Panic Setting in Sydney

We bought a 2/1/1 unit in a 1960s red brick block of 6 in Rosebery in 2012 for 450k,
a few weeks ago the unit on the top floor (identical to ours) sold at auction for 780k.
The buyers told us it's an investment...you can maybe get $500-$520 rent p.w...
Talk about NEGATIVE gearing...or maybe the buyer sold somewhere else you never know.

Btw, Westpac valued our unit at $600k a couple of months back, reflecting the conservative stance of lenders towards any apartments...

 

My last buy was in Brisbane in 2016. The ones purchased 2014 probably had average 8-10% per year growth. So about 24-30% growth for total 3 years I held them.
I quiet like the 8% per annum increase.
It takes 9 years to double, yes I know, but I am ok with this. In fact I prefer this steady growth, rather than Sydney growth in the last few years and now overshooting, that caught all experts mouth wide open.
So if it continues this 8% increase, I will double my money in 2023, or 6 years from now.
Can the apra data do more damage to Brisbane, me thinks smaller probability than other cities.
Can Brisbane have 3-4 years of 20% increase per annum, not sure.

 

That is a great result....unfortunately...someone got emotional and bought.....happened before in the last boom too....

The property last sold in 2004 for 470k....and it looks like they have spent some money on it...lets say about 20k....so add another 40k for in and out costs and it has costed the owner about 530k

So the profit is about 345k which represents a 80% gain...very impressive indeed. But is the result double of what was paid since the last boom (ended 2003)...so they waited 13 years to get 80% gain...which translates to 4.5% increase per annum.....

Context is very important.....so is the maths....

However if they worked on a cash on cash basis assuming a 10% deposit...it would 350% return over 13 years...much more impressive.

 

On a serious note, here's last 30 days media price progression (or rather decline).

 

Let's see what the budget brings and after that.....

 

Sydney ranked 10th best city in the world for quality of life

 

This post is making me panic about selling in Sydney in September! Must stop reading.

 

Medium house price figure over a month doesn't mean anything. That means there's less top end property being sold that month that's all.
I'm going to an auction for a 1bedder in Crows Nest this afternoon. Let's see how it goes

 

I have recently been to a couple of auctions in Sydney. Seemingly, investors have started to back off a bit. Most bidders are young families or recent migrants. Not sure if this is the sign of the end of the boom, as seasoned investors back off or even cash out, the young families who missed out in the last 3 years are trying to rush in... if so, I feel sad for those young families, parents would need to work with their ass off to pay down the massive debts while looking after their young kids at the same time. But you never know when it's a good time to buy... maybe it's worth it to hold a million dollars asset with minimal growth in the next 5 years... just thinking there is big opportunity cost there...

Question - to all 'mature' investors... do you think it would be a good time to buy apartments in Sydney in the next 18 - 24 months? Rental demand is still strong in Sydney and it will probably always be strong given it has the largest job market in the country. When those new apartments come to completion, there will be some re-sales for sure due to various reasons like investor cash up, settling problems with foreign buyers etc. if you can get a 5-6% yield from a bargain let's say, would you consider it?

 

definitely just make sure it is a bargain. oto and oeople whi cant afford tgeir houses will opportunities

 

Looks like the herd is really starting to panic.
Only 80% clearance in Sydney. Sky is falling. Everyone cash out asap and buy everywhere else I have!

Sydney, Melbourne property market fires back up as auction clearance rates surge

 

These numbers are still good..but I'd ask who is responsible for these numbers holding.
In tier 1 city markets around the world, less locals ( relying solely on local salary funds) are buying in their own markets ( because they are priced out). I wouldn't be surprised if the same is happening here in Sydney, and soon in Melbourne, and about 7-8 years out in Brisbane.
Nothing wrong per se with this..just the forces of globalisation, ease of transfer of trade and currency etc. This is the face of future competition in tier 1 and maybe some tier2 cities.

 

Right, that is just like UK property market in the past 10 years. The locals have been priced out, while oversea buyers have had property binge because of the low pound.

 

Yeah, and the danger then is someone like trump, brexit, Le pen etc comes along and tells the population they can reverse the situation.. And they gain power.

 

And unless you want every house in Sydney to be $3m+ in the not too distant future (how will your grandchildren be able to afford anything, that ain't a bad thing, as long they can delivery what they promise.

 

It aint overseas buyers causing 80% clearance. Its locals. But yes, i truly believe we shouldn't be selling our land to overseas investors unless its to provide a development which will bring more housing

 

One of the emails I got from the list agent of an apartment block... Apartment market has definitely started to turn... not so much for houses yet, or will it later this year? we will see. Interesting time ahead for the next 2 years...

Hi XXX,
Thanks for your enquiry.
This is XXX, the listing agent for above property XXX.
The price of this apartment XXX is just $598K, exactly the same price as how much it was in early 2016 when the owner bought it. No other similar apartment on the market is cheaper than this one. Really a rare opportunity.
Also, I have recently got another new listing in the same project, whose price is even about $10K lower. Similar one, price $588K. It’s not on the market yet, but I have attached some info of this property for you to compare. The ads for this new apartment will be on the market right on this Wednesday.
Estimated completion date for XXX — Early 2018
Estimated completion date for XXX — Late 2017 (As Building A is the first stage of this project, Building C is the second stage)
As apartment for lease in this area is very rare, and the perfect location of this property (right above train station), the estimated rent can be around $550 which is a very high rent return.

 

Listings for sale are back up to where they were at start of February, or up 2% since their low in April. Same story for number of properties for rent, up 8% since their low in early april and climbing.

Given the lack of growth in ABS workforce data, I would say that its all an early sign that population growth is now off the boil.

 

Yields more like 2-3% rather than 5-6%. Need to independently review rent estimates, not take the spruikers view of the world. High strata fees on the new builds as well, which reduces your net yield even further. Caveat Emptor.