NSW Sydney , 10 % growth in 2016 ?? what do you think

Something else to consider is the type of majority of stock being sold that makes up those figures.

I have been watching a suburb whose growth is now much lower than for the past two years but that is because for that time new and fairly new homes of substantial size were being sold so the recorded sale price was high. What is selling now are the much older 60's and 70's homes that require work and of course their sale prices are substantially lower.

So if I made a purchase now of one of those properties, it does not necessarily mean that I am buying at a substantial discount.

 

Correct , new up Market sales will increase prices and they're all sold . Lots of ways you can get misleading price changes

A few months ago there was a decrease in the price of unit sales in Wynnum which puzzled me . A quick check showed there had previously been a lot of three BR's sold , where as that month , mainly 2 bedders .

Cliff

 

My personal theory is that you just need demand and competition at the expensive end of the market to push prices up all the way down. You dont need wage growth from average income earners because people will compromise on size or location before they give up on owning a home.

 

You absolutely need average income growth. Things are at a ceiling now- if not they are in decline because property in Sydney is what? Unaffordable for many groups of people. This has seen people priced out of the market and a subsequent decline in Demand- which we all know drives price growth. Without suitable income there is no demand and we have not seen such a disparity between average income and average dwelling price in Sydney ever before. So yes absolutely an income rise is needed for prices to continue rise.

 

Exactly!

If people can’t afford to buy homes and they realise they have no hope of ever buying a home they will simply move elsewhere. There will always be some people willing to be life-long renters, but for most Australians being homeowners is still their main aspiration. Likewise rents are related to earnings. Over the past couple of years wages have been stagnant, which has carried over to rents remaining relatively flat. Once again that has a flow-on effect to prices as less and less people can afford to become investors with low yields as the holding costs start to add up.

 

If owning your first home is being replaced by renting it, then how does that affect prices?

The cliché is that investors outbid young buyers because they've got access to greater borrowing power and assets. I don't know if that's borne out in reality, but assuming it is, then that's supporting the bottom end of the market at a higher level than salaries alone might justify.

I'd be interested in seeing how this impacts further up the ladder. A few years back there were various articles in the British media about the plight of second home buyers, those who'd bought a small apartment but couldn't afford to move into something bigger. I don't know whether the same is true in Australia, but in London I knew of various people in their early forties moving out of town in order to secure a house to raise a family in.

 

Housing in Sydney- Second most unaffordable in the world.
Sydney, Melbourne houses in world's top five most unaffordable: Demographia

 

3.1 % drop the last quarter across the board.The slide in Sydney has started

 

The 3% drop is not significant as the impact it will have on how it will affect people's urgency to buy....this does not bode well for the Sydney market....

 

Totally agree. the need to buy in a hurry has gone. It has cumulative effect..


I have been through two big drops in Sydney.Early eighties and early nineties..
It ain't pretty.

 

Something to remember is how small London is in comparison to Australian Cities though. Sydney is nearly 10x bigger than the London Greater Area and still 4x the Metro Area, based on that you could argue that a large portion of Sydney residents already "moved out of town" in order to secure a house!

 

Are you sure? Whats the difference between 'london greater area' and 'metro area'?

 

Greater London is the county of Greater London, the official city area. The "metro" area is the travel to work area, basically a region, basically the region circled by the M25. To put it in comparison the M25, which encircles London, is only slightly longer than Perth goes North to South only.

 

Ah, wasnt sure if you meant 'greater london'. Im so surprised about sydney. How does melbourne compare? Do you have a link pls?

 

Based on the 2011 Census Sydney is 12,367.7 km2, Melbourne is 9,990.5 km2.

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Australian cities are all massive by area. It's the major reason our public transport is so poor compared to most countries, especially when combined with how remote our cities are and low our population is. I've said it before but Perth north to south is roughly the same distance as the middle of Philadelphia is from the middle of New York and Perth is tiny compared to Sydney and Melbourne!

 

Wronggggggggggggg

 

The M25 is about 55 km east-to-west, which is about the same as going from Penrith to the coast at Manly or Vaucluse. The bulk of the population in Sydney probably lives in an area that's about the size of metropolitan London.

However, surrounding London is the commuter belt, which probably occupies a larger area than the Sydney metropolitan area. That's where my friends have been largely decamping to.

I'd agree that the population is less dense over here though, which contributes to the sprawl. I found an image comparing Melbourne to London, and shows the cities are of a comparable size, despite Melbourne having about half the number of residents.