisbane at all, not even spring time boost this year.

    I haven’t been on the ground in Brisbane lately but seems like something is seriously wrong with the broader sentiment and the state economy.
     
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  4. standtall

    standtall Well-Known Member

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  5. Codie

    Codie Well-Known Member

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    I’m friends with one of the top place agents here & have also spoken with a few other agents in the last 2 weeks, on the ground things are busy and good stock is selling quickly, also a lot of off market sales.

    I just don’t think there’s enough competition to drive any meaningful price growth in the lower to middle range, the upper premium range is seeing price growth and healthy competition. 1.5m+ Obviously gets you a lot for the $$.

    Brisbane really just needs jobs, seems to have everything else apart from this. I Wonder if the likes of queens wharf, Brisbane live, new airport and a few other projects will help this?
     
  6. standtall

    standtall Well-Known Member

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    Brisbane needs right kind of new migrant (both interstate and overseas) who end up creating economic value and drive up asset prices. IT/Finance/Engineering grads and professionals instead of a mass student visa to PR program which only adds Uber drivers to the economy.

    QLD Govt should start by giving tax breaks to IT start ups and introduce high skilled sponsorship visas aimed to bringing and keeping very high skilled professionals in the state.
     
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  7. Blueshoes99

    Blueshoes99 Well-Known Member

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    It already is expensive. Big house on large pieces of land and close to metro and shops. Castle Towers will be the biggest shopping center in all of NSW. Not to mention all the shops around the hills are getting an upgrade. I remember Baulkham at $600k and castle hill at $800 and then boom in the last 2 years it went nutters because of the metro.

    Can’t get anything under $1.4. It takes 12-15 mins to get to Macquarie, 20 to chatswood and 40 to wynyard. Really good schools and family oriented. For first home owners buy an older apartment around the hills to get your foot into the door and then change to a house.
     
  8. Leeroy93

    Leeroy93 Well-Known Member

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    Agreed. The key lies in attracting high paying skilled labour. I think the universities have a key role to play not only in attracting skilled migrants, but also driving industry and innovation. Some cities like Austin and San Fran have leveraged the power of their educational institutions to create tech hubs that subsequently drive further demand for both skilled labour and international students. There is already solid growth and demand by international students. Take a walk down the CBD, around QUT or UQ any time of day. All that's missing is the investment (Gov + Private) to support the jobs those students desire.
     
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  9. ms420

    ms420 Well-Known Member

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    Good examples posted by @standtall and @Blueshoes99 of the ridiculous prices people are paying in the Sydney hills area. Going to open houses has become a futile exercise knowing that the marginal buyer will out pay you every time by $100k or more. There is no ‘value investing’ in real estate, at least for now around these suburbs.

    I guess 2019 is when Oz acts like US did in 2007 ;)
     
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  10. John_BridgeToBricks

    John_BridgeToBricks Buyer's Agent Business Member

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    Great post ms420. I certainly am seeing what you are seeing and it is quite hot out there.

    Firstly, I am not sure we are on the edge of another correction in the same way the US was in 2007. We just had a major correction didn't we?

    The 2007 US bubble was much also bigger, lending practices were more lax. I think where we are is more like the year 2000, where real estate was expensive indeed, but a stock market crash actually fueled a real estate run for the next 5ish years with housing acting like a safe haven.

    I see another interest rate cut this year, and a solid run in real estate for a few more years. The next big leg up will be rents, which hasn't started yet.

    I also agree with you that Sydney residential real estate is a challenging playground for "value investors", but it always has been. Reasons for this are many, including the tax system, the banking system, etc.

    Rather than thinking the market is wrong, the better course of action in Sydney at least, has usually been to accept that Sydney is a low yield high growth market, and play along anyway.
     
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  11. Blueshoes99

    Blueshoes99 Well-Known Member

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    I did a filter last night on Realestate and domain and realised there are only three main areas you can buy stand alone houses on land in Sydney for around 1.4-1.5 - hills, parra or near the Bankstown to Liverpool area. No offense to people from the b-l areas but if I was a family I would rather buy in the hills. Parra is not bad but it doesn’t have the family feels like the hills. This is probably why the hills has increased and considering there’s not much stock out there, it all makes sense.
     
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  12. San2018

    San2018 Well-Known Member

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    I am targeting hills and some northshore suburbs from last 6 months. I see prices gone up ~200K post elections. I increased budget but still struggling to find what I need. Not sure if its worth to buy with that premium. I am thinking to give up and invest somewhere else and rent.
     
    Last edited: 23rd Sep, 2019
  13. Trainee

    Trainee Well-Known Member

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    The returns on your investment would have to be higher than your intended ppor, or you buy more in value than your intended ppor. Or you expect it to fall.
     
  14. San2018

    San2018 Well-Known Member

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    Can you pls clarify what do you mean by "you buy more in value than your intended ppor"

    The problem is no crystal ball what will happen in next 5-10 years. making the decision is the challenge.
     
  15. Trainee

    Trainee Well-Known Member

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    How do you stay ahead of a 1m ppor that grows at 5% a year (say) if you dont buy it now?

    You buy 1m of something else that rises by more than 5% a year.

    Or you buy 2m of something that rises at least 2.5% a year.

    If ppor though there might be other considerations.
     
  16. standtall

    standtall Well-Known Member

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    One strategy I have seen fail so many times in Sydney is to invest elsewhere while renting in Sydney and then expecting to catch up with the market on the returns of your investments. Unless those investment were in Bitcoin prior to 2010, with the life phases it becomes harder and harder to get back on Sydney property PPOR ladder. Why I call it a ladder is because most Sydneysiders of current generation of home owners trade up PPORs 3-4 times before settling on one.

    A typical path (via Hills)

    - Start with a unit in inner west close to stations and child care amenities
    - Upgrade to a house in Kellyville/The Ponds/Rouse Hill in good primary school catchment
    - Then upgrade to Cherrybrook/Carlingford/Beecroft/WPH to get closer to good high schools
    - If you have done well on above 3 steps, then do a knockdown/rebuild with a 3 car garage in Killara/Pymble/North Ryde when kids start going to uni

    Some people on good incomes hold some of these houses and others jump straight to a later stage but investing in QLD at an early stage will only make things harder down the road while being already firmly set up on the ladder, it will make more sense to start growing an interstate investment portfolio.

    Some people are wondering who is paying $1.8m+ in Cherrybrook and where is that money coming from. I have a friend who just sold a house in Kellyville for $1.4m+ so he is not as worried about Cherrybrook prices as another friend who waited 10 years to buy his PPOR in Sydney and while his deposit is quite large as first home owner, it's quite small compared to equity carried forward by the other friend.
     
    Last edited: 23rd Sep, 2019
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  17. Rugz06

    Rugz06 Well-Known Member

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    There is so much wrong with this post.
    A quick search on domain for homes with land greater than 500sqm in the sydney region finds 1300+ homes.
    Any thing West of King Georges Rd there are plenty.
    If you increase to $1.5m, you can get homes with 500sqm+ land within 15km of the CBD. There was 1600+ homes with this search.

    Now I believe if you used RE.com there would be more again.

    St George still flys under the radar (relatively speaking), let alone the Shire (thankgod!) 20-30mins from CBD, minutes from rail, beach, shops, lifecycle etc. I hope more people buy up the Rouse Hill way because its ridiculous in comparison.

    I guess what keeps the Shire price down is that the population/growth rate is very close to neutral. Most buy/sell are locals either downgrading or upsizing.
     
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  18. Blueshoes99

    Blueshoes99 Well-Known Member

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    Oh yeh I should have broken it down further. I kinda lumped that area with Bankstown - Liverpool. I sorted by sold prices and for sale prices. Either way sydney is pretty expensive and if one wants to buy a good house on land you’ll need to save some serious $$$. E.g at least $230,000 in cash to buy an $800,000 house including stamp duty. $450,000 to buy a $1.5 mill house with stamp duty. Per the previous comments made people have to get into the market somehow and then upgrade.
     
  19. BuyersAgent

    BuyersAgent Well-Known Member Business Member

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    If you think either St George and The Shire are the same as or part of Bankstown or Liverpool you don't know Sydney. These 4 markets are very different places, and have submarkets within them.
     
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  20. Blueshoes99

    Blueshoes99 Well-Known Member

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    Micro markets in the hills too. Not gonna breakdown every micro market.
     

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