New property boom looks imminent with a range of indicators pointing to price growth

Discussion in 'Property Market Economics' started by Peter2013, 30th Oct, 2019.

Join Australia's most dynamic and respected property investment community
Tags:
  1. Peter2013

    Peter2013 Well-Known Member

    Joined:
    24th Aug, 2019
    Posts:
    230
    Location:
    NSW
    Experts are saying this could be our biggest boom yet.

    New property boom looks imminent with a range of indicators pointing to price growth

    Since then, Ramon Mitchell, director of Gault & Co Property Advisory, said competition had strengthened among buyers, with bigger offers made and sales completed faster.

    “There’s been increased traffic through open house inspections and there seems to have been much higher conversion of these to registered bidders on auction days,” Mr Mitchell said.

    “You can see how this has played out in consistent improvement in auction clearance rates – including sales prior to auction.

    “There’s no doubt this is having an effect on value – they’re increasing across most of the markets we monitor – particularly in the capital cities.”
     
    Codie and John_BridgeToBricks like this.
  2. Foxdan

    Foxdan Well-Known Member

    Joined:
    22nd Jun, 2015
    Posts:
    450
    Location:
    Hills district, sydney
    Not going to happen.

    lending criteria and standards won’t allow a big boom

    anyone who says that doesn’t understand the lending environment or has a vested interest in selling something.

    100% people looking to purchase but with no extra borrowing capacity than before
     
  3. datto

    datto Well-Known Member

    Joined:
    23rd Jun, 2015
    Posts:
    5,631
    Location:
    Mt Druuiitt
    Two words : wage growth.

    Get some of these two words into the housing boom formula and Kapow! Qunckkk! Thawack! it'll be on again!
     
    mickyyyy and charttv like this.
  4. andrew_t

    andrew_t Well-Known Member

    Joined:
    25th Jun, 2015
    Posts:
    160
    Location:
    Sydney
    Short spurt, people buying to get in to their new home before Christmas
     
  5. marmot

    marmot Well-Known Member

    Joined:
    23rd Jan, 2018
    Posts:
    1,215
    Location:
    N.S.W , W.A
    I think people are going to very disappointed if they are hoping for any decent wage growth in the near future.
    The current labour market simply doesnt allow for workers to demand a pay rise and companies are more concerned about rewarding shareholders through dividends and buybacks.
    Wage growth is just collateral damage.as workers are unable to take any real action..
    Woolworths is the latest company caught out that seamed to struggle to pay its managers the correct rate..
     
  6. Peter2013

    Peter2013 Well-Known Member

    Joined:
    24th Aug, 2019
    Posts:
    230
    Location:
    NSW
    You guys have forgotten that interest rates have halved in just five months. This has significantly increased serviceability hence why house prices are so strong now and getting stronger each month.

    Interest rates are expected to be ZERO middle of next year, and then start going negative in 2021. Lots of room for continued growth.The RBA will ensure this.
     
    Ross 355, muller23, Khoed792 and 2 others like this.
  7. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

    Joined:
    14th Jun, 2015
    Posts:
    8,295
    Location:
    Gold Coast
    Mini boom

    Ta

    Rolf
     
    craigc, Druss, charttv and 4 others like this.
  8. John_BridgeToBricks

    John_BridgeToBricks Buyer's Agent Business Member

    Joined:
    25th May, 2018
    Posts:
    1,842
    Location:
    Sydney
    That would be ideal, but the uptick won't be fueled by incomes. It will be fueled by population growth and credit growth.

    My guess is therefore that the mini boom will be driven by relatively few buyer's/investors, and a general rise in incomes won't matter.

    I would also say that "average" wages are often not as meaningful in countries with high levels of immigration. There are many people for whom wages are increasing, but the averages blend lower due to high levels of immigration. Not a comment on immigration, just on how averages work.
     
    Erica and datto like this.
  9. marmot

    marmot Well-Known Member

    Joined:
    23rd Jan, 2018
    Posts:
    1,215
    Location:
    N.S.W , W.A
    You mean like replicate what happened in W.A when house prices were elevated and everyone assumed you had a high paid mining job or worked in the big construction jobs in the north of the state.
    Then one day population growth stops and the wheels start to fall off.
    You end up with all these people stuck with elevated house prices and trying to sell it to people only earning 50-60k a year.
     
  10. fols

    fols Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    720
    Location:
    Sydney
    It's a correction of the over- correction. That is all.
     
    skater, Traveller99, Kapot and 5 others like this.
  11. Car tart

    Car tart Well-Known Member

    Joined:
    16th Sep, 2018
    Posts:
    832
    Location:
    Sydney-Melbourne
    I believe that lack of wage growth has more to do with rental values not increasing. The recent price growth is due to lack of stock as vendors waited to see how the market went. House values are supply and demand.
     
    mickyyyy and Foxdan like this.
  12. John_BridgeToBricks

    John_BridgeToBricks Buyer's Agent Business Member

    Joined:
    25th May, 2018
    Posts:
    1,842
    Location:
    Sydney
    True, but there would need to be a cessation of population growth for that to happen. I can't see that happening.
     
  13. Lizzie

    Lizzie Well-Known Member

    Joined:
    9th Jul, 2015
    Posts:
    8,926
    Location:
    Planet A
    But - the banks passed on barely half of that. So, if you're really lucky, you may have received at 0.5% interest rate cut.

    On a $700,000 loan, that equates to $67/wk .. don't think it's going to make anyone rush out and buy. Especially since basics like electricity, food and water have all gone up

    Think you'll find, those who are buying were wanting to buy during the initial boom but missed out ... a pendulum stabilising mini boom at best
     
  14. Lindsay_W

    Lindsay_W Well-Known Member

    Joined:
    1st Jul, 2015
    Posts:
    3,623
    Location:
    QLD/Australia Wide
    Banks serviceability rates haven't halved though, so there hasn't been a significant increase in serviceability, some yes, significant no.
     
    Last edited: 31st Oct, 2019
    JohnPropChat and Kapot like this.
  15. Trainee

    Trainee Well-Known Member

    Joined:
    24th May, 2017
    Posts:
    7,926
    Location:
    Australia
    Dont see a boom this fast. That said, the recovery is also a lot faster than expected. Looking longer term though cant see how house prices can fall if population continues to grow.
     
  16. cacioepepe

    cacioepepe Member

    Joined:
    13th Oct, 2019
    Posts:
    7
    Location:
    Sydney
  17. Peter2013

    Peter2013 Well-Known Member

    Joined:
    24th Aug, 2019
    Posts:
    230
    Location:
    NSW
    Maybe landlords should all hike rents $50 a week, then we will see some wage growth!
     
  18. mickyyyy

    mickyyyy Well-Known Member

    Joined:
    26th Jan, 2016
    Posts:
    866
    Location:
    Sydney
    Say what? I'm abit confused mate...
     
  19. Shogun

    Shogun Well-Known Member

    Joined:
    26th May, 2018
    Posts:
    2,125
    Location:
    Perth
    You can't squeeze blood from a stone.

    People can only afford to pay so much in rent. If wages don't increase they can't pay more for rent and still live
     
    mickyyyy likes this.
  20. mickyyyy

    mickyyyy Well-Known Member

    Joined:
    26th Jan, 2016
    Posts:
    866
    Location:
    Sydney
    Sorry I mis-read it! As interest rates drop, less supply the east coast will be in rental crisis at current trends
     

PFA Property Expo is designed in a way that visitors can gather maximum real estate knowledge with added benefits. Different speakers will be presenting on different topics as where to buy, when to buy in this market...