Panic Setting in Sydney

Discussion in 'Property Market Economics' started by sash, 13th Mar, 2017.

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  1. standtall

    standtall Well-Known Member

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    On the contrary, suburbs like Beecroft and Carlingford were on banks' risky suburbs lists at the end of last year. The reason is that most people in Kellyville/The Ponds bought well below their current million dollar prices while 50 years old unrenovated houses (most under heavy powerlines) got sold in carlingford for as high as $2 million in the great school catchment wars of year 2017 entry.
     
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  2. sash

    sash Well-Known Member

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    Nope more value on the fire sales on newer boutique units (30-50 units) blocks where people can't settle on or have to sell in the inner city. Rentals there will rebound quickly.

    Though the Hills and SW will have their fire sales also...but rents maybe an issue
     
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  3. RedHat

    RedHat Well-Known Member

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    Well I have a different take on this.

    Lets say even if the prices go down by 10%, there are lot people sitting on the fence including me who will latch on to these properties.This will again create a strong demand resulting in upping the prices."Property talk" is favourite during lunch with my ccolleagues and most of them late 30s and early 40s say that they will buy even if the prices go down by 5%, just waiting for market to stagnate or minor correction.Most of my Indian colleagues are double income 200K+, even if the rates rise to say 5-6% they would still be able to service it easily; and they are buying..see all those H&L packages in Schofields,Riverstone,Marsden Park, Glenfield etc, most of these are PPOR purchases.
    Also, not many have the financial acumen to invest in shares or other classes,buoyed by the latest property boom in SYd & Mel where prices jumped by 30-50%, general perception is that property investment is very safe bet - "fill and forget".

    Also, govt's big cash cows - selling permanent residency and real estate,they generate just too much revenue so govt wont act like tinker bell and make much changes to it.

    Time will tell...
     
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  4. icic

    icic Well-Known Member

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    Back in 2005-2007 after the peak of previous cycle, places like Glenfield Hoxton park, Preston and other suburbs other west dropped as much as 20%-30% from it's peak in 2003 so I will not be surprise it does that again. I know because we live up that way and my parents have properties there so they experienced the gain and the subsequent pain after the boom. bear in mind its all good for now.
     
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  5. sash

    sash Well-Known Member

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    Yep...exactly what happened...in 2003....people have very short memories.
     
  6. dabbler

    dabbler Well-Known Member

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    It is interesting to see peoples reasons for one thing or another, it is hard to deny usual cycle type events though.

    I really can't see how it cannot come off as usual and maybe more due to debt the amount of growth, it also seems a fantasy that opens will always be busy & new places will just continue to rise in price and uptake.

    We do not have much to keep us chugging along, interest rates are not at the levels they are because everything is rosy.

    I dunno, I do not like to be doom and gloom pessimist, but I can see downsides to property & like to be realistic

    PS the people with money who will jump in and buy at 5% off & 10% off just help the landing to soften at the start, it won't be a mining style like a tap, on or off.
     
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  7. ej89

    ej89 Well-Known Member

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    you're not worried about the $1200/qtr strata they all have?
     
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  8. scoobie27

    scoobie27 Active Member

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    I totally agree which is why I think this time it really is different. This boom will not end and prices fall like in previous cycle. Most here are expecting the same pattern of boom and bust to apply, just like previous cycles..... But not this time. This time it really will be different due to foreign players. The game has changed
     
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  9. wombat777

    wombat777 Well-Known Member

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    I think I agree. The demographics of outer suburbs have changed significantly. I've lived in the Hills District since 2002 and watched the change. It is less bogan-central than it was. That and the increased serviceability tests, postcode-based LVR limits in the last 2 years will provide a level of protection. Of course with falling demand if rates significantly rise there will be price drops. A 10% drop in median is a correction and not a crash.

    There will be cases of mortgage defaults and the media will focus on individual cases. It sells papers and provides click-bait.
     
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  10. WattleIdo

    WattleIdo midas touch

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    Agree too. The population of Australia and especially Sydney and Melbourne has changed a lot. Of course we will see some kind of slowdown, even loss of capital, but it won't be a 'panic' - not just yet, anyway. That doesn't mean I would buy in now but I don't think there'll be whole suburbs of regret.
    Even in the west and southwest.
    And those areas were not devastated by the GFC at all. A lot of fhb's bought in during 2010. It was after 2003 that there were evictions and firesales. That's 14 years ago. Banks have toughened up on the getting in and softened up on the getting out since then. Kids grow up, get educated, get good jobs and buy back into their own area with family support. My bet is that these areas are now the most bouyant!
    The west and now possibly the southwest has gone through a chemical reaction different times, grown-up people - morphing.
    There may be problem pockets if there is job loss at some time but significant job loss seems to happen at middle management level and upwards these days. I would be more worried about people who have over -invested in multiple non-performers.
    However, I hope I get an opportunity to buy in again.
     
    Last edited: 29th Apr, 2017
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  11. Gonx

    Gonx Well-Known Member

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    I doubt anyone needs to worry for the next year or two or at least until interest rates go up a few points and that would be at least 2 years away I would say before rates climb enough to make much impact. But once they do go up a few times then I would be a little nervous if I had property in Sydney. I would be looking out of Sydney soon, look at places like Newcastle and Central Coast near beaches and where growth is nearly guaranteed as these places still have many years of growth ahead in current cycles.
     
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  12. sash

    sash Well-Known Member

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    No target would be 600-800 pq.

    The rents on some will unlikely to drop as this a sought after areas and near 3 employment centres within 20 mins
     
  13. DaveyB

    DaveyB Well-Known Member

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    Nothing like some quality rose tinted glasses
     
  14. HUGH72

    HUGH72 Well-Known Member

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    This time it's different..I don't think so.
     
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  15. ollidrac nosaj

    ollidrac nosaj Well-Known Member

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    "Nothing has greater impact on your wealth & consumption than your choice of house and neighbourhood."

    Off topic but, Wattledo is that a quote from the book "Millionaire next door" ? It's a great quote, and excellent read.

    It also reminds me of someone I know personally who made it big from very humble beginnings. He moved into a rather well to do neighbourhood, and was greeted by his new neighbours. They requested he considered purchasing a new car that was more suited to his new community! (he drove an early Ford ltd, that they considered loud and unbecoming)
     
    Last edited: 29th Apr, 2017
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  16. RetireRich101

    RetireRich101 Well-Known Member

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    Blacktown houses fell 10-15% during the last correction (over a 2-3 year period 2005-2007) period. Houses were 350k became low 300k.

    10 years on.... those houses are now 650k

    Will Blacktown do the same this cycle? your guess is good as mine.
     
  17. Pentanol

    Pentanol Well-Known Member

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    Yep can confirm that a lot of the enquiries I get are from Indians for the projects I sell in Riverstone, Kellyville, Schofields and Marsden Park. All H+L packages I was selling in Kellyville between 900k-1.3m sold out like hot cakes and now only have apartments there starting from around 600k, Riverstone H+L was given five lots at 659k around Garfield Rd East (by the station) which are all gone too, had 20 townhouses in Marsden Park only two weeks ago... now only 8 left. Mostly all Indians but had some middle eastern people too!
     
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  18. dabbler

    dabbler Well-Known Member

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    You did see the govt and banks and regulators making it much harder for OS resi investors, right ?
     
  19. ej89

    ej89 Well-Known Member

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    If it's got an elevator in it and 30+ apartments there's no way strata is less than $800/qtr. Why not buy an older unit?
     
  20. sash

    sash Well-Known Member

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    No elevators.....also will look at older ones also.
     
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