Property could fall 30%- LOL

Sorry, but that's a bit of a silly argument when you dive into it.

If we were to just ignore the virus and opened everything back up, did not practice social distancing, nor wore any type of PPE, close to 100% of the population would get it. Let's just assume that 20 million people in Australia would catch it. With a fatality rate of at least 5% (I realise we're much lower than that now, but that sort of infection rate would essentially mean zero health care could be provided), this would mean at least 1 million deaths in Australia.

Has the Covid lockdown been bad for the mental health of some? Definitely. But deaths wouldn't even be 1% of the deaths that we would have if we just went back to the old normal.
Further, the lockdown has actually been good for some people's mental health. I'm much less stressed and much calmer since it happened!

 

Definitely!
I would think that deaths would be down significantly. Road deaths would be down. Crime is down. The flu (which I believe kills 1500 people in Australia a year) is down significantly too!

 

Hi folks. This article:

https://www.smh.com.au/politics/fed...ative-for-economic-boost-20200601-p54yda.html

Might not seem to be about house prices (though the first bits about RBA sentiments are worth a read...), but one paragraph in it struck as highly relevant to this topic:

"But CoreLogic on Monday reported house values last month fell by 0.6 per cent in Sydney and 1.1 per cent in Melbourne. The value of units also dropped in both cities, down 0.1 per cent in Sydney and 0.6 per cent in Melbourne."

Many on here (myself included) have been suspicious of Corelogic data for some time. Now I do not have anything to back up this suggestion and I may be completely wrong so please stop me if I am over reaching; but does the (very!) mild decline in Syd/Mel metros cited above by Corelogic, seem accurate to those on the ground?

Seems to me from many anecdotal posts on Property Chat that falls larger than this (in the realm of 5-10% calendar 2020-to-date) seem more realistic. I guess Corelogics report is monthly so their small %'s are for the May month only??)

 

I have seen around 5-10% discount/drop in the suburbs that I have been monitoring in Melbourne: Glen Waverley, Vermont, Vermont South, Burwood, Burwood East, Hoppers Crossing, Werribee. For example the one below listed for $1.150 mil which was quite realistic before COVID-19 but was sold for $1.085 mil a week ago.

https://www.realestate.com.au/sold/property-house-vic-vermont+south-133302786

The caveat is extremely low volume.

 

I’m not for a second questioning the market taking a big hit but reading some of the language in articles the last few days based on 1 months data is absurd.

 

I bidded at a property in Banksia, near Arncliffe on Saturday. Nice street, nice (albeit old) property, well presented. 3 beds, 1.5 bath, 0 car. Guide was $950k, achieved $1.165k.

I am seeing more buyers than sellers, and I am also seeing scarcity.

 

Interest rates are probably the lowest at any time in history and have been on a downward trajectory for the last several years. The low-interest rate tactic has done nothing to stimulate the economy - what is plan B when negative rates don't work? On the flip-side, will negative interest rates worsen the economy hence this is a case of 'be careful for what you wish for'? What is plan C, D, E.....

The current attempts and statements making it into the media to get the economy stimulated reminds me of the famous final scenes of 'Blackadder Goes Forth', stuck deep in the trenches and bombarded by the enemy.....the only way out it seemed was for Blackadder to put a pair of jocks over his head and stick two pencils up his nose and say 'wibble'. As a non-economist, this appears to be the equivalent of having negative interest rates - bizarre!!

 

A Guide figure means absolutely nothing other than a marketing tool to garner interest.

Its always difficult to make an exact guesstimate but there needs to be context other than comparison to a marketing tool in the midst of a pandemic. As an experienced buyer, is that $1.165k achieved price, a lower, comparable or higher figure than what would have been your expectations had the property been sold in say mid-February when the market was running fast and the banks were loaning freely with no restrictions on credit.

 

Fair enough. The reserve was $1,050m if that helps. My pre auction estimate was close, but I was trying to illustrate a point about the demand supply profile of Sydney right now.

 

Bank interest rates at 0% will def stimulate me.

 

Definitely a nice bounce in the following suburbs :

Blacktown, Seven Hills and Lalor Park where I’ve been looking.

Houses w/Granny Flats are fetching above $800K and even in terrible condition, get snapped up and under contract within 2 weeks.

35 Tulloch St Blacktown sold for $740K
233 Vardys Road Blacktown for $800K

 

Aah...the property industry, where it is perfectly acceptable to do what is illegal in all other areas of sales. Here...the guide is 10% less than what we will actually sell it for...oh it's ok it's just a guide you should do your own research. The guide should not be less than the reserve (minimum price) if anything it should be more than the reserve (especially if comparable properties have a higher price)

 

BUT everyone knows it which makes it so ludicrous! Pretty sure they teach it in basic maths to kids these days.

“OK kids we have a listing price of 950-1mil, what is the actual reserve?”

“Well miss we add 10% to the high end of the asking price so is it 1.1mil?”

“Well done Billy that’s a gold star for you”.

Just cut it out already!!!! It needs to be illegal to have a price range below reserve.

 

it looks not over priced. $800 pw rent for $740k investment. This didn’t exist in Sydney for last 10 years??

 

I do notice properties being snapped up for good prices eg a top floor 2 bed walk up Lewisham unit in inner west Sydney sold for $908k, $100k above price guide. I am guessing the buyers now are first home or owner occupiers - with a glut of supply for tenants to choose from and lower rents, how can investors cope unless they have a big buffer?

 

Wow - $908K for a 2-bed apartment in Lewisham is very high. I also live in the inner west area and though Lewisham is a great suburb with plenty of transport connections and a real sense of 'community' vibe which is lovely, 908k for a 3-floor walk up 2 bed is a LOT. Especially considering if you head a few more km's out west - Ashfield, Croydon - you could pick up similar stock type for low-mid 7's. If you head a couple kms south again - say Campsie, Croydon Park - you could pick similar up for mid 5's to mid 6's.

It just makes me wonder how much people will overpay, just to secure that desired suburb of choice, even in a market that is facing a most likely 'substantial' downward trend ahead.

 

The unit is renovated and location is quite nice overlooking a park, but yeah very expensive for Lewisham:
12/8 Morton Avenue, Lewisham, 2049, New South Wales - Raine & Horne Marrickville

Although Campsie is more affordable, it is heavily oversupplied with new builds.

 

Yeah Campsie is nowhere near as nice in general as Lewisham, but suburbs like Croydon/Croydon Park, Ashbury; are just as (If not more...) green and low-rise and close to major transport and shopping/restaurant hubs as Lewisham is (well, Lewisham also has the light rail, to be fair), but a similar unit would be at least 200K less.

As a PPOR, buying in these suburbs instead, = about $160k LESS debt. As an investment, cash-flow wise (do we REALLY think the 905k Lewisham unit is gonna see any CG over the coming few years ahead??), the SLIGHTLY higher rent the Lewisham one can command is not exponentially higher than the rental-return on these other, much cheaper suburbs.

But hey, I didn't buy this thing and I wish the buyer all the very best with the unit for whatever they are seeking to get out of it!

 

On the ground in Melbourne SE, PPOR (1.2-1.3M median suburb) off approx 5% but low sales to judge from, IP & development suburb (650k median) almost no change.
Straight up agent for that suburb notes anything realistically priced is moving quickly.
He is holding out on private inspections for as long as possible as he knows any requests received are serious buyers & is achieving a high conversion rate into sales.

 

The Lending must still be cooking.