Melbourne's First Signs?

Discussion in 'Property Market Economics' started by rayan1910, 18th Jun, 2017.

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Does this mean anything?

  1. Yes it's going to cool....

    27 vote(s)
    61.4%
  2. No...it's going to continue to rise

    17 vote(s)
    38.6%
  1. willister

    willister Well-Known Member

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    I noticed this about a month ago. April it was still pretty hot. Interestingly, my focus is on the North/North East/Inner North East and that's still selling like hot cakes.

    Upper end has generally been dead - GW is struggling to sell. Markets within markets.
     
  2. highlighter

    highlighter Well-Known Member

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    Love it. Housing markets crash mostly on vibe. Once you've got a bubble, where fundamentals aren't supporting prices and manic sentiment alone is pushing them up, the whole market becomes very vulnerable. You don't need an "external shock" or joblessness or any of that, that all comes after. The pin that bursts bubbles is negativity.

    Looking back that was the strongest sign in Ireland. In 2006 attitudes towards real estate just shifted, like all the air was sucked out of the room. Suddenly, I'm not even sure when it happened, everyone agreed prices had peaked or were about to peak. Prices were already struggling in some counties, so maybe it was that. Maybe prices just reached a point where no one was willing to put up with it anymore ("tell em they're dreaming"). A lot of people blamed the media for unleashing a panic, with what seemed like an endless flood of bubble panic stories, where only a year ago the media were still denying there was a bubble.

    Either way it seemed like a dark cloud descended on attitudes to buying very quickly. From that point, it was over (not that good investors didn't continue to do well, the people who lose out in bubbles tend to be those recent no-idea-what-they're-doing investors in over their heads). Prices treaded water for a year or two then sank like a rock. For investors, if we're in this stage, it's vital not to panic because unless you're holding garbage assets, the bounceback is usually pretty quick (few investors I know actually made a loss in the end, though one friend was sort of bailed out by his mum. Most did pretty well).
     
    Last edited: 19th Jun, 2017
  3. zed_kid

    zed_kid Well-Known Member

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    Can concur this with firsthand experience. Went to auction in Essendon. Very nice art deco home, in very ‘original’ condition. Was on the market at $950k and sold for $1.195m auction went for about 40 minutes, it was exhausting.

    A few got passed in the Brunswicks, not exactly sure what’s going on but overall stats confirm a slow down.
     
  4. willister

    willister Well-Known Member

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    Probably a result of a "catch up" imho. The preceeding "bust" theories never materialised because there were still cheap suburbs e.g. West and North. Nowadays, even those are expensive the only things cheap are where you can see vacant land and a fair distance from the CBD. Stricter banking policies now in place will cool/slightly reduce growth, if a population decrease or ceiling is in place, it will surely bust growth.
     
  5. JK200SX

    JK200SX Well-Known Member

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    Even though the number of people at auctions is still significantly high, I've noticed more properties either passed in, 2 bidders or less, and much more vendor bids. I was bidding on one this weekend, and as soon as it passed my second/stretched reserve, I congratulated the other bidder when he cast his bid on the purchase of his property:)
     
  6. MTR

    MTR Well-Known Member

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    Not keeping close tabs on Melb at the moment, but from what I can see is the out suburbs are moving, or have been moving as its affordable.

    When markets tanks all markets are effected regardless of what people believe, just have to look at the past.

    I think though you do not want to be doing land and house packages when markets tank, as this really gets hammered badly due to same product and oversupply.

    Time will tell, interesting times over the next 6 months for Syd and Melb.

    What will stop the boom, affordability, interest rates rises, finance tightening if you can not get loans you can not buy that simple

    MTR:)
     
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  7. melbournian

    melbournian Well-Known Member

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    HIgh end markets the balwyns, glen Waverley, brunswicks and essendons they are high end milions in the market. the average FHB will not be able to attain. Though overall harder to get loans etc but FHB still need to live. Where it is highly investor driven would be the concern

    I was caught in the H&L 3 years ago, oversupply and no ppl lining up to buy. I should take a photo for you to see now (there are long queues there now in some estates). When there were none before.

    I'm through buying H&L and glad I offloaded one for a good price - I'm just watching but I think as another poster mentioned a lot of the H&L are driven by FHB and certain demographics. Either way they need to live and 1st July no stamp duties - 2 income family with FHB status should be easily afford a 300-400K home (as it will be cheaper than renting) unless their earnings are that low and with kids and one partner only working. Also indian demographics (if I take a page from my tenants) - 2-3 jobs per day.

    Melb is expected to be 8mil by 2051 - but I could be wrong - and there could be a massive correction post 1st July.

    upload_2017-6-19_14-39-17.png
     
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  8. MTR

    MTR Well-Known Member

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    Wow 8M, I better jump in again, next crash cycle;)
     
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  9. G-Dubz

    G-Dubz Active Member

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    Will be interesting to see what the clearance rates are for the next few weeks, if they drop below 70% maybe could be the sign of something.

    Otherwise too early to tell.

    My mate sold a house in bayside over the weekend, went fine but I think market there has peaked. Can't expect another 50% in premium suburbs can we.
     
  10. Kangabanga

    Kangabanga Well-Known Member

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    I'm calling a correction, massive or not will depend on whether or not RBA drops rates to zero in time.

    The main construction Cycle which mainly carried the Eastern states economies has peaked in nsw and Vic and on a downtrend now. Which means increasing unemployment soon.

    Infrastructure boost is unlikely to start in time this year to support things.
     
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  11. craigc

    craigc Well-Known Member

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    Clearance rate this week 72% (per re), very interesting to see next two - three weeks to see where clearance % goes with FHB changes from July 1.
     
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  12. korando1234

    korando1234 Well-Known Member

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    Low volumes.. but looks to be still chugging along.. bit slower
     
  13. Bayview

    Bayview Well-Known Member

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    Don't forget; it is also now winter...traditionally not a lot of activity...most of the properties - especially more in demand premium properties - are back on the market in Spring.

    I suggest wait until after about Melb Cup weekend to make an assessment.
     
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