House prices fall by suburb

The parts of Sydney where home prices have fallen most, in one chart

 

Interesting that appartments are still holding. Would be interesting to see once all the expensive units in green square settle.

I’m seeing discounting in Zetland and Green square. Don’t they no it shows because of settlement of newer and expensive units.

 

Its mostly because people are running in to the borrowing-power-wall for houses. So, it is increasing the competition for (cheaper option) apartments.

 

Agreed.

I think a credit crunch is coming.

Hope the Civil construction keeps the boys employed otherwise..

Interesting times ahead

 

Interesting indeed... Since we were told west and south west won't hold.

 

wow... and its just getting warmed up,
Imagine the massive repayment shock of all the 400+bn IO to PI loan conversion resulting in few distressed sales,
plus upcoming OTC settlements,
along with Sellers FOMO,
all under an ever-tightening lending environment,
this can turn ugly.

 

South west are doing much better than the rest! maybe is still relatively affordable.

 

Thanks TheSackedWiggle,

Great chart, and really interesting. Thank you.

One of the takeaways seems to be that the falls are greatest in areas where there is the most new stock. I suspect, that the falls are actually driven by declines in new or off-the-plan prices as foreign buyers are less prevalent. Is there any way we can validate this?

The tide does seem to be going out, however some investors would be more affected than others depending on their strategies.

Kind regards,
John

 

Not by me. I've been saying for the past couple of years the west will hold up well compared to last boom. Affordability is still relatively good and lots and lots of infrastructure going in.

 

Problem is the people doing the 'telling' are clueless clowns.

 

It has beganth. If interest rates go up will not be pretty. The good thing the interest is unlikely to go up anytime soon. If economy performs as is or picks up to 3% we might have prices stagnate. Not in new estates though and not in new high density areas.

 

Badgery Creek?

 

I agree and include lower part of Central Coast for similar reasons.

 

I think you will find what is happening on the ground is dramatically different..for example stuff on Oran Park, Spring Farm, Gledswood Hill are going backwards

So are a lot of places around Liverpool....the trend is down...hoping for the best is going to end in tears.

This is also very similar to a few on the forum who think that places like Eastern suburbs/ Bondi are bullet proof...not true.

What is also hilarious is whilst Brisbane will do well in certain locations it is mostly existing stuff...some people think developing Brisbane makes sense...not at this point.

For example....buying a block of land in the inner city of Brisbane say for 700k ...add stamps another 25k....add infra charges another 60k...add another 800k for a build.....add sell cots...say another 30k...you are at 1.6m spend by the time oyu factor interest and other holding costs are at 1.7k.....hoping someone will pay $1m plus for a essentially a T/H is wishful thinking.

 

Good example, the deleveraging cycle has started already. IMO Aus property will not be an asset to get into for next couple years at least.

Will be interesting to see if we get a correction or crash in next couple of years.

RBA will likely be forced to lower rates to steady things.

 

My two cents worth:

I am fairly confident that this is not the crash that everyone is expecting, with a correction likely single digits, and limited to 12-18 months in duration. I suspect by June 2019, the market will be moving upwards to sideways again.

My guess is also that the correction will be felt mostly by (a) detached houses where investors have fled the market, and (b) off-the plan units.

The real correction will be absorbed via a weaker AUD currency.

 

South west is not necessarily just new estates such as Oran Park.

On the other hand
Moorebank, Chipping Norton, Liverpool, Lurnea esteblished parts or Hoxton Park are all South West Sydney. (established)

I keep an eye on these areas and speak to agencies a fair bit.

Prices are flat but holding.

New estates where people paid 1+ million will take a hit.

 

I recall seeing this graph on Cameron Kusher's twitter yesterday (he's the guy who put the graph together, along with one for Melbourne) and he said it was probably because original data excluded all off the plan apartment sales results, and that was almost certainly the reason why apartments appeared to do ok. As in it's only established apartments in the results. He also said price point was probably a big influence.

 

I mean, this is just a year (not even, it's actually results from peak, which was around September). Wow though. I expected at least some growth areas.

Here's Melbourne (the same results/graph). The parts of Melbourne where home prices have fallen most, in one chart

 

This was the way it played out in Dublin (and other counties). The new stock on the city fringe, and apartments (but mostly the former as they were a more popular investment) took by far the biggest loss overall once you accounted for the recovery. Many of those estates just never recovered, or are barely starting to (Belmayne is a great example to look up if you want an example).

These new development areas are vulnerable because almost everyone in them is leveraged to the eyeballs, as opposed to established areas where owners have no incentive to sell even in a pinch. They were more vulnerable to negative equity, filled with peak-buyers, and also tended to stall in terms of infrastructure and development when the recession hit. No one wanted to own in a half developed suburb full of people defaulting.

Another really big thing was discounting by builders who owned multiple lots. They couldn't push their stock, and so cut prices, and individual investors couldn't compete, so it all sort of spiralled. Later, people had a real bugbear about "ghost estates" and public backlash was pretty strong. Lots of high profile articles about kids drowning in abandoned pools or crime waves.

Overall, I'd be getting out of these areas, but staying calm if you own in a good, established tightly held suburb, because home buyers are going to drive competition going forward.