Melbourne starting to get a bit gloomy (video)

A local agent from the Inner West. His weekly updates are pretty realistic ie, he doesn't spruik.

From the video:

"A lot of buyers not turning up to bid"

"There are two things going on: Some vendors accepting the current market and other vendors holding out for 2017/16 prices which are no longer there, and have dropped about 5%"

"The biggest issue is the sleeping giant, the royal commission, and it looks like there will be even tighter lending in the future"

 

And an article claiming melbourne will start recovering from the recent "price correction": Here's how the latest downturn in Sydney and Melbourne property prices compares to those seen in the past

What price correction? I've seen none.

 

I thought this was going to be about the weather... sorry bad joke

Thanks for sharing this link

If you can not source loans you can not buy.....of course this will impact the property markets.

Price correction, if supply increases you will see a correction, just because you are not seeing it now, does not mean it wont happen. Its all about volume, supply vs demand.
The worm has turned.

 

Was in the auction last nite for 603/29 Market Street Melbourne Vic 3000 - Apartment for Sale #127852110 - realestate.com.au

Huge crowd turned up, with 5-6 bidders. I think would be hard to get lending due to the small size (only 44sqm, no parking), but hey, was sold for $501k.

I guess as always, good properties still sell well. Those with a bit of flaws (e.g. next to high way/ no ensuite/ weird layout, etc) need to get realistic with prices. People can pay good price, but properties have to match their expectation.

 

Yeah that’s a unique one, must’ve had something going for it, maybe some special heritage building. You can get 55sqm in cbd for 330k.

 

was looking at this from realestate. - good analytics

very interesting data - it tells you which suburbs have grown and gone backwards with GEO charting. the more red - the highest the growth - for example collingwood 31% - if you compare with a suburb for e.g. deepdene which is now negative 9% (with median price 2.5 mil) it makes sense - you will reach a plateau. even though you're in the balwyn high school zone. and also kew and parkville - negative growith - contrast that with like broadmeadows 30+%, thomastown 29% and rest. have said - not all suburbs grow or boom equally in time.

 

It's the Port Authority Building, a very iconic heritage building. The lower floor has a massive 3 bedders selling for $7.5M at the moment. The main selling point is the unblockable view to the Yarra river, which i think adds about $60k to it.

 

u seem to have a thing with all these small apartments monitoring them closely?

 

Isn't @DrunkSailor the guy with some buyer's remorse after having bought some apartment somewhere in Melbourne? I could be wrong here.

 

Yeah I’m monitoring them very closely, you can find real good deals in Melbourne. I missed a golden opportunity 5 months ago getting a unit %30 under market value. I had conditions on the offer whilst the other buyer didn’t so I lost out. I’ve been keenly looking for a similar buy but I think those sorts of deals won’t come up now we are at peak.

I’ve been gravitating towards a cbd unit in an old building because the yields are so high.

 

absolutely stunning property. IMO a relatively good price too. Love the setup the previous owner has... i would love my own private CBD librabry. Only downside to me at that price is the lack of parking bay but that's personal preference.

@DrunkSailor i imagine you'll cop it for your strategy focusing on Melbourne CBD, but i actually think there's a lot of merit to it, definitely more than people who are investing in low yield land grabs at this point in the cycle. CBD properties have been getting hammered by investors for a while, so yields are quite high compared to market. Tasteful apartments in old buildings are only going to get more rare, so getting in while sentiment is low is a great strategy in my eyes.

 

Yeah, i guess whatever you buy, it has to be special, and has its own niche, regardless of whether it is an apartment, townhouse or even a house, with the right price. You could overpay a big landed house or you could make money by getting the right shoe box at the right entry price.

I won't be surprised to see this double in value by 2030, not to mention the amount of rent you could get by say doing Airbnb plus every year. One of the owners in the building got scared because of the Pantscrapper development next to it, but they were surprised by the level of interest on the building. I guess it's also kind of a trophy collection for the wealthy who lives in the country or eastern suburbs.

p/s: Parking along Collins st in that precinct would easily worth $100k.

 

It’s a tiny shoebox without room even for a sofa. All the parquet in the world wouldn't make up for that imo.

 

Dont panic market has turned

 

I don’t plan on waiting for a correction to reach the bottom end of the market, I’m just keeping an eye out for something that’s good value. Who knows what last ditch effort the government will pull to cause one more spike in prices before it all comes apart, especially with the election coming up.

But if I was investing I wouldn’t touch Aus real estate until all this noise quiets down. Extreme credit tightening is a perfect factor to cause a quick plummet in prices and with this royal commission under way which is starting to gain traction you’ve got a recipe for disaster. There’s a big difference between “timing the market” and recognising when the risks are starting to outweigh the rewards.

 

Current Apras strategy to deleverage the systematic risk by credit tightening is quite smart, it targets 'speculative froth' far more effectively than the blunt instrument of raising interest rates for everyone.

 

Just far too late, should have been at the start of the rises in Mel and Syd, then it would have been a rock steady base most likely.

 

i think CBD has a lot of opportunity - i personally would choose location, size over the older buildings. in fact i saw one in docklands OTP that i would even buy.

 

They have the same effect, investors out

 

Time is on your side now, when markets softens could be a few years before we see another upswing??