NSW Sydney Market..where is it heading..a personal view..

If the 2004 experience is anything to go by, prices will fall and then stagnate for quite a long time.

I'm expecting nominal falls of 10-20%, or real falls of 20-30% over maybe 5-6 years.

 

Auction clearance rates are very recent (4 days ago). Rental vacancy rates are published weekly by SQM, so the latest figures are also a few days old. Housing finance approvals are published monthly by the ABS with a lag of 5-6 weeks - i.e. in early June they published the April figures. Stock on the market is published monthly by SQM for the prior month.

So the recency of the data ranges from a few days to several weeks.

 

Ok....then it would be interesting to see the trend from end of this month and how it will affect the Sydney market!

 

I'm calling it now...well in advance - we are in for a rate cut next month.
Why? Long list, but essentially growth is persistently below expectations , dollar is too high, US is going strong, and Greece will get a short term lifeline, thus upward pressure the A$ more. Inflation is well in check. Asx 200 seems slightly overvalued but not alarmingly so. Consumer confidence is also average, with exception of Sydney and parts if melb. Development of non mining industry has been tougher than thought, and they need more support..and that is gonna happen via IR cut.
Brace for more growth in the top 3 markets.

 

Trolling through this thread,

I'm curious as to why the nsw govt spending budget is being overlooked. Mass civil works keeping employment in Sydney going as opposed to slashing budget of queensland.

Translation for nsw , people working on long term jobs = less unemployment. People working means debt can be serviced. Most of the craziness is from owner occupiers.

I for one think the dance will continue as plenty of music is happening. Having said that I did sell an investment unit last week.

 

Why? Because nsw has jobs, economic growth, gdp growth etc... Yes the dance will continue , as long as rates are low- just that the tempo will slow naturally as prices become more out of whack with incomes.. Lower falling rates encourages and is most beneficial to non mining...and where's that? Sydney and melb. Thus, rate cuts will further drive house prices in these cities- although at a slower rate...Brisbane will be the dark horse...it's got very attractive fundamentals, but also has challenges that sydney does not have such as a lame duck state government and a somewhat undeveloped non mining economy.

 

Sure. But this is a sydney-centric thread. So lots of work coming on from a state stimulus budget.

Nationally we are readjusting with structural issues and a third of the country in technical recession. Rba won't be raising in a hurry. Low dollar helps our traditional exports so no pressure on that front.

The only foreseeable pressure will be on the U.S. lifting rates, then I do agree we may experiance upward pressure with an RBA having some wiggle room to keep it down.

 

20-30% correction? You blokes serious? That's a house price crash... That would destroy our economy would it not?

 

Yes, that sounds possible and serious. Given that most people typically in the western Sydney (Northwest and Southwest) buying the overly inflated property.

So far to date, I've seen people selling Land or Development sites in Campsie, Burwood, Westmead, Punchbowl, Harris Park and Baulkham Hills to name a few, that's a sign o economic slowing down. Because if those vendors/developers (I read it from the contract PDF file, some even included the DA certificates) tried to sell it now, I guess they've predicted that it will be a slowing market opportunities ahead.

 

How do you determine overinflation? Keep hearing the whole overpriced thing but Sydney in general seems overpriced

 

Good post, agree that a rate cut is coming but I think they'll wait a bit longer to see how inflation pans out. My bet is rate cut in Sept.

 

There will definitely be some properties that will drop 20%-30%, but on average I would be extremely surprised if the Sydney market will correct by more the 5% and not gain it back in less then 2 years.

 

From this type of report according to my friend who works in Parramatta city council:

Typical residential land values were:
• 649 square metres at Edenlee Street, Epping valued at $716,000
• 651 square metres at Weller Place, Rydalmere valued at $471,000
• 588 square metres at Cox Crescent, Dundas Valley valued at $444,000
• 487 square metres at Fennell Street, North Parramatta valued at $414,000
• 569 square metres at Meadows Street, Merrylands valued at $304,000
• 575 square metres at Derbyshire Avenue, Toongabbie valued at $328,000
• 556 square metres at Marconi Street, Winston Hills valued at $366,000

Typical commercial land values were:
• 610 square metres at Marsden Street, Parramatta valued at $1,450,000
• 259 square metres at Church Street, Parramatta valued at $1,030,000
• 88 square metres at South Street, Granville valued at $261,000
• 531 square metres at Rosebery Road, Guildford valued at $277,000
• 1,170 square metres at High Street, Parramatta valued at $811,000

Typical industrial land values were:
• 683 square metres at Victoria Road, Parramatta valued at $545,000
• 446 square metres at Bridge Street, Rydalmere valued at $279,000
• 1,141 square metres at Euston Street, Rydalmere valued at $550,000
• 6,417 square metres at Grand Avenue, Camellia valued at $2,580,000
• 3.7 hectares at Briens Road, Northmead valued at $8,120,000 ​

Obviously the vendor looking to increase the profits margin in the auction which is way above 20% of the price per square metre.

 

JH?

 

Yes.

 

That report is 18 months old..

 

Hi there mate ;-)

and Hello Womby !

 

There will always be the odd distress sale after a boom like Sydney is currently having.

As always, the higher end fluctuates a lot - silly buy prices (because folks have the dollars to throw at places without too much concern) so this section of the market will see a few 20% drop sell-offs.

But, back in mainstream Mum and Dad land; unless interest rates go waay up real fast (not likely), all you will see is a hibernation - folks will simply hold on and not sell unless they are forced to...a slow death between 2016 and approx 2020 is my prediction.

 

• 651 square metres at Weller Place, Rydalmere valued at $471,000
• 588 square metres at Cox Crescent, Dundas Valley valued at $444,000

I know the above areas well. They are now in excess of $1 million dollars. A new detached duplex sold for $1.4 million. In last 2 weeks, all properties in Rydalmere sold for more than $1 million, even for those that need to be torn down. Dundas, Ermington, Rydalmere have boomed a lot. Oatlands prices haven't changed much.

 

On that theory, the over supply of 20-30 storey units that are being pushed into Epping may actually bring prices down.