How long before we will begin seeing prices falling?

Agreed - we're waiting atm, while watching the market very closely. Waiting until the new financial year so we can sell a second older unit (that has done it's run) and free up the cash - waiting until consumer sentiment kicks in and the market slows so we're not trying to outbid half a dozen others who are suffering fomo ... basically waiting until things slow enough that we can walk in with cash and put a low but unconditional offer on the table with a "take it or leave it"

I don't like the auction or silent bidding squabbling - it's undignified

 

Remember if you wait 1 year and prices are flat with 5% inflation. Prices have falling in real terms.

 

I am assuming we are not talking about hyperinflation here,

Since we are coming from almost zero rate with extreme high debt and an decade long extreme low inflation environment to a normal or even slight high inflation trajectory,
existing debt/leverage burden will first bring all asset prices down.
'cash invested' and 'borrowing to invest' are two different things,
There is a time to leverage and there is a time to deleverage, not every price is investable

 

In the last 4 days I’ve received 3 random phone calls from agents I’ve come across at opens earlier this year to “see where I’m at”.
This NEVER happened in 2020/21 in the hot market. This indicates to me that something is happening.
Even if the prices are just settling, that’s better than what was happening.

 

Did you end up buying over 2020 2021 and currently in 2022?

Which area?

 

No I didn’t buy as everything was over inflated. I’m in Melbourne.

 

borrowing capacity is being effected. how do you expect prices wont fall? who is going to buy if banks are lending like late 2021.

 

I have been trying to educate agents all week. I have made multiple offers for clients on decent homes. Solid cash offers slightly above the pre auction marketing range (and fair on actual comps). Agents keep calling saying they wont sell unless offer is $100k or more higher but they keep guiding the current low range to the public.

I have told them my current client will not be bidding at auction due to personal preference and wants to buy private treaty. The agents aren't getting multiple pre auction offers anymore. Agents know my offers are fair but vendor won't consider until after the auction.

Some owners are just in denial and dream of adding 15% to any high number that can actually be justified and it will take time for them to come back to earth I guess.

 

Was this the right decision, do you think, in hindsight?

 

... and then you can go in after a passed in auction with an even lower offer

 

The dignified undignified

 

Yes I do. I was not desperate. I’ve seen how the market can be and I’ve been through and observed the market years ago where things were stagnant, in good areas and bad. Not sure why people don’t think this could happen again.

 

Very true. I think the media also has a large part to play with this. In the past week every single day, they are still talking about the rate increase and talking about property prices falling as the top 3 stories.

But I have noticed that properties are not going as quickly as they were about 6 weeks ago so something is definitely happening (and this is before the rate announcement), just not sure how long before we will actually feel the full effects of this recent rate rise.

 

But your cash value has also fallen by the same amount. So what is the difference?

 

IMHO price in established areas of tier 1 cities in developed countries never goes down. What can go down for a phase is rate of growth. When media articles talk about price going down they refer to rate of growth slowing down. So, best time to buy is always ‘now’ if you are looking in well established suburbs.

 

this is just not true though mate, plenty of actual real world data showing 'blue chip' property in syd/melb declining 10-20% in the past

 

Lol, seriously?

Sold 10 Ashburner Street, Manly NSW 2095 on 18 Dec 2021 - 2017444281 | Domain $4.215M
Sold 10 Ashburner Street, Manly NSW 2095 on 11 May 2022 - 2017721744 | Domain, $3.6m

 

Sydney houses fell 10-15% in 2018. That's a fact.
But it turned out to be a great opportunity to buy.

 

I think it's a reasonable claim that blue chip capital city real estate typically goes up. Of course, it's not exclusively true over short time windows, and we have much more volatility in the post 2008 zero interest rates environment.

The proper way to make a claim like this is to do it in conjunction with a time frame. For example, blue chip property always goes up ... on a rolling 5 yearly basis. Or something like that.