NSW Sydney prices still falling...

Haha indeed. I suspect @standtall may own an apartment in one of Sydney’s ghost towers and is desperately hoping his anecdotes about strong market encourage ppl to ignore Sydney’s 4yr high vacancy rate amongst other things and buy right now!

 

Read my post again .. go and check sources I have mentioned..

 

You really have a vivid imagination hence I correctly termed this thread as fantasy league.

I won’t comment on what your circumstances might be to be fantasizing 20-30% price drops.

 

This is why Sydney isn't recovering any time soon. Buyers just won't bid up prices when supply is this high. Rate cuts make it easier and cheaper to take on debt, but if buyers are looking for an apartment and there are brand spanking new apartments piling up on every street corner, as far as the eye can see, then a cheaper loan is not what they'll be shopping around for.

Ireland is a good example of this. When rates were cut near the beginning of the downturn (before unemployment soared, before recession) it didn't bring back the Celtic Tiger. Because was never going to, however much the cacophony of real estate agents, ministers and bankers insisted it would. The idea rate cuts would save the market was a fantasy (moreso because the same grand plan had already failed in the States a year prior, for the same reasons).

Ireland was swimming in apartments and semi-d's and new estates. There were more and more going up every day, and as supply overtook demand, developers were forced to discount, which drove down prices and turned off investors and depressed demand even more. Then the construction jobs started disappearing, as new projects were canned.

Prices go up when supply is low. Prices go down when supply is high. And Sydney has a snowball's chance of recovery till, at a minimum, the oversupply is absorbed and that is a couple of years down the track on even the most optimistic view, and that view is looking more unrealistic by the day given the economic indicators we've been seeing.

 

Um we’ve had the 20% in Sydney over last 2 years... as to whether it hits 30% off peak only time will tell...

Try and stay balanced out there sir.

 

There is not even a single monthly increase in Sydney.

Not. one.

Prices fell in May. They are down so far this month and we’re only 11 days in.

So how micro do we need to go to get a positive reading? Hourly?

When the facts change my opinion will too, but theres just no compelling evidence of recovery yet.

 

Not really fantasy when plenty of Sydney has passed -20% already...

 

Thanks for the commercial property insights

 

Hourly property indexes

 

I think both viewpoints are fair and largely the difference in viewpoint comes from the way one looks at things.

Its 100% accurate to suggest that current data is showing that prices continue to fall in Sydney.

One can draw conclusions from the raw data and suggest only that the 'recovery' has slowed price declines, but has shown no real tangible evidence of prices rises or even stability so far. @berten's spot on here. Clearance rates, auction values, loan values, stories, my own personal anecdotes etc - they MAY point to things that are happening, but right now, the data & real evidence doesn't back it up.

If you want to buy at a theoretical low point in the market and hedge on indices, than you may be able to wait a tad bit longer (possibly).

Flipping from a more scientific/econcrat way of viewing markets and looking at it is a pure investor and seeking opportunities and understanding how individual purchasing decisions are made, its easy to see where your coming from @standtall. Lots of areas, particularly OO markets, IMO buyers are paying a fair bit more already. While you may be able to buy at the macro data trough, you're probably not paying the micro trough of the individual property your looking at when theres 30 people at the open home your going to.

IMO, and this is completely unproven so far, the data will reflect this transactional behaviour in coming months once the data flow through.

 

There are markets within markets....
Seems palm Beach and Avalon doing the opposite...have not come down yet in the last year I assume from data below?
http://house.ksou.cn/p.php?q=Palm+Beach,+NSW

 

That market is very unique, geographically limited supply and super expensive. Not sure it’s a valid example of Sydney market trends. I take ur point though.

As for a recovery, I have no idea why anyone would follow daily indexes and think they can glean useful early trends. If you can - go share trading with your skills.

Until I see a positive quarterly result in Sydney, I expect a slow alternating trend between downwards and flat for at least a few years.

 

Really appreciate your objectivity and considered opinions on here @Redom

At the current point in time what I'm seeing in the markets I follow (in Melbourne) reflect what you've said. Quality properties have achieved some great prices in the last couple of weeks while B grade properties are still struggling and therefore probably contributing to the sliding median prices.

Whether the rest if the market follows is yet to be seen. I can see arguments for both ways, but "markets within markets" is probably more relevant now than ever.

 

Having spent time on the ground in the inner West in Sydney I can tell you that good properties are still doing very well

 

Compared to when, 5 years ago, 2 years ago, pre election?

Some on here like @standtall will try and argue that there has been a big change in sentiment since 945AM today!

 

100% of 0.45 percent point fall is between 1st and 18th May i.e. before election. If you are keen on looking at monthly numbers, look at last 30 days.

See the above comment. If you have any post election numbers supporting falls with 100% accuracy as you claim , I would like to see that data.

Here is the publicly available data on all 3 primary data sources (each one is indicating recovery):

- Corelogic index bottomed out at 151.0 points on 17/5. As of today, we are at 151.46 points. It's not as pronounced as some people may have expected but it's not falling.
- Sydney asking prices are 3.1% higher in Sydney this week (3rd week in a row).
- Auction clearance rates are consistently up (mainly driven by Sydney). A decline in activity last week was due to queens' birthday weekend and it's in line with typical slow activity on long weekends.
- Average sold prices at auctions are consistently rising in Sydney for last 3 weeks with quite substantial jumps.

If anyone would like to delude themselves by believing that price recovery hasn't begun (for whatever reason), I am not keen on popping their bubble. This is publicly available data, you can choose to make your own conclusions. Whatever floats your boat works for me!!

 

I agree, I don't follow the property market monthly, just review and look at my portfolio yearly.
Interesting article although more general in nature I read today:
House prices to start rising 'modestly' in 2020 - Chan & Naylor Property Business Tax Accountants

 

But almost 100% of the "improvement" is a single 45 point data spike on the 19th (which had nothing to do with the election). Since then it's been up and down on a daily basis, and today if it weren't for that spike Sydney would be flat. This is a general improvement but it's been underway for the last few months because of the time of year, and it started well before the election. Price falls have been slowing for the entire Autumn period. Which happens every Autumn. The image you posted it great for showing this seasonal improvement in terms of clearance rates, and coming into Winter supply tends to go through a bit of a curtailment (helping demand) as most sellers hold off till Spring. We won't be able to tell whether there's been a recovery till well into Spring at a minimum.

 

No @standtall has observed a spike in the High Frequency intra minute hedonic Sydney property index, therefore the delusion of recovery may continue for another 34 minutes till the next dip in data LOL...

Talk about wanting to believe something bad enough

 

As much as the recovery theory sounds nice, I think oversupply is the reality we're facing. I also worry the exclusion of off-the-plan transactions and a lot of house-and-land packages from the hedonic index is masking the seriousness of this problem, and these are the parts of the market most likely to be making a loss.