Sydney 58% published clearance rate

Its actually a mistake, I just got off the phone with the agent to check. It was a mix up.

The unit on Glenayr Avenue Bondi Beach sold for $1,470, 000.

The unit that sold for $730k is actually this one, Its an old 1bedder 33sqm.
2/16 O'donnell Street, North Bondi, NSW 2026 - View Sold History & Research Property Values - realestate.com.au

 

No such miracle gonna happen any time soon Those days are gone buddy. Those who missed out, are out.

 

Auction newb here. Will the clearance rate eventually skyrocket when the only properties going to auction are ones which are confident of leading to above reserve offers?
Everyone else opts for private sale.

 

Well maybe...for how long?

It is end of the cycle...it will take time to adjust.....from what I am hearing the amount of stock coming on in the New Year may surprise people...

 

End of 2018 and its done till next time folks!

Yes there is abit coming on Jan/Feb next year from what I heard and a smart agent, vendor will come on after that...

 

Hearing from where??
Nobody knows what will happen next Jan/Feb.

 

If it does, the stat is even more meaningless because its on such low volume.

 

My dreams have been dashed!

 

Back to Druitt you go

 

That logic really doesn't make sense at all, though. If a large number of people are "missing out" on entering the housing market, it's because homes have become too expensive for the market, and the price itself will stifle demand and cause the price to fall. That's basic economics, and it's why housing markets "cycle" or boom and bust every decade or two.

These adjustments i.e. way housing markets wax and wane or wiggle up and down on a long term graph, are just a function of supply and demand (you often hear "property always goes up" and see people compare say prices in 1950 to prices in 2017 and it's true values do always grow long term, but that general upward trend over time is also a bit of an illusion because it's the result of basic inflation. People earn more, things are worth more).

Property has absolutely reached a point where its relationship to fundamentals like supply, population growth rates and incomes is unusually high. On a long term basis (over 100 years) the average ratio between median household incomes and median house prices has always been about 2-5 (depending on area). This trend applies the world over, and booms and busts almost always seem prices move within that range. Prices become expensive when, like Sydney, they start to reach say 10 times median incomes, and history shows it's a sure sign prices will eventually adjust in the other direction (which seems to be happening now, though it's a mug's game predicting when markets will do what they do because the time scales are just too long).

Prices create their own ceiling. If they're too expensive, people will stop buying, won't be able to get credit, and homes will be harder to sell for a time, which is exactly what we're seeing now. Demand isn't limitless because in housing terms, it's very elastic (when housing gets too expensive, people actually do stop buying it and rent or live in their parents basements or delay starting families). Supply has also drastically increased in many areas, which also pushes down demand.

The idea people have "missed out" or will "miss out" is a classic feature of all financial bubbles, and it's usually not a great sign in terms of their continued run.

 

Well I'd expect to see what's happening in Canada with the recent 15-20% market drop in major cities like Toronto (which seems, at least for now, to be settling down a wee bit). Volumes have sharply increased. Sales, not so much.

 

Maybe Umina

 

that's true for locals, but as long as Australia is open for skilled migrants from third-world countries, demand will be high (both for rent and purchase), because affordability & living conditions here is much better than in their countries... so the government always has an option to increase the migration to keep the prices high... the only question is if they want it...

 

Migrants aren't some given though. Migration is highly dependent on economic performance, because people don't move here without jobs. If (when) Australia has a recession, inward migration will drop like a rock. That's exactly what happened in Ireland, and it happens in every major economic bust period. Ireland dropped into almost negative population growth by 2007, and it happened very suddenly, down from an incredible high of almost 3% per annum (exceeding Australia right now).

Australia's population growth is down to a measly 1.4%. That's actually very low historically speaking. Victoria is the only state experiencing significant growth in the high 2% range. In 2009, Australia's population growth rate was well over 2%. In 1971 it was well over 3%. We are also building homes far quicker than we can fill them. The idea migration is keeping prices high is just not supported by the evidence.

Foreign speculative purchases were right up there, yes, but this has dropped very sharply. Chinese investment is was down almost 70% by August. Foreign investment overall was down 50% earlier in the year (first quarter), so the reduction seems to be accelerating. If the market has peaked, migration and foreign investment are just not going to hold it up. In USA for example, foreign investment went from 1% of the market to 6% in 3 years, then fell sharply, and did nothing to prevent a crash. Foreign purchasers can lose interest in a market just as quickly as they gain that interest, and flooding the market with migrants won't work. The floodgates are already open, and migration has slowed to a trickle on its own.

 

Yeah... but we need to understand that dependancy clearer. The government controls the volume of migrants, not migrants... Most migrants come here without any job offers. Many of them change their speciality to get a job. If they remove any barriers, we can have easily millions new migrants per year. So technically, if they don't care about protection of jobs for locals, they can do that.

Actually not... they're open but migrants need to squeeze as goverment controls the volume. If economy is good, unemployment is low, property prices are falling and they want to keep the prices, they can easily double the volume.

FI's invest into building more properties because they know the population is growing, regardless whether it's natural growth, or migration or combined.

So I think the market is correcting and may be flat for many years or minor growth close to inflation rate... but real crash is only possible when migration is suspended together with major unemployment issues.

 

Yes sir

 

Yes but people won't come if the economy goes through a bad patch. Inward migration here began dropping as soon as the mining boom began winding down, while the government was increasing places. How else do you explain that?

In Ireland population growth went from 2.9% to 0.2% in just a couple of years, because people just wouldn't come, and because a lot of long term residents and nationals (myself included) packed up and moved. There just weren't enough jobs. No one wanted to stick around and certainly no one wanted to settle in a country suffering a deep recession, where you couldn't be certain of job security. Remember settling in a new country is very expensive and you need to be able to build a safety ned. Migration overseas isn't cheap, visas alone often cost thousands (the average cost is about 10 grand in costs for one person, it certainly cost me close to that by the time I moved my stuff here to Oz).

It wasn't policy preventing immigration into Ireland during the recession, people just went elsewhere, to other countries like Australia where firms were actually hiring.

Fianna Fail during the beginning of the recession was bending over backwards trying to encourage migration from the EU, and even changed laws to make it easier to migrate from the rest of the EU into Ireland (new member states being added also drastically increased the number of migrants able to move to Ireland). The fact was, most migrated to work, and there was no work. People who'd recently migrated also started to leave. You see a similar sharp migration drop in Spain, Iceland, USA and many other countries that experienced recessions a decade ago. It wasn't immigration policy, it was all down to a lack of jobs. Companies stopped hiring.

The crash in Ireland was also underway before all this happened. Migration took its dive in 2007, but prices were down 5% by that point, after stalling for almost two years.

Australia won't be able to avoid a recession through migration. If the housing market does turn, a drop in migration will be the consequence, not a preventative. Remember too when economies turn, migration often becomes unpopular, which puts a lot of pressure on governments. I don't see an increase in migration being in any way popular here.

 

I was talking specifically about the unit market in Bondi Beach, saying that the days of 700k for a 2 bedder is gone. I don't understand your point saying "the price its self will stifle demand and cause the price to fall". I don't see how the current values for very high demand stock/low supply in Bondi Units will cause a reduction in demand, seeing prices go back to 700k? Doesn't make sense to me. If anything, prices will plateau a little and then go sideways. I don't see 950k-1.2m units going back to the 700k mark for units in Bondi Beach.

Also the 'boom and bust' cycle as you mention, imo and viewpoint is just a catch phrase. Most markets 'high demand' markets don't "bust", they either correct 5-10% then go sideways or their growth slows down then goes sideways. Markets which "bust" are markets like Gladstone, Moranbah and other highly volatile and speculative markets.

I don't see overall "busts" in the median prices. Certainly some suburbs have had corrections, some bigger than others, but the only "busts" I know of are highly speculative markets.

 

Where's that...

 

Well people can always wait for the 50% bust Mr Dent et al. are predicting and then get in Bondi.... but I think you and I both know that's a fairytale story ending