NSW Sydney 2020 "Megaboom"

Discussion in 'Where to Buy' started by Peter2013, 1st Sep, 2019.

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  1. John_BridgeToBricks

    John_BridgeToBricks Buyer's Agent Business Member

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    I think the market has been like a coiled up spring and is now releasing. It won't all happen in a straight line, but i think the move is up, and more explosive than many people think.

    I know what you are saying - "where is the income coming from?". But when interest rates are cut, this is tantamount to an expansion of discretionary income (for debt holders at least). And in a negative rate environment, it is irrational not to hold debt.

    In terms of demographically, remember that we grow by one Canberra per year, or about 350k people - so some of the "new income" is coming from immigration. Simultaneously, new approvals for dwellings have been falling off a cliff for the last 2 years.

    A boom is not that hard to piece together. I definitely could be wrong though.
     
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  2. mickyyyy

    mickyyyy Well-Known Member

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    Every boom is funded by investors mainly depending on suburb but if lending gets easier like back in 2013 then all suburbs will boom
     
  3. John_BridgeToBricks

    John_BridgeToBricks Buyer's Agent Business Member

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    Yep. Again, if rates go negative in real or nominal terms, you will see cash come out of other asset classes to chase 3% yields in real estate.
     
  4. mickyyyy

    mickyyyy Well-Known Member

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    Can you show us this as it sounds interesting!

    Depending on how much more money can investors get I see most will go Brisbane as it represents good value and good yields.
     
  5. mickyyyy

    mickyyyy Well-Known Member

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    You basically saying stock market crash or not going to perform so monies come to real estate?
     
  6. John_BridgeToBricks

    John_BridgeToBricks Buyer's Agent Business Member

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    Not sure about the value, but you certainly get yield, and that is good.

    Here is an article I wrote over a year ago, with the Sydney to Brisbane ratio as at 30 June 2018. Obviously Sydney moved sharply down since this chart was made.

    Sydney vs Brisbane - Property State of Origin! - Bridge to Bricks
     
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  7. TheSackedWiggle

    TheSackedWiggle Well-Known Member

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    why is credit not expanding in some of the European nations which have had negative rate for some time now?
     
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  8. TheSackedWiggle

    TheSackedWiggle Well-Known Member

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    Assuming we are talking about cashed up investors,
    Why should money come out of high yielding stocks? which can give investors an hassle free net yield of 5/6% to invest in Sydney RE for a net yield of 2% (plus the added RE hassle)?
     
  9. John_BridgeToBricks

    John_BridgeToBricks Buyer's Agent Business Member

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    Credit is expanding, but there is no velocity due to declining demographics in Europe.

    If you have a nation of 60 year olds, no amount of currency creation is going to entice them to buy more property....
     
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  10. John_BridgeToBricks

    John_BridgeToBricks Buyer's Agent Business Member

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    Because 3% with leverage is more valuable than 6% without leverage.
     
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  11. mickyyyy

    mickyyyy Well-Known Member

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    If I moved to Brisbane and transit time on the train taking 5 more minutes than in Sydney that I currently do, I can buy in the North in a pretty decent Brisbane City Council suburbs for less then half the cost of Marrickville, if that is not good value then I don't know what is...
     
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  12. TheSackedWiggle

    TheSackedWiggle Well-Known Member

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    And upcoming demography headwind is not an issue in oz?

    Just curious,
    I use to think migration rise is because of economic growth
    Are you proposing economic growth because of migration?
     
  13. John_BridgeToBricks

    John_BridgeToBricks Buyer's Agent Business Member

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    Yep, fair point from a qualitative point of view. My comment on value, was that I didn't think Brisbane was cheaper than Sydney in historical terms right now. But if you are putting a value on quality of life, you are right. Harder to measure those things though, but good point.
     
  14. BuyersAgent

    BuyersAgent Well-Known Member Business Member

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    did you read the articles I posted last week?
     
  15. John_BridgeToBricks

    John_BridgeToBricks Buyer's Agent Business Member

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    Our median age is low 30's, and our population is growing quickly. Very different to Europe.
     
  16. TheSackedWiggle

    TheSackedWiggle Well-Known Member

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    exactly... if yield arbitrage is the purpose why not go to an asset at higher yield for same hassle and leverage.
     
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  17. TheSackedWiggle

    TheSackedWiggle Well-Known Member

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    and that's because Europeans are not able to attract skilled migrants?
     
  18. TheSackedWiggle

    TheSackedWiggle Well-Known Member

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    I thought you were talking about cashed up investors,

    Are banks keen to lend in a depression (aka negative rate environment)?
     
  19. TheSackedWiggle

    TheSackedWiggle Well-Known Member

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    Our population is growing because of high migrant intake(HMI), jobs has to grow to sustain that intake, in absence of jobs growth HMI cannot be sustained,
    Inverted yield curve is signalling an upcoming slowdown across the globe, couple that with automation headwind and we are looking at a sustained low or no wage growth env in absence of jobs growth.
     
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  20. TheSackedWiggle

    TheSackedWiggle Well-Known Member

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    I think central banks worldwide runs a very high risk of loosing total control of inducing inflation infused credit based growth.Within a decade we can see an euthopia with abundance of cheap services, thanks to technological advancement, funded by MMT where traditional assets price growth projection based on old inflationary credit model will no longer be applicable.
    :);)
     
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