Property market slowdown?

Are you seeing signs of any slow down in the property market? What are they and in which areas ? How strong are the signs? What is your course of action?

Thanks

 

There is not one property market.

Lots of signs in Moranbah.....very few in Melbourne......

Which market are you referring to?

 

I am thinking of Sydney- particularly the north west/ inner-west side. However if there are national level trends then there would be a flow-on Impact to varying degrees, correct?

 

Inner West is kicking along again.
Stock levels are still very low, have been most of the year. But since the election and IR cut buyers seem to have more confidence. Also a bit of FOMO creeping back in and buyers wanting to secure something in case prices take off again. Which ironically is causing prices to take off again.
Loads of buyers at opens and auctions.

East is the same.

National level trends mean nothing and news articles discussing such trends should be treated as such. e.g. Perth was screaming along while Sydney and Melbourne were doing nothing. Does this mean that property is flat across the board? Perth has now dropped while Sydney and Melbourne booming. Still flat?

Even in Sydney, there are markets within markets.

 

I drove past the ponds, schofields areas and it's like there is no slow down. Yes, FOMO is my concern too .

When you mention stock levels are low- what is your data source? Which areas?
I was speaking to a BA yesterday and she mentioned that there properties that were not getting enough tenants or lower rents which indicates higher supply in the ponds, schofields areas.

Isn't ignoring trends and changes to banks lending rules like burying heads in the sand?

 

The worry is there are little signs of a slow down in Sydney. Another week of 80% plus auction clearance. I don't know what the buyers are smoking

 

As I mentioned Inner West and East, my data source is me. I have alerts set up for my areas and know every property on the market. Also have a number of agents that I speak to regularly. There are potential sellers, upgraders, but the they are concerned about not being able to find something new.

The Ponds/ Schofields is not inner and I have no idea what is happening there.

Yes I guess it is.
I'm haven't made any suggestions on course of action. Just pointing out my observations.

 

Agree, would be interesting to see investor v OO breakdown for the past 2 months.
Feels like a lot of PPOR purchasing.

We were one of them, sold last July in the madness and recently just bought our new one. Nice upgrade from tiny to massive house with a pool for basically same price. (Less stamp duty and commission). We believe we bought under market value and this has been validated by 4 more recent sales of lesser properties for much more than we paid. Just shows if you know your market you can spot the bargains even in hot markets like Sydney's inner west.

 

Certainly isn't a slow down here, depends where you mean. Every city will be at different points.

 

Maybe in PPOR homes, but for some of the areas I am interested in, it's still a hot market.

 

What areas / property types are you looking at?

 

1) yes
2) Perth
3) very strong
4) buy

 

Are you seeing signs of any slow down in the property market?

Yes!

What are they and in which areas ?

Perth, decreased activity all-round, home opens seem quiet and REAs are more friendly than usual

How strong are the signs?

Currently in a declining market that was at the bottom for the previous month according to HTW Property Clock.

What is your course of action?

Acquisition mode and ramp up marketing

 

Yes, Melb is having an absolute dream run, been going strong since 2013, agents are still trying to source stock, at least in Croydon the market I am playing in.
Its also relatively easy to sell OTP for right product, right location

 

This is a very broad question.

For what its worth, don't touch

Perth
Darwin

Both falling markets. Economy in Perth is struggling at the moment, mining boom over and nothing to replace this, many job losses and business' suffering, this is my home State, I stopped buying when it peaked in 2014.

Syd and Melb both doing well, however some parts of Syd are close to peak or already peaked.

Melb has still got some steam and I expect very good Spring/Summer auction clearance . I would play it safe and buy in the affordable areas, if you can source a house on land where you can develop in the future then go for it, but at this point in time you may need deep pockets.
Check out Croydon, its a very strong market and I just love the end values of those townhouses.

Brissy, read threads on this, seems like this market is moving, I am not following this closely, there may be some good short term gains.

My spin on it is ..... if you are taking a long term buy and hold position, Melb ticks all the boxes, number 1 for immigration and fundamentals are strong.

If you are chasing CG in short term Brissy or lower end close to CBD Melb may be the way to go.

Don't take my word for anything, do your own homework

MTR

MTR

 

Hey MTR, good analysis.
I'm intersted to know why you rate Melbourne long term over Sydney.

Yes that stats have Melbourne population overtaking Sydney in the next few decades. But Melbourne also has a lot more room to grow. The Sydney metro area is so geographically restricted that with a similar population size to Melbourne it is clearly going to have much more pressure on land prices.

Sydney is the financial, legal and media centre of Australia, meaning lots of high paid jobs.

Resilient economy

It's natural and man made attractions are more globally recognised.

Climate is better (ok that's personal) but important for immigrants when deciding where to live

Price is more attractive in Melbourne but if it outperforms that gap will narrow.

I'm really not trying to ignite a Syd v Mel brawl, just genuinely interested as I see the above, especially the geographic constraints, as fairly clear evidence that Sydney will out perform in the medium term.

Cheers

 

maps.google. Same magnification.
I know I have shown more of rural Victoria than NSW.
This is to highlight the lack of geographical boundaries.

There is exponentially more land that can be released around Melbourne.

 

Prior to the Sydney markets recent boom - which started around 2013, Sydney experienced a fall in prices/flat from 2004-2012, this also included blue chip areas. (approx. 8 years, no growth)

Regardless of the issue you raised that they are not making any more land in Syd, there are so many other variables that come into play and need to be considered to put into prospective.

Property Markets go from boom to bust, and history shows this repeatedly, why???? many reasons, economy. interest rates rises, credit squeeze, market sentiment changes. Most property booms last around 3 years, check previous boom cycles.

The reason I think Melb is an attractive proposition as opposed to Syd is firstly its median house price is about $200K lower than Syd median house price, immigration number 1 as mentioned. has strong service industry which is growing. I can buy a house on good size block for $500K+ in Melb middle ring, and could be significantly less dependent on the area, ie Dallas, Broady etc.

Yes, the gap will narrow, but we are taking $200K that is massive gap

MTR

 

That's not completely true, there was a period of growth in 09-10 but I know what you are saying and I observed the cycle.
However I think the upward part of the cycle has been very strong which cannot be ignored, as you say it's all part of the cycle.

So your theory on out performance is based on a lower cost base encouraging more population growth. Which of course has merit.

My theory though is that more and more outer ring suburbs will pop up in Melbourne making sure that the median price stays lower which will in turn encourage more population growth and so on and so forth. So I agree that Melbourne will have solid price growth but I think over the medium term, from cycle peak to peak Inner Sydney will out perform.

I guess we'll have to wait and see...

 

That is such a long time! If the same cycle repeats (not saying it will), that would mean the next boom in Sydney won't be until around 2024!

I would start monitoring the market well before then.