Panic Setting in Sydney

It looks like history is repeating itself in Sydney...the panic is starting to set in...the last time this happened was in 2003-2004

The signs are:

1. Record prices for homes being paid
2. Consistent falling over of OTP purchases
3. People complaining about not being able to afford houses....newspapers are reporting this ad nauseam
4. Everyone is talking about property being the silver bullet to wealth...
5. Banks are starting to tighten critieria for loans significantly.
6. People on PC (last time it was SS) are getting very nervous and touch about any talk of correction..a human reaction...but the correction is inevitable.

The last time I saw this...within 24-36 months...the market changed significantly...and prices went backwards before settling.

So this time will it be different...me thinks not.....

Lets keep the discussion unemotional....it will be good discussion point...for many to debate.

 

The more panic we create the more panic there will be.
Panic is the key ingredient in 'self fulfilling prophecies'.

 

I'm a big believer in cycles and it's never different this time round. in a few years time when we're looking back at what happened in 2017/18 was history repeating itself....again.

 

Correct...that is already happening with newspapers as bad news sells papers.

One needs to rationally work through what is going on...it is cyclical and human behaviour can be predictable when under stress. This is what I have seen in other markets...blind freddy could seen this one coming..but still a lot of people are in denial....

I have been accused of not pinpointing the exact time that market would pop...I have stated in previous posts sometime in 2018/2019 in Sydney...will see if that pans out.....

Silver lining is Brissie/GC/Sunshine Coast/Newcastle/CC/Outer Melbourne will now move to their respective levels as a result as money flows from Sydney to elsewhere...

 

Already seeing the flow on coming into the Sunshine Coast.

 

Prices still cheap in the Druitt.

Come and get 'em before the bogans snap out of it and realise they are "living" on hills of gold!

No, not fools gold.

 

Not worried about places like the Druie....but fools paying $1.2m plus for Blacktown, Seven Hills, Toongabbie, Wentworthville, etc.....

 

I am interested to see examples of foolish purchases. As I know these areas very well and have seen much less "foolish purchases" than what I would call foolish elsewhere..

You would expecrt most "emotional buyers" with the super crazy prices elsewhere (and the news shows similar, although that could be due to bias).

 

One day i will except 1.2 mill for my quakers hill property lol it certainly has gone longer than expected, it has to flatten off at sometime but when? even the experts have been wrong calling peak at the end of 2015 :/

 

I will believe it when I see interest rates rise

 

I recall the western sydney market in 2008 just after GFC... people were creating a self fulfilling prophecy by "HAVE TO SELL BEFORE PRICES DROP" and flooding market... nobody much could get loans so they dumped prices to offload and in doing so caused their own price drop. I started buying up in 2010 when lenders were lending again and general market sentiment was I was "crazy buying in western sydney look at the price crash!"

 

50 to 75 basis points should do it.... bring it. I'm ready.

 

How we all wish we were buying in Western Syd then.. Hindsight is 20/20 after all!

 

Credibility deficit

 

I'd guess just 1 rate rise could have a major impact on sentiment.

I still think the government should be focusing more on improving supply, not artificially restricting demand. One big way to improve the situation long term is to dramatically increase the density allowances of housing! And I don't mean apartments, I mean a combination of apartments/townhouses/terrace homes.

 

That is exactly what is starting to happen...it is starting in the OTP......this contagion will spread a lot quicker than people think.

Now DaveM the good news is...good all Adelaide is looking positively cheap...some of that will come that way also....

Time will tell....a lot of immigrant families are driving the prices in these suburbs...a lot have not seen one cycle.....

 

Sash, is there any hard evidence that demonstrates price falls? Anecdotal evidence and theory just isn't going to cut it.

 

There is not hard evidence other than what I have seen in last cycles, auctions prices, changes in finance policies, and fallover of OTP apartments.

If this of sort of stuff could be measured then everyone would be rich....the smart players have already got out of the Sydney market and are elsewhere....usually the mugs get in about now.

I guess experience is the best teacher..and unless you see 2-3 cycles...you won't see it...

 

you remind me of a broken clock young sash

 

Yep...a broken old one at that.....I know a dinosaur in my time....people said that when I said the Sydney would have the mother of all booms also....