Melbourne and Sydney units to take biggest hit

From the ABC today:

Home prices predicted to fall with Melbourne and Sydney hit hardest

Now, Michael Janda does like to seek out doomsday economists whenever it comes to property. Then again, look at those graphs! An apartment purchase in Melbourne anyone?

2018 truly is shaping up to be the year of the millenial...

 

4% fall in Sydney apartment prices sounds like an extremely conservative prediction. Some apartments are already down by 5% in prices and we are nowhere near the worst. How to trust the article if even the basic predictions/numbers aren’t aligned with the reality?

 

Be interesting to get an insight into what has been happening with all the units that are being listed but not sold for the last 7 years.

 

I know of units sitting in the market for a whole year not selling. Owners don’t budge they’re just waiting for the market to catch up to their overpriced expectations.

Total apartments for sale in Melbourne cbd and inner area: 4100

 

There is no graph spcecific to Sydney but I would love to know about the situation in Sydney.

 

Capital Economics: Australian house prices to fall and fall...and fall - MacroBusiness

not all doom and gloom:

"At the other end of the spectrum, the recent strength of demand relative to supply suggests that house price inflation in Adelaide may accelerate over the next six months, from 1.7% in March to around 6.0%, and in Hobart it may rise from 13.0% to around 17.0%."

 

There was a piece from about a year ago on the ABC's site about a potential housing bubble, and it contained this snippet.

ABS figures revealed that in the December quarter, across the eight major Australian cities, house prices rose 8.9 per cent and apartment prices rose 4 per cent.

Similarly, if you look at the investment figures for South Yarra on Realestate.com.au:

• The average unit increased from $465K to $570K (23%) between 2009 and 2017, and yields 4.3%.
• The average house increased from $1.13 million to $1.74 million (54%) between 2009 and 2017, and yields 2.2%.

Note that the median sales price in South Yarra in 2010 was $670K, which suggests that the figures might have been skewed by a spike in 2009.

We keep on hearing that apartments are risky, but houses are, well, safe as houses. What if the received wisdom is wrong, and it's the latter that are bubbly? They've got much lower yields, and had much more rapid growth.

 

Because you know some apartments in Sydney that fell 10%

and I know some apartments that gained value the number is in between.

 

Title says units. But every one is talking about apartments

Entry level units are still quite hot

 

Sydney is already down 4.3% from the recent peak right now (as opposed to being 2.7% down as compared to this time last year, which is where the index is sitting). If it keeps dropping at the current rate it'll be down 5% just within the next month give or take a few weeks.

 

When you take in to account transaction costs and interest, on average, if you purchased in the last 12 months you are likely in the red, with the possible exception of Melbourne. Yes, I realise that there will be individual exceptions to this statement but on average, according to the data, it is irrefutable.