NSW Sydney 2020 "Megaboom"

Units are oversupplied but houses are not. Eventually people have families and would not want to live in units. This will drive up house rent prices. Unit rents have come down and should have ages ago.

 

nice.. but I can't trust this logic

it was only a couple of months ago that they said oversupply will be away by late 2019, not they say it will be mid 2020.

I don't know much about the economics behind, but I can see desperation when I speak to R.E agents who sell apartments (at the moment, and agree this could change slowly)

 

Exactly! Interest rates will go up toward the end of it and cause massive price declines. So why buy in Sydney?

 

the issue with migration is that they are not anymore allowing everyone to live in Sydney/Melbourne and the big cities. around 25% of the migrants (or more) will need to stay regional for 2 years before moving to Sydney/Melb.

It is nice to say all these of paper, but I highly doubt the oversupply will be over as soon as they claim it will

 

Yes, but "the end of it" will probably be mid next decade. A lot of runway to miss out on between now and then.

 

I think I have mentioned it before, but John Lindeman has done a lot of work on this. He said, and I'm paraphrasing, that we are sleep walking into a rental shortage crisis in the next few years.

We'll see. It's difficult to predict anything really, and nothing moves in a straight line. There will be many times in the cycle where people with opposing views can all claim to be correct. As with everything, do your research, and take measured risks. The problem with real estate investing, is that the risk or being un-invested is as big as the risk of investing in the wrong thing. So go with the gut.

 

Ditto!

 

We will see John...not all areas of Sydney are doing well.....as I have said before you have a vested interest.....

 

Hi mate - I like your posts and contrarian view but why bash anyone's opinion solely if they have a vested interest or a title at the end of their name. I really like John's posts and I think he puts his points across very well and quite articulate - as do you.. but mentioning his vested-interests non stop is playing the guy rather than the ball.

 

Not a matter of trust but opinion... and for that 'ordinary' opinion to have originated from 4 sources aka RBA, CBA, Stockland and Mirvac.. in your eyes is worth less than your 'feel of the trust'.

Good one..

 

I think owner occupier stock will keep rising so find a great blue chip street, with a slightly rundown house, renovate it and extract the tax free equity without incurring transaction costs. These sort of homes are NOT EASY to buy well (Buyers Agent’s like john can help as well as knowing liquidators, accountants, becoming mates with local agents etc)

You are competing with mums and dads who want to raise kids and will pay top dollar for these properties. And they cost an absolute bomb to hold so unless you are on a 45% tax bracket, it doesn’t make sense

Blue chip property appeals to families and high income salaried professionals wanting to reduce tax. Most businesspeople or entrepreneurs don’t pay anywhere near that tax rate anyway. They have easier ways to avoid tax than tying a 7figure mortgage noose around their neck.

Most investors are stuck buying dubious quality stock - house land packages, units - and the investment case is becoming more difficult. Those assets are hard to sell, don’t grow in price, and the yields are coming down.

 

Double Top?

 

This!..I was once advised to invest in sydney walk up for the best capital growth lol...like mate you gotta buy this..hard sell style...you wont get CG on free standing house in Brissie...

 

Possible Housing Crisis Explained

 

I see there are some regulars on here....have lots of comments but little property....anyway lets see....shall we?

Remember the prices are recovering from a 15% fall.....the only reason they are going up is interest rates are super low which are at emergency level....what happens when it comes back to normal.

As for John....he is a BA for Sydney...there are other markets which will perform much better.

 

There is a reason...too many of these people who have too many vested interests...and this forum should have some level of transparency.

For example....a lot of people went into Logan.....this market has tanked both price and rent wise. As an investor people should leave emotions out.....some people keep making the same mistake over and over....

 

Depends on the area. Old walk ups are getting great prices.

As for rents going up...I don't think so.....the supply in Sydney could take a few years to clear. The other thing people do not think about is returns on houses will be much lower once stamp land tax is factored in. By buying even 2 houses in the West you could be stuck with a 3k land tax bill. Units have strata but that also covers building insurance.

 

how convenient...lol, as if none of these sources have any interest in the housing market picking up

I work in one of those 4 sources that you mentioned, and I know how we crunch numbers to give these so called 'Opinions'.
My opinion (which you insultingly referred to as 'feel of the trust') comes from my own research looking for a property.
I found R.E agents who I dealt with (especially the ones selling units and not houses) desperate to the core at the moment. There is so much oversupply in some suburbs that there is no way it can be consumed in such a short time .
I have no idea about houses and hence no comments about them, as I mentioned previously houses and units are playing different battles at the moment

 

Completely agree, the unit oversupply is so much in many suburbs.

 

Can't disagree with the investment part. It is important to calculate the risk and invest wisely

However, cannot agree with the rental shortage crisis part. Again happy to be proven wrong, but this does not make any sense. The supply with units is so high that if there is any kind of crisis likely, it is the 'Rental affordability' crisis (with owners reluctant to lower rents) and not 'Rental shortage crisis'

All I am disagreeing is with those experts who claim that housing could only go upwards...In my opinion, we do not have enough clarity on where it is heading and all 3 possibilities still exist.