Panic Setting in Sydney

It's been nicely renovated, but can't hide the fact that it's pretty 'cosy'

 

I still maintain that we will see an orderly slow down in Syd and Mel. Sure, there'll be forced sales here and there due to individual circumstances, but by and large, I'm betting on a drop < 10% across the board.

An interesting example - my parents bought a newish 4x2 in Sydney's West in 1987 for $165K. That was just before the market peaked in 1989 and subsequently 'crashed'.

They then sold the property in 1994 - a very quiet time in Sydney, for $220K, which translates to 4.2% CGR (since '87).

That property recently changed hands in 2016 for $855K. Sounds like bubble territory but the CGR translates to only 5.8% pa (since '94). It's compounding that creates the impression that we've experienced exponential growth.

As far as I know, the property hadn't been renovated since it was first built. It's a great example of an average property in an average suburb without a full blown reno or extension to skew the numbers.

During this timeline, we've had interest rates going ballistic, the 'recession we had to have', the Asian fin crisis, SARS, 9/11, the intro of GST, the tech crash, the GFC and now a credit squeeze (which isn't the first time we've had one).

My point is: whilst we've overshot the runway, and modest falls are on the cards, I don't see blood on the streets.

 

Another doom and gloom article on the "impending" property crash. Bear in mind, it is a Fairfax / SMH article, so I doubt it would carry too much weight, but it is an interesting read. Time to start looking into the cash cows.
'I am absolutely certain we are in a bubble in this property market'

 

Poor ol' Fairfax they get criticised for spruiking the market (Her's looking at you Domain) and criticised for doom and gloom as well.

 

For just one day, I'd love the AFR/SMH to not have an article about house prices. But hey, I get it, it gets the most clicks.

 

Yes, Panic is setting in Sydney...rental crisis that is.

We're so much focus on the capital growth/fall in this thread but neglect to discuss about the impact of Sydney vacancy and rental.

I have a work colleague applied for rent in the North Shore. She submit $10 higher than the asking...confident she will get it, but to found out there were multiple offers. Agent/Landlord counter offer of additional $20 and the place is hers. ( so total is now $30 above the asking).
We're seeing multiple offer for rental in this construction boom...imagine when developer and investor retracts in the next few years...

I personally was able to increase $10-20 every year in Sydney properties.

Here @petewargent puts this into perspective

Is Sydney heading for a rental crisis?

 

Not sure about rental crisis, but Pete has run headlong into a fashion crisis!

 

In some areas yes....in some areas no...so area dependent.

Might be an idea to provide some evidence on this......

 

My rental in Sydney West the main house was increased by $10, the granny flat increased by $10...

 

I have just increased the rent @ Liverpool by $20 last month. No complain by tenant!

 

Just put the rent up by $10 and aiming for another $20 asap. Need to catch up.

 

LOL - I just put the rent up as well on 5 of my Sydney properties as well. $10 each. Extra $50 a week hahaha

 

Great...I might have to follow...after all.....

 

No Panic for me... enjoying the ride!

 

In a space of 30min, 3 people confirmed they increased their Sydney rental... no sure what hard we need to clarify this position

Let's take a look at some history rental data for the last 10 years.
The rental increased the most in 2007-2010.
Most Sydney suburbs saw an increase of $100 in the 3 years. That is approx 40% increase in 3 years. Some called this the rental boom.

Will we see a rental boom in the next 3 years?
I don't know and I am not the figjam here....but at least we're in a good position to increase our Sydney rental. Fixing 6 months rather than 12 months would be a wise move in the next few years.



Similar stories in Liverpool



And Parramatta...


and Hornsby

 

We are renting in the inner eastern suburbs and the landlord didn't increase the rent while we were in the property. They are now increasing it by $20 but don't seem to be getting a huge amount of interest. We are leaving next week and I just found out that a friend of a colleague is also leaving Sydney this month. In a few years, Sydney is going to be a city of old people. Might be time to start investing in retirement villages

 

10$ each last month for granny and house in st mary's

about as much panic as a slow motion druey drop

also changed a few loans to P&I to, no IO cliff here..

have a great day

 

Interesting. My partner works in real estate on the northern beaches and she said there is a massive oversupply at the moment...

 

Parramatta stat is interesting. Maybe rental demands of units are different. We can't increase our unit rent (western Sydney), warned about oversupply and yes the supply is increasing in the area

 

That's my perception as well atm ie supply > demand