Panic Setting in Sydney

He is talking about the new apartment city, where it is chocka with new (fairly new) builds.

 

He's gonna buy a penthouse and AirBNB it.... lol

 

$1200 strata is fine. If bought right strata will be covered by the rent and the next cycle will double the price easily

 

I purchased a 3br townhouse on the fringe of Sydney's inner west7km from cbd in 2008 for 445K and today it's worth 1mil, going by recent sales of the neighbours. Should I sell now!? This thread is freaking me out as I am relying on the townhouse to fund a new home. I'm new to investing (apart from the townhouse) but want to learn more.

 

Well, if were talking investors, rates already moved quite a bit & more coming this year, not 2 years out.

Would not touch the Central coast or Newcastle either IMO, too late, it will stop as well.

The time to be buying in all these spots was 10-13 IMO

Most of the clever cookies sold off some of the property they held to those that think it will just keep going, quite a few I can think of on this forum have actually done exactly this. We are not talking home owners or people upgrading, but there could be quite a few of those get into a bit of trouble if they have to sell.

If a lot of people who are new to investing and a lot of OTP get into trouble, it can bring everything down, it wont be down forever, it wont hurt those who bought in 2010 or earlier, but buying now increases the risk, most rational, pragmatic people should be able to reason that.

Of course, everyone can do as they wish, if you do things knowing the risks and have your eyes open, then, that is ok. Everyone has to weigh these things up themselves.

Human nature is to watch something, such as property prices climbing & then just jumping in so as to not miss out, but investing takes a bit more thought and nerve I think, it is like a slow stock market, you do have time to look, look at the past, look at the economy, listen to what the govt. and regulators and all involved are saying, diving in and ignoring certain things are done at own peril or risk.

This problem, is a very real, problem, let's hope many of you optimists are right, and we come out with a nice soft landing so it does not cause a wave that collapses everything. Keep in mind, the regulations are not area specific.

For me, a big red flag is the RBA and regulators etc having a "argghhhh crap" moment, at something they petty much created mind you.

 

Why would you sell ? if you lose money we must be in a nuclear war !

The markets usually cool off and pull back a bit then go flat for some time, the flat period may be a while.

What I would do though, is plan for roughly when you would be selling, then watch the market for the cycle and peaks, you do not want to sell in a tough if you do not have too, better when it has had a period of growth that meets when you plan to sell anyway.

If it is putting money in your pocket, which it should be, then you can just hold till it suits you to sell.

Look at the US markets, crashed by 40-50% in areas & a matter of years later it has made it up, so if it does drop, it wont stay down forever.

 

Hilarious!
Correctamundo - Millionairre next door.

 

i meant general interest rates, not investors rates. I do agree with most of what you say although I don't think Newcastle is anywhere near peaking yet, it is just taking off with many infrastructure and projects just getting started there. I do not have enough recent experience in CC coast to make detailed reports but I would have thought it would still have a lot of room to grow considering many Sydney people are seriously looking further out now.

 

I think your not thinking of how many places have been bought as investment, if that drops off, demand and prices drop off & people start selling, along with drops in what people can borrow etc & if Sydney is dropping.....I think the close regions will catch a cold too.

Rates are on the up for owners too & after the media lose interest in all the records and rising, the banks will start to hit owners more too, it will be dearer for investors to try and bring down investor volume, but it won't all be going just to investors.

We will go through the same thing that happens all the time, people will be less interested in getting in, it will go flat......it is amazing, but that is what happens.

I suppose I am saying human nature not likely to change, the big difference this time is the amount of communication, facebook etc & a weak government looking to try and please everyone to stay afloat and same for oppositions. It has been like a mega phone, but is not really anything new.

Now, if we were on the start of the Mining boom now, or the economy was starting to do well, maybe I would think different.....anyways, I am not buying in Sydney or close by. I decided that a while ago.

 

Yes it will assist in reducing foreign money but the effect will be minor. There just too much overseas money coming in, and people will find ways to get around govt efforts to stymie the flow. Its changing the macro picture. Don't get me wrong, I totally hate how foreign money is playing a part in pushing up our prices, but I can't help feeling that it is playing a significant role in shaping a new investment or property landscape. In the overall scheme of things our market is quite small. There's so much money around it's flowing Canada UK etc and not just here. So i think "this time it really is different"

Only rates around 7% or more may cause a correction. All the other efforts are just window dressing. It will have a small effect but won't do much

 

How many properties does your local politician own?

 

How many properties does your local politician own?

 

Barry O'Sulliivan 22 properties
Many of them Commercial.

 

.....and there is the million dollar question and why no major fall.....unless there is major pain and people question if buying investment is a good idea (and not just.....yeh it topped out but will be back) then there wont be a major exodus and people just wasting their time online talking about stuff like this.

 

Question is what will cause the pain?

I see you are in NY......have you been to Sydney lately?

 

FYI - as of today, Sydney median has moved down by 0.97% from peak point a few weeks ago. In other words, an average house has lost around $10,000 in market value.

Furthermore, daily indices continue to decline after widely reported Sydney prices softening since March.

Source: Corelogic daily indices

 

Looking at the same data here for last 1 year, wouldn't Perth be a much bigger concern by the same logic? Or even Brisbane and Adelaide as both cities have almost no growth.

 

Access equity? Can you do this

 

Perth is a very big concern and the fall continues month after month. I think it's getting into a very dangerous territory.

Brisbane & Adelaide are also a concern as growth has been much lower than Sydney/Melbourne. I think we will have a much better idea of national market by the close of May.

As per today's update (4th may) Sydney has slipped another half a percentage and decline seems much quicker than anybody would have liked. There would be a lot of nervousness around Sydney seeming to have entered a free fall of a sort here.

Melbourne has also started to decline after slowing down its growth.

Brisbane is slowly but consistently gaining momentum here but too early to say much.

My view is that banks will be freightened by this data (too much riding on Sydney and Melbourne) and either respond with a small rate cut this week to restore confidence or a hasty rate increase to try and cut future losses.

Exciting times ahead!!

 

Sash, Yep get back to Sydney every 2nd year

and yep, have a couple of IP's in Sydney so am very very aware on where the market is at.