It’s A Buyers Market

Where in your State

I know plenty of areas in Perth/WA that fit this category, however I still would not touch them yet

 

It's a terrible thing to be benefiting off, but the agent who I just purchased my last IP off has the listing rights for a bank acting as mortgagee exercising power... From her words there are already quite a few mortgagee sales coming in SEQ.

 

Prices haven't really dropped in Sydney. Still early days in my opinion.

 

I had a look at the GC as i though their would be so many sales that are bargains and again i cant find any bargains.

Maybe 2-4% off highs?

 

Similar in Sydney, not sure what to make of the tactics that go into listing prices in the current environment. Lots of price on application listings which don't provide much of a guide for a newbie like me.

 

In Sydney (depends where):
- Big shortage of stock
- There was a temporary seller panic where some buyers got some bargains and bought 5-15% under. Not many though, as majority of vendors held out. I saw a few properties in Liverpool LGA go from early 8's to sell in mid 7's. They're back at their normal prices now though. In more premium areas inner ring, there was some of this too.
- Overall, activity has fallen of a cliff, but prices haven't moved too much overall yet.
- With renewed confidence in recent weeks, I'd believe they're unlikely to fall much over coming months if confidence/momentum building plan continues.

 

Perhaps its too early for bargains in Sydney, needs to be more pain?

I think a different story in Melb, would like to hear from locals on this? Also dependent on product

 

Perth/WA always been buyer's market though.

Melb, stuff I look at:
- high end resi down 10-15% (ie $3m+)
- mid range resi (ie $1-2m) seems flatish. Maybe down 5%
- high end commercial/development sites down 10-20% (ie $8m+) or favourable settlement terms
- mid range comm/development (ie $3-8m) probably flat or down 5%
- CBD flying as I mention in other thread (probably up 10%)
- outer suburban farm land/growth corridor areas down 10-30% or favourable settlement terms (main area I'm looking closely now)

 

What’s Gold Coast like at the moment?

 

Prices still seem strong on the Gold Coast. The western family suburbs (Pacific Pines, Nerang, Upper Coomera) are staying particularly strong. I was talking to my PM there and properties are selling quicker than usual and at strong prices, still up YoY. Not sure the mentality behind it all or whether people think some sort of downturn is already priced in and now they have FOMO.

I've noticed a lot of hospo/commercial real estate popping up -- hotels in particular that used to be hot commodity on the GC.

There are still bargains though to be found as with any market... I like to think I picked one up last week. From what I'm hearing we'll see more of them over the next 4-5 weeks come on market.

 

Hi MTR, I was just curious how are your US investments doing? I admire your timing skills so just wondering if the US investments were impacted as much as the Perth markets? Thanks.

 

Thanks
Funny enough really good.

I have had all rents come in, 18 properties. However, 1 tenant lost her job but renewed lease. Unemployment benefit is $600 per week, she has a partner who works

Atlanta market is still very hot due to low inventory. Prices still rising

i have decided to sell 2 properties this year as AUD is favourable against USD.

Perth was starting to recover ..... then corona

Blue chip, inner city, period homes in demand, sell well. Outer burbs a different story

I was planning to develop my 3 unit site in Perth, but am just waiting to see if there is any impact on end values here. The development is close to city so I think it will be OK, will see

 

I follow Belle Property on Instagram and came across this:

https://www.realestate.com.au/sold/property-apartment-nsw-surry+hills-133561562

According to the agent, the vendor initially sold it for $990k to a buyer who accepted and exchanged at the peak of covid (March). Buyer had a cooling off period clause (or something similar), and rescinded the contract, and lost the cooling off period money, $2.5k apparently. Then, the property came into the market again, this time at $950k, the same buyer bought it (6 days ago), and if the story is true, she did well. I'm not an expert, but a 2 bedder, 2 bath and 1 parking space in Surry Hills for $950k seems decent, given its size and location.

 

Hey mate, towards the end of April (I know a month is a long time in covid times) you wrote a few posts predicting some pretty big headwinds and potentially some big drops in the market.

Just curious as to what has renewed your confidence. Is it the resilience the market has shown? The way the government has handled the virus/downturn?

 

I think I was suggesting it’d be the fastest fall we’ve seen (not biggest) and a stop in activity.

Prices were running hot at large MoM growth levels, and they’ve suddenly started going backwards. Like a car racing ahead that’s hit a brick wall and starting to reverse. I can’t recall a time that’s happened before. Usually change in housing markets is slower. The above is late March to early May.

More broadly, there’s a whole lot of positive forces in the market that’s not strongly talked about by media, which does provide some support to this ‘fast fall’ becoming a ‘big fall’. Income support, mortgage repayment changes, stock changes and lower interest rates mainly. These are all very substantial too, but there is also one of the biggest demand challenges the market as a whole has likely ever faced.

Where I look, there were some seriously good opps in March and April that aren’t here at the beginning of June anymore. Those sellers that held out will likely do better now than then. At this early stage, I suspect much of this is tied to confidence at this stage, rather than real economic/income/employment/debt factors - which will likely play a larger role over time in seeing direction. Confidence is shaky at best now and can change quickly too (second waves/etc).

 

Curious, are you able to give an indication whether you have clients buying. My guess many are refinancing at the moment where possible

 

@MTR - imo there's currently more buyers than stock in many parts of Sydney. Vendors are a bit more realistic on clearing prices too. Enquiry level for most small size brokerages would be V shaping over the last few months (not as big as before just yet though).

Right now:

- Its entirely possible that in hindsight we'll be talking about how the government saved the housing market through its greatest demand challenge and kept price stability (other than a very short term shock in March/April/May). If the governments current plan comes to fruition, then I think this will be the story (the plan is broadly: supress - tick, build tracing,traking, etc - tick, reopen - tick, restore confidence - ticking, October reset growth budget - in progress)

- It's also very possible that there's a massive second wave that's larger than the first and all economic predictions are too rosy, and there's just too much pressure on household incomes, etc that mean prices fall again.

Given the above scenario, it's very difficult to accurately predict where things could actually end up. I've never in my lifetime seen such a bandwidth of possible 'base cases' that could both be plausible.

 

I can say that in my recent experiences melbourne, lower priced to median priced free standing homes/units (havent kept an eye on apartments)in a 10-25km radius generally have held up very well,
asking prices have been stable, some of the ones fishing for higher prices seem to have gone/adjusted,

enquiry levels seem to not have dropped
and with restrictions easing, unless there is a second wave, I cant see anything worse than a few % drop

 

This is good, thanks for update

 

I’ve had my eye on Essendon, ascot vale, Moonee ponds, Brunswick west, and Kensington for awhile now.
Essendon/ascot vale seems to be holding well

BW, Kensington, & even some great deals in Moonee ponds are popping up that would likely be 10% higher pre Covid. Some 2/1 Victorian terrace homes popping up in the 7-8s in the nice streets of Kensington is what I’m starting to see