NSW Sydney 2020 "Megaboom"

Explained here ...
House price increase from trough ... so far

(analysis is based on the Core Logic Daily Index )

• In the last 28 days the Sydney index has increased 1.694% .
• My forecast for Sydney = 4.6% YoY 2019 ( forecast was 4.2% YoY 2 weeks ago ), this is based on extrapolating last 28 days of movement

Chart data has been rebased to the election date.

 

Spot on...

 

This assumes they buy in Vaulcluse. But they don't. They buy in Castle Hill, Carlingford and what was once known as Baulko. Not many old-timers in those parts now. And not further out either.
Look for the most-liked posts and you'll find where the blood money gets spent.

 

All it would take would be the easing of credit - would be the spark on the parched vegetation, driven by the winds of demand.
Only a matter of time before banks are given their fredom with some new form of credit again.
2 years max?

 

3 million dollar house rich v 20 million dollar house rich.

 

Like trying to herd cats - live ones.

 

That's not how it works. The word used was 'progeny'. It's a little more discreet, mate.

 

Castle Hill is crazy expensive now! $3.5 million for a nicer house. $1.4 for a ‘normal house’ - like what the...

 

Had a chuckle

 

Tracking along nicely I guess.

Bold tactic nets couple unusual home

 

Just wondering @Redom is it actually harder for somebody with a deposit, etc to get an investment loan than a couple of years ago? Is it especially harder for investors compared to OO borrowers? Or are investors just finding it far more difficult because there haven't been the price rises over the past couple of years required to release equity for new investments?

 

Main changes are:

- Verification - banks now ask for far more information and questions about your situation than a few years ago. Over the market, this slows down activity & means those at the margins may no longer qualify.

- Borrowing power - for repeat advanced investors, there's been a noticeable downshift in borrowing power. In the past there was scope to have very very large borrowing amounts, APRA have snuffed this out a few years ago.

The latter is a big blockage for very advanced investors with large portfolios.

 

How about a medium size portfolio investor with 5 properties? Is that still possible?

 

the amount of debt you carry matters more than the amount of properties you carry. You might have 20x properties with 200K debt on each , or you might have 10 properties with 400K debt on each , or you might have 5 properties with 800K debt on each - any of these combinations still add up to 4 million of debt ... and while there would likely be a lower yield on the more expensive properties ,resulting in slightly less rental income per dollar of debt - and this will have some influence on borrowing capacity - if we look solely at the debt side, every dollar of the 4 million is still going to be assessed at a 2.5% buffer and at P&I remaining term - liberty and pepper and bluestone aside - whether it’s spread over 5,10 or 20 properties .

 

How come this criteria is different for them?

 

They are not under the same constraints as other lenders as they are not ADIs - Authorised Deposit Taking Institutions . APRA can technically police them and require them to fall into line with regard to treatment of existing debt but have so far resisted doing so , as they represent a small % of total lending . So while that remains the state of play, they are able to use more aggressive policies with regard to treatment of existing debt , and therefore offer far more borrowing power than others . That being said - their rates and establishment costs are dearer generally and they will only take a certain dollar amount per borrower - liberty won’t do more than 1.5 million per borrower for example .... so you can’t place really large portfolios there .....

 

What is the risk associated with that?

 

Looks like DTI Ratios are coming

http://communication.ecomm.anz.com/...pJobID=1620250247&spReportId=MTYyMDI1MDI0NwS2

 

What is Sydney's average loan to value ratio? Do you think this will have an effect?

 

Dont know what it is now... but pre APRA it was 10.4. If we accept Sydney's median corrected by @15% , that would bring it down to @ 8.85 x income, although we need to allow for a tint bit of income growth so lets call it 8.5 x income..... so there isnt much room to move if all lenders decide to cap things at 9 x income.