Sydney price decline - phase 2 - 2019-2020

It looks sydney will go another phase of price decline this year and next year. Election results couldn’t last the momentum. No one want to invest in sydney appartments / townhouses.

And rent clearly not enough to pay the cost of interest and other expense. And we don’t see price gain in near future. Other costs expect to go.
https://www.smh.com.au/national/nsw...apartments-across-sydney-20190625-p5217s.html

I don’t think people with investment brain will put money in sydney.

And smart investors don’t want to take stupid risk.
What other experts says here.

 

What did your crystal ball say about sydney 10 years ago?

 

i feel like i might of lost the few IQ points i had left from reading this thread

 

I am confused as to why an article about a high rise subsiding was linked in a post about Sydney having a "phase 2 decline"?

Regarding Sydney prices:
"Between May 1989 and May 2019, Sydney dwelling values have sat at historic highs for 44.9% of the time. The current downturn in Sydney is the deepest of any over that period with values currently -14.9% lower than their peak. The current downturn is plotting unchartered territory with prior downturns generally shorter and not particularly deep."

That being said Sydney has had the smallest M-O-M decline since March 2018 and looks to be reaching supply vs demand parity in light of the positive news from the election, RBA and APRA in recent weeks.



Personally I think that it'll soon be a fantastic time to buy into Sydney as it hits the bottom of its cycle.

 

If you truly believe in history, I can say wait and see in 10 years time.

Trust me, copy and paste will not work always.

 

This is going to one of the factor why someone say NO to Sydney apartments. If you see lots of NO, then who want to hold it.

If you want, I can give you some of the properties here in Sydney. You will see how hard agents are working to sell them. That itself will tell the future. And drive around new development here, there are tons of them going to be in market in next 6 - 12 months.

 

A small bounce post election as some investors with spare capacity pile in, but going forward more likely a slow decline next couple years, until the ecoNomy or wages rebound.

Despite lower rates coming, banks will probably not allow their IO lending to pass 30% this time round and servicing not gonna go back to what it was before.

 

Where's 'here'?

 

APRA shuts down increased borrowing capacity....

Westpac caves in to APRA fury

 

APRA is most likely about to reduce restrictions on lending criteria, Westpac just jumped the gun.

Whilst it seems that our economy won't have the same excellent performance that it has had since the 90's, if you're buying well located, good size blocks of land as close to Sydney CBD the development of apartments barely matters. Supply of land can't be increased in inner suburbs and people who own houses on 500sqm+.

Australia is so young and is still growing rapidly in population. Plenty of room for increased demand on housing despite weaker economic conditions.

 

And Interest rates dropped from about 16-17% down to the the current rate of about 4% .At best in the future rates might drop by another 0.5%
Over the next 10-15 years interest rates wil virtually go no where , or maybe even up.
You also had really good wage growth for well over a decade that was running at 1-2% above inflation to about 2012 and banks could just keep on writing out bigger and bigger loans.
I would love to know where the future growth is coming from without any downward movement in interest rates evert time our economy gets into trouble.
Most importantly how can banks write out bigger and bigger loans for customers that are not seeing wage growth.
Are we just wishing for a return to easy money from the banks.

 

Economy is not in good shape now. And you can find lot of small land houses and apartments here. There is no reason for them to grow. I am talking in general in Sydney, it will have phase-2 falling price for next 12 - 18 months. I am not talking about only 500sqm+ land. And if you say Australia don't have enough land, go and see 40 km, 50 km, 60 km... from CBD. and what stop you to go and look at 100 - 200 Km from Sydney CBD. This will happen in next 10 years.

@John_BridgeToBricks is professional buyer's agent. He should be an expert on this area. He will advise.

 

Ahh yes the 2 simplistic arguments made by young RE Agents to encourage buyers...

1) They’re not making any more land
2) population growth will save us all, don’t worry about oversupply

 

Have

 

If Australia's economy was in the same state as Japan's (which also has little spare land near major cbds) I'd believe that we'd see negative or flat realestate growth. The facts though are that Australia is one of the fastest growing countries in the world and is doing just fine for a Western country with GDP growth albeit lower than previous decades.

To that effect I highly doubt we'll see property performing as it has done over the last 30 years but also highly doubt that it'll be negative over the next 10 years.

 

try telling the pollies to import more immigrants, given the current stagnant wages growth and unemoyment rate.

 

The "population is increasing strongly so we can't have a property crash" is perhaps the most historically ignorant property take out there on why we're different to places which had property crashes. Look at all of the places that have had property crashes and they've had big increases in population because big property bubbles lead to big construction sectors requiring lots of skilled labour which is cheapest to import.

Look at the places with property crashes:

Ireland - at least 1.6% population growth from 2002-2008
Spain - at least 1.6% population growth from 2003-2008
Florida - close to 2% population growth from 2001-2007.

Now this isn't in any way evidence that we will have a property crash but saying population growth means we can't have one is completely blind to history. A couple of obvious truths:

1) very few new immigrants buy houses in their first few years in a new country so migration doesn't sustain house prices to any significant degree.
2) If demand for a place to live was the driver of house price growth rents would be increasing at a similar rate. They haven't come close in recent times.
3) if job prospects fall then immigration will significantly slow so even if migration did sustain house prices (which it clearly doesn't) then it wouldn't prevent a housing crash since this would likely disappear in any significant slowdown.

 

The politicians don't care about public sentiment towards immigration. Both major parties support immigration but they have both learnt not to talk about it since Kevid Rudd's 'Big Australia' backlash.

Low wage growth is a trend set to continue.
https://www.abc.net.au/news/2019-03...ng-the-smallest-pay-rises-since-wwii/10942530