Melbourne Median House Price to reach $1 Million by the end of 2018

Melbourne predicted to have $1 million median house price by end of 2018

 

Just about to purchase two, so let's bloody hope so.

 

Fixed

 

Good..... if property growth averages 3% whilst wages lag at 1.5%, coupled with interest rate rises..... then affordability plummets even further.

Yeah, this is completely sustainable long term .....sigh....

 

It is moving which were like in 500kish just last year moved to 700kish just on today's auction results alone

 

Interesting point of views from the 2 speakers in the video

1. The first guy truely believes the coming up the stamp duty concession/ exemption for FHB will help to improve the affordability of the housing. Its more likely to be the opposite, it will further heat up the sub 600k market and making houses unaffordable for FHB

2. 50% tax deduction cut for investors. He doesn't understand the property price is mainly driven by the majority of owner occupiers. Experienced investors work on numbers and less likely to overpaid on property. I do agree cutting tax deduction will reduce the numbers of property investors, but in a rising market property price will still go up when the majority of owner occupiers are still look for houses to buy.

 

I wouldn't be surprised if this is the case. The stamp duty exemption for FHB will mean a whole bunch of FHB will come out of the closet and intro the market, and put a rocket on the lower priced properties, and those sellers will then spend more money to upgrade their properties etc ........

 

1. I reckon stamp duty concession/exemption will drive up prices and flow into the more expensive properties as people have greater equity. This incentive will get FHB to buy though.

2. I actually think investors have a huge impact in the price of housing... Every time an investor outbids or competes against a FHB (or any home buyer for that matter), it pushes up the prices. If 40% of purchases are made by investors, wouldn't you think it has a huge impact on affordability?

 

@+men is right. Smart investors should not be responsible for pushing up housing prices, they should be getting in based on fundamentals when the market is recovering not based on hype when the smart money is selling down (or just holding as property investors often do).

When the market is already peaking it's gamblers/speculators buying in under greater fool theory and owner occupiers buying in on FOMO or other emotional drivers.

That said investors may continue to buy if they feel the fundamentals still make sense ala melbourne market now, but you can see from these forums that many experienced investors ( @MTR for example) have stopped buying and of the experienced investors who are still buying in Melbourne ( @sash and @Connor for example) it is mainly in outer suburbs that are lagging in their growth cycle or are still affordable and therefore running at different fundamentals than inner and middle ring.

 

I think any investor anywhere buying existing property is pushing up a price! Investors still make up a lot of demand. Supply is limited. Demand pushes up prices. It takes time for new properties to be created. And in Sydney at least, supply doesn't keep up with demand. So prices go up....

 

Your too quick and beat any edits... I have a bad habit of reading my post after posting it and making changes.


Obviously anything that increases demand without increasing supply is going to have an effect on driving up price. You don't need a masters in ecconomics for that pearl of wisdom.

But my point above is about the fact that the art of investing is getting in pre hype at the point of contracting supply not at the point of hype which is when prices start to jump really quickly. Still nothing wrong with buying in early at this point too, but you need to understand every year you are late to the party your overpaying and giving yourself a years less extreme growth before the correction. Booms typicaly only last a few years, so you want at least two to be up substantially following correction.

 

Ok, I've read your rewritten post.
You are suggesting investors sell property at peak. But with the buying and selling costs and CGT incurred it may or may not be the best thing to do.

If buying in a solid location.... I'd hold forever. Of course, consider the land tax and other holding costs. But long term... Sydney property prices went from being around 45k in the mid 1970's to now being over $1m for the same property.

I think it would have been bad to sell out at 90k and never buy back in...

 

No not suggesting to just sell down. I do both. I like to sell some to reduce debt to be able to go again, but I am active and adding value. For those not adding value this doesnt serve as much benefit. However if you bought say 3 properties at the start of the upswing, then I would advocate selling one or two and buying more in markets yet to peak like some areas of Melb and Qld and even getting yourself in a position to be able to buy Perth. Doesn't mean I'm doing that, I have a system working for me in Outer Melb and I'm going to keep beating that drum until it comes off (all the time selling some to realise profits and preparing for a correction). Still growing my holdings at the same time.

 

Hey @Cactus... sounds like a solid strategy! I might need to do the same... damn serviceability!
Take more profits from Sydney and buy again elsewhere....

 

I normally stay away from the market when the journos are optimistic, be vice versa.

If the journo is so smart, you know the next bit

 

Ditto!

 

Most overheat asset in anything from shares to properties to tulip are driven by speculators
I say right now we have a lot of properties speculators in play, it bound to correct at some point but no one knows when

 

I doubt it, we will see, maybe it is only those without rose colored glasses that can see that red brick wall down the road

 

They said 3% per quarter as well.

To be fair I can see it happening as the bottom end is going crazy, when all the 300k properties become 600k due to FHB demand, I can see a median of $1m…

May our children forgive us.

 

that's pt cook right there can see that happening - was 300kish a while back to 600kish, well now is nearly high 500kish and some selling 600kish