Sydney drops 4.7% over last six months - what do you think is happening?

IMHO Sydney CBD has a big component of financial firms and related businesses. Currently a lot of them must be feeling some squeeze from volatile financial markets, china slowdown, apra changes, basel regulations, mining downturn/bankruptcies. Kinda would be expected they cut costs and slim down or slowdown their hiring at some stage.

 

Yes..this will be interesting to see how it is going fwd. The election and the uncertainty it brings might also delay spending on projcts..dunno.
Not sure if its deeper than that- ie they might have gone as far as they are willing for the money. Ie they just ewant to take stock for the next 6mo to 1 yr and see the return on projcts they have started within the last 1 yr z, of which there would be many.

 

Sydney's house price growth hasn't peaked yet: Herron Todd White

 

My sister in Castle Hill says a local agent told her just now that her place would sell for 1.9mill - hers is better than another one nearby that sold for that much.... thats more than double what she paid only about 4 years ago....
Gobsmacked.

 

Sydney is definitely cooling.....have heard some moans from people who bought H+L off the plan...one had a 10k drop and the other 80k off the plan.

Both can settle...but not happy chappies.....

The Northwest...West...Southwest are feeling it the most.....no surprises here...just normal part of the cycle.

 

Don't forget the apartment oversupply. This is now large enough to cause a whole world of pain. Brisbane and Melbourne are particularly vulnerable. I believe the correction is already kicking in.

This is all normal stuff....the real problem is the scale. So many OTP apartments have been built that it has the potential to seriously dent the banks.

If that happens things will get interesting.

 

There are H+L packages and there are H+L packages. Some H+L prices are actually quite reasonable and some just ripped people off. It depends on what you signed up for .....

Also if the location are good, they will surely recover.

 

No in certain parts of Sydney...the banks are becoming very conservative.

There is very little value in Sydney at the moment...yes they will recover but cycle is pretty much over in Sydney.

Melbourne is surprisingly affordable there are parts of the city within 30 klms (which is really good for a city at about 4.7m) you can buy for under 300k. Albeit these are smaller houses but they are being snapped up. You would struggle to get into that price point even in Perth and Brisbane. Adelaide is the other option.....

Unfortunately...people are being lead by people who have an vested interest in talking up Sydney....the reality is showing up when financiers get involved.

 

Yes...you are absolutely correct....they are selling 1brm apartments in places like Lane Cove and North Ryde for 700k.

A lot of these are being sold to silly overseas buyers who have no clue. Most are from Asian countries (China, India, etc) who have no idea how the markets in Australia work.

 

Actually I find that everyone is pushing their own agenda be it Sydney, Brisbane, Melbourne or Gold Coast. One would have to be a bit blind not to see it. For us readers, it is irritating when a same poster constantly pushes for a same location, "discreetly" pumping his own agenda.

 

Yep...agree....the issue is whether people have the experience to see what is going on and if they can get on the ground to see what is going on.

Just got back from Melbourne....I was planning to wind back investments from there...have changed my mind...and watching for more opportunities. My friend and I bought land for 124k and 130k each....this is now more like 170-185k.....and that has happened in period of 10 months.

That particular suburbs no longer offers value...but just saw a couple of others which are unbelievable value...watching on the side lines at the moment.

The other opportunity to get in early with a 5 year horizon..is Perth...unbelievably low prices on some existing stuff....but rents have come a but also.

The other thing I find...is that some silly people are basing their investment decisions on relationship with certain people....they do not due diligence. I'll leave it at that....

 

@sash That land price sounds so cheap if you compare it to similar areas in outer Sydney. I wonder for how long. Is that West/North Melbourne?

 

North....Melbourne still has more land than Sydney. The issue is the cost and how long it take to being it to market. Just heard that one company has been working on bringing land to market near Epping for over 5 years.

Here is an interesting article which supports the fact that reasonably priced H+L is not the issue but new apartments in the Inner City...

Interest rate rises could smash apartment market by 20 per cent

 

I spoke with an agent couple of weeks ago in Epping NSW and he pointed out lots of the overseas buyers are dependent on the availability of loans to settle. The cashed up buyers are small in terms of percentage. Lots of the overseas buyers are just mum and dad like us, with a job and some deposits.

He also pointed out that lots of buyers will sell after 1 or 2 years of holding after tasting the bitterness of lemon. The number of "for sale" appartment will not decrease after 18 months. It will increase.

He also pointed out another important, often forgotten, "black swan" factor that the Chinese dollar is devaluing rapidly. Some dude suggested a 30% devalue in the near future. This will seriously worsen the Chinease buyers' serviceablity and force the apartments back to the market.

Next 18 months is a worrying period of time. I hope I am wrong !

We are not talking about interest rate rise yet.

Our varous level of government may also "rent-seek" and introduce higher absentee or holding tax for foreigners, forcing the apartment back onto the market so that the locals can benefit from massively disounted price.

At the moment of typing, I can see and feel the sharks are swimming in the sea of red blood.

 

Agree with oyur thoughts below.......people are forgetting that China is now almost a mature economy the growth rates will be more subdued. The costs of doing business there is also more expensive so this will also hurt China.

It is quite funny you mention that the Yuan is being devalued by the Communist govt....it is their ploy to keep prices of things under control and prevent a revolution...things have got very expensive there.

Also agree about rates settling for a while now given Brexit..and softness on the OZ economy.

I too see blood in the water......it will get interesting...particularly in parts of Sydney and Melbourne...

 

Their own fault buying at the prices they did.

 

The Inner North West (Macquarie/Ryde) and the Inner South West (Canterbury/Bankstown) are still performing well. Clearance rates in these areas have rebounded from a slow start this year.

 

I like the name of the dog - Wilbur Smith lol

 

Sydney house prices surge, now back above $1 million: Domain Group

Another quarter result to prove that "so-called" property experts @PropertyChat are wrong again!!!

 

Glad I bought in the short period described as December last year...
Ps. I have a colleague looking to buy. He wants to buy a house around Pennant Hills or maybe Quakers Hill, budget 1 mill. Where he buys depends on whether his year 6 son is accepted into selective high school classes...
Anyway, on the internet he shows me one he likes that's in Pennant Hills, its a sale by auction, no price listed. He asked me know much I think it would sell for. Well, after looking at the pictures, I said 1.6mill.... it was a very nice house...