Property Boom is Over, what's in store for 2016

Over $1M+ properties this market already crashed in 2007 and not recovered yet, bargains to be had for years here.

 

Fair enough . I have only tracked the Perth market since 2012 .

However in saying that the market crashed in 2007, i was still seeing a great amount of activity in the beachside lots in the newer suburbs until last year. These are areas where purchasers have been paying 1000-1200 dollars per square metre of land.

 

The Perth market crashed in late 2006 around December.

All markets were impacted and we experienced a minimum of at least 20% drops, some areas more.?

Blue chip high end $1M+ has not recovered, plenty of evidence of this in areas such as Floreat, Cottesloe etc.

In late 2013-2014 Perth had a mini boom this was driven by FHB in the sub $500K range then continued to around $700K.

This was also driven by developers buying development sites which pushed the prices of land up significantly in a short time frame.

There was also an apartment frenzy, many buying OTP, and this market also rose nicely as there was not enough stock to go around and pent up demand by investors and FHB.

Late 2014 Perth market went cold, rents and price of housing/units etc started to fall, FHB Government Grant was cut back significantly and suddenly we have an oversupply of houses/units and this is why our market is falling... too much stock.

When the mini boom occurred we got down to a round 7500 properties on the market, a balanced market apparently is 12,000, however I think last time I checked we were at 14,000 oversupply, perhaps more now?? dont know??

 

Cannot see any improvement in the $1m market for sometime to come. My aim is to keep some cash reserves to buy a new PPOR when this market eventually hits rock bottom (not in the next one year) and buy a nice beach side property. As I am a northerner would ideally like to buy something in Mindarie.

 

Ugly numbers for sure, thanks for sharing.
It will have to turn around at some point.

 

This a good report - with more logical rationales. I've been looking at these 3 cities, brisbane (qld), melbourne and sydney. Even made trips to gold coast, logan, brisbane, mt druitt to the get a feel and see a few auctions. i am actually keen to buy in brisbane just the numbers dun stack up for me for the ones i have looked at, looking for a dual occupancy. I realized brisbane to build is quite expensive compared to melbourne or sydney due to the flood regs and some of the rates with insurance are even more exp than a melbourne apartment with owners corp with pool and gym etc. But still keeping the option open to any good buys as it is still much much cheaper to buy in brisbane than in sydney or melbourne.

Back in the sommersoft days, you get a proper posting on pros and cons. Now it is so one sided. if for example in the brisbane posts it is like

1. Airasia increases flights to QLD (verdict boom inevitable)
2. Oil prices goes up (verdict boom inevitable)
   
3. Less tenants available as more tenants moving in and buying up following sydney footsteps (verdict boom inevitable)
4. Logan is the next mt druitt( verdict boom inevitable) when the demographics in mt druitt is so much different to logan. The fish market in Mt Druitt is so vibrant when i went there than it even rivals footscray in melbourne which is million dollar suburb.
5. NAB release some random report on lending in brisbane (verdict boom inevitable)
   
6. Some unknown source picking QLD as the top foreign investment capital outdoing singapore, vancouver, tokyo etc(verdict boom inevitable)

With views like these, it is so unbalanced - need some proper pros and cons like back in the old days. i think melbourne and sydney will still outdo brisbane but brisbane due to affordablity still tops for getting into the market compared to paying 500kish to a million + in melbourne and sydney. The only issue i see that is the availability of jobs for people to move.

 

agree with your comments, it's a shame, unfortunately that is what happens when a forum goes to commercial operation, not the same quality. I would be look at areas of demand and how long it is taking to sell and basically talk to agents on the ground, and many, this is the only information I would be relying on.

Becareful with dual occupancy in Brisbane/QLD it's not Sydney market, different demographics, could take much longer to rent out, what you thought was cash flow positive turns into a negatively geared property. I would not touch dual in QLD, one massive mine field IMO

Also another consideration is own private set up for each tenant, don't under estimate the importance of this, otherwise it will take much longer to lease.


MTR

 

It's true, but there are a few of those one sided hype threads around, not just Brisbane. Some even have hype in the title! (not a fan)
Jobs have definitely picked up in Brisbane, and I will be moving back there ahead of original conservative timeline.

 

Yes the quality of discussions have dropped. Most larger and experienced landlords have also stopped coming. Makes this forum a better gauge of boom/bust scenarios though.

 

It would be great to read an unbiased thread, unfortunately members with their own agenda adds no value....
Then again there is always the Nathan B bashing thread for some light entertainment, LOL

 

I am a Perth investor who is active in the market right now. At a guess I would say prices may stabilise late this year/early next year. However, I believe the recovery will be long a slow. Put it this way, if you wait 12 months to buy, I don't think you will be missing out on any significant capital growth. That said, it is always good to keep an eye on the market. Sydney dropped off my radar and next I knew, prices had doubled.

I'm not sure Perth has a lot more to drop in price, at least in some areas. The product I am tracking doesn't seem to have a lot of room left to drop significantly further. I still don't see prices stabilising in the short term. Just gradual further drops or stagnant prices for up to another 12 months. Of course static prices for 12 months is a drop in real terms. Followed by a long a very slow recovery.

 

Yes, we definitely have a lot more pumping going on in this forum than the old Somersoft.
Perhaps it Has gained more visibility? I think perhaps some have realised with the new forum, it is a new beginning and an opportunity to go pump a certain market/investment product. It bears no fruits on the said market, but might impact a few novice investors here and there I guess? What it does though is that it drives the quality of posts through the floor and even encourages more of the same by other members. I don't know whether this was preventable? For sure the fact that it is a commercial forum means a lot more people have a vested interest in pushing this or that.
A bit of a shame but the smart investors will navigate the BS.

 

That's true but opinions are based on one's own experiences and therefore will always vary.
Unless we just stick to stats everything else is subjective and often influenced by what has occurred in the last 5 minutes rather than looking at the bigger picture.

From memory we had some big Gladstone hype threads on SS amongst numerous others.

I don't mind if people hype anything provided they provide reasons why. Then anyone can consider their opinions and will form a similar one if these idea's appears valid.

SS was difficult to post on mobile devices so there was considerably less 'chat ', whether that is a good thing is debatable.

Surely we don't need to provide a disclaimer that comments are not advice. Everyone's investing processes need to be robust no matter what any posts say, or don't.

 

Yeah, you'll probably remember I was called a bit of a bear on Brisbane for trying to be realistic with the fundamentals - hype won out!
But that thread does move pretty quick at times too (am a fan, hehe)

 

Well there are surely a lot more buyers agents now than before. Not that there is anything wrong with it but there is a vested interest in it. I get some PMs on and off on people who ask about melbourne and i say it like it is. One even asked me of my recent purchase which i did and i said this place is rezoned yet no one knows abt it yet even the vendor opposite me who is looking for off market listing to sell. to the credit, the person did the due diligence and actually bought the place that was not even in the s32 listed as rezoned and i did not get any fee or any interest purely recognizing a gap and helping another investor out. This may not be the same for the novice or first time investor might get caught up with the wrong hype or ulterior interests to sell a certain product or service.

No one is saying don't hype but quality opinions with merits like i would say the sashes, MTRs. Back in the day nathan birch used to pitch his ideas here although different but it had a lot of merits on why he did what he did. i remember he also posed questions on loans more than a million and best ways moving forward which gathered a lot of quality response from the brokers etc. There was also talk on dazz with his commercial shopping center etc and why he did what he did.

Now it is more on the lines of seeing one article and saying AUD is going up - (boom inevitable), AUD is going down (boom inevitable) and you start to wonder if this is the sort of discussions you want to get into.

 

im calling it: an inevitable boom in all forms of real estate...

 

Hey MTR- can you clarify what you mean by being careful about dual occupancy? At risk of being accused of always mentioning the GC, if you are talking about duplexes, I must say my experiences with duplexes has been great. Great yield (much better than a stand alone house would get), and you still get the ownership of the land and the consequent capital gain - in a nutshell its more efficient use of the structure on the land you own. I've never had any issues at all with dual occupancy (if this is what you are referring to). Or am I missing something?

 

I am talking about house and g/flat at rear, not 2 separate titles or house, two storey set up, 2 separate leases or shared

 

These sorts of articles always seem to say, "Price growth is going to moderate, there's no risk of a downturn. Carry on." In short, a Goldilocks scenario, where growth is neither too hot nor too cold.

You're never going to hear Michael Yardney say something like, "The Sydney market is utterly bonkers. Sell up, take your money, and run!"

Perhaps a more useful article would have been to highlight the possible risks and upsides to the market. For example, the slowdown in China, Brexit, possible changes to negative gearing, interest rate cuts, and so forth.

 

And BCC no likey.
Heard they're pretty strict on it lately.