NSW Opinions -Sydney

I didn't see a call for a 30% correction, I read a 30% correction in real terms. How much is 5 years of flat growth a correction in real terms? If you have a look at the last Sydney boom, first, the boom was huge. I saw live auctions and there were people nearly fainting the prices went so high. Then there was a decline in prices and some years of flat growth. In real terms, how big was the last correction? I reckon it was significant.

 

Yes. Flat growth is a fall in real terms. You would have to use the treasury standard to be more accurate. As if predicting the real estate market 10 years out is accurate...

 

Growth less than inflation for about four or five years is a drop in price in real terms. So what you are really saying is that the property market will drop in real terms for four or five years. I agree with this. I will be watching closely with a view to buy in before the next boom. I forgot to watch between the last boom and this boom but I know properties got affordable for me between then and now. I forgot to watch and look what happened!

 

It's going to be a bloodbath, I read it in the newspaper so it must be true

 

I dont think most of Sydney will have big falls. Maybe small and then flat for a long time. The economy and jobs are still going strong in Sydney and will be for a while, supporting pop growth and demand..
The areas that will get hit harder are the ones where fundamentals [ eg household income, pop growth etc] have not improved significantly, yet the prices have shot up and definitely improved significantly. I cant see how that is sustainable.

 

5 years of flat growth is not a correction. In real terms or non real terms. Am I on the twighlight zone? Geez

 

C

Cool story man

 

Could be, may be, who knows?? But you only know if you are selling...so are you selling?..

 

I went to 2 auctions in my suburb today. First one was a big house on large land (800sqm+). Very well renovated. Very slow auction, and I think there was 1 real buyer and another "bidder" (who may have been connected to the seller). Anyway, it fetched I think 2.1X mill after negotiations with the "highest bidder", who were a "white" family with 3 kids. I mentioned white because that's actually rare (I've never seen in the past few years!!) for the area.

In a hotter market with some Chinese buyers it may have fetched 2.3mill or so.

The other sale was a maybe 15 year old 4br townhouse. Not too much land (maybe 150sqm), but it was a peaceful location, good outlook. Not fancy by any means. Bid opened at 1.2mill and Sold for 1.308mill. Crazy as its just a townhouse. Cantonese Chinese speaker buyers with small baby.
That one had a legitimate competitor for it. (White lady). Still, that one had to be referred to the seller and the winning bidders bid against themselves at the very end, adding 3k to the bid. (Probably was not necessary, but who am I to interfere).

Then I went to an open. It was dead silent. Just me and the agent. Nice home but it didnt have street appeal as it was essentially below street level and you only really see the roof from the street. Anyway, I had a good opportunity to have a nice chat with the agent....

Anyway, we know Epping is really changing... and buy and keeping in a good location is a solid strategy... the agent told me of a lady who bought and sold houses in the past... the ones she sold would have been 3 mill each now, but instead she only has a townhouse in Carlingford. Fair enough, that might be worth 1 mill but she could have had at least an extra 6 mill if only she didnt sell the other 2!

 

I went to an auction today in Concord. Not a single bid, not even when the agent offered a present to whoever would place a bid. I think there will be some great bargains in Winter

 

Winter next year or did you mean summer?

 

Winter next year. I don't think too many vendors will be wanting to discount in the next few months, but eventually they will need to meet the market and the market is flattening right down as far as I can see.

 

Gockie, I have to agree w the above re the rarity of white families in this area. Also the Epping/Eastwood/Ryde area shot up too quickly in 2014/15 and there were at least 2 homes Passed in at Auction today in Denistone all pointing to over supply and unrealistic vendor expectations/missing the boat. I'd be keen to see clearance rates today, and probably the largest number of PI for years.

 

Went to one auction today in North Lidcombe for one side of a duplex. Looked good from the front but a bit run down inside, on 296sqm (nearly square block, 16-17m frontage) with almost no back yard. Four main bidders, two finally battling it out (both Asian). Went for $1.26m.

Lots of open houses in the area today. Haven't seen so many REA signs for them stuck around the place at one time.

This area has done well in this cycle though. A place a few doors down from us, with a knock-down quality house (from its outside appearance) on 626sqm, sold before auction a few weeks ago for $1.5m. It last sold in Jan 2009 for $555k!

Did go to one a few weeks ago on the south side (not as good as the north side) that didn't get a single bid, and the vendor bid was $1.3m. But that was a really old house on a triangular block of land, where the two narrow corners had been turned into rather amazing Japanese style gardens. They looked good, but a lot of work to keep them looking like that. Don't know if it sold later (can't see the place listed anywhere now).

GP

 

Time to get all the equity loans setup before the valuers get spooked. Once they start covering their asses with discounted future values it's hard to get a good valuation

 

Cool story bro'

 

Yeah, you're right. In a property cycle there is never a correction. People who have assets that increase in value at a rate lower than inflation aren't losing money at all.

 

But if you sell, there's a lot of fees plus CGT and stamp duty etc if you rebuy. So its not a terrible idea to sit through the downturn, if the properties are fundamentally sound, even if other markets are on the up. Because Sydney will boom again...

 

When did I say there is never a correction? And for the record genius, people who own assests that increase at a lower rate than inflation can quite possibly be making more than they are losing. It really depends on the cash flow on the said property. But you already know everything so I don't know why I am explaining that to you

 

Your a top bloke dude, we should grab a beer some time