Sydney - the coming correction 2018-2022

Turn the light off when you leave will ya?

 

Property has to go up every year uninterrupted for an someone to be right (or wrong)? I am "long-Sydney" and a "Sydney bull", but I fully expect prices to go up and down. That's just understanding markets.

 

@John_BridgeToBricks , are you a Sydney BA?

 

Yes.

 

PM sent

 

I dunno about Druie, i have one in nth st mary, but i assume it is dropping like most others. What was a bit frustrating though was it was vacated end of Nov and it took just under 2 months to get a new tennant (inc a 25$ a week rent drop).

I grew up and have interests in nowra too but not sure why a baby boomer would want to live there!!

but yeh i dont post or read much as banks won't lend so can't buy (not that i would now anyhow) and don't plan on selling so I dont follow the market etc.

there is a difference between opinion and being a god of property who can foresee all. I will keep an eye on shellharbour for you though in case your crystal ball breaks (some more)

 

Never said said I was the god of property...it just comes down to cycles which you learn over 3 cycles.

The drops in St Mary's is not surprisign...a $25pw drop is nutin...seen people take over $100.

Shellharbour has really surprised...I don't get why people would move down there...but apparently a lot of retirees from Sydney - know 2 people who have moved down that way ....1 sold a unit in Sydney Eazt for $950 and bought a house for $590k in Kiama...other moved down to Berry over 3 years ago ...sold a place in Castle Hill for over 850k...thar you go....

 

Lot of Syd people moving to Orange and other Central West areas too, has nothing to do with what we think or like, people do different things and these days bunnings and big supermarkets are everywhere along with the world online that delivers everywhere.

 

I am not missing much.

I bought my first property by myself when very young, and am not so young now. I have at many times had zero property too.

You do not need to hold any property to understand the simple mathematics.

There are many analogies, but will spare all.

The reality is, no one, not you, me or Sash could fudge the numbers to make it work atm, nor can anyone else, when it will be a leveraged buy and hold.

You know too, it will be a loss making effort, even if the market was still or slightly increasing.

This is my point, and I believe Sash looks at it the same way, no emotion, just numbers.

 

Exactly! Why would any investor purchase a dwelling that takes money out of their pocket each week and has no capital growth potential for the foreseeable future!!! Sydney will drop another 20%.

 

Hi team,

I have no doubts about your success in property and there are many ways to skin a cat.

My only comment would be that being guided purely by mathematics is a very static way of looking at real estate investing. It guides you inevitably to yield and therefore regional properties, when capital city real estate typically out performs.

Buying with the calculator is but one ingredient in property investing. Other factors include demographic trends, and the development of upcoming infrastructure. The land size of a property also typically reduces yield, but that doesn't necessarily make it a bad investment.

For what it's worth, Sydney won't drop another 20%, (for all of the reasons previously mentioned on this forum) though it will likely edge lower from here.

It is very strange reading a forum so hostile to the Sydney market, and it is odd having to defend one of the most stable and premium property markets in the world. Anything is possible, but there is just no precedent for the sort of bloodbath being discussed on this forum.

Good luck, and happy investing all.

 

Hi John,

I am not part of any team, I act alone.

I have owned a few properties in Sydney, I also have outside, ATM I would not touch Syd with a barge pole, you yourself concede to possible further drops, I am convinced there is more, and then you have a path back which will likely be flat or very slow growth.

So, blind Freddy would sit and wait if leveraging and just a regular buy and hold.

There is zero reason to go into a known loss making proposition atm, it has nothing to do even with Sydney, this goes for anywhere and or anything really, ego and emotion aside, this is the reality. If you do not care about the numbers and costs, well, I say quit

I see how a buyers agent may not want to say these things.

Here ya go, how many are you buying this year for yourself to just hold and then sell in the future ? zip would be my wager.

 

How will you know when the market has bottomed?

 

This is a nonsense, usually put forward by those that have never even ventured out of the main capital/s.

I had very good % returns elsewhere with actual zero hold costs, people do not need to believe, at the time, if I had the same dollar amounts in some other places that I had in Syd, the return would be fantastic. An Aus dollar is an Aus dollar anywhere in Aus

I will conceded I come from a place where I simply cannot throw money away, or take on loss making buy and hold IPs.

 

I wont.

But seeing you attend properties opens etc, it is not hard too see when conditions are changing.

 

You do not also need to get in at an absolute bottom, while I do not always agree with @MTR , I think getting in when there is sufficient clear signals that you see yourself to warrant moving is a fine approach.

It also depends on what hold costs are like, if it gets to a point where is nuetral, then I would be saying...well, ok.....lets see how money is going.

Cause you have that against you ATM as well...

 

Also, keep in mind, I am coming from a perspective that this forum has investors that are a bit more advanced than say average mum and dad or those that rely on others to do research etc.

I can totally understand why someone may get in, or use a BA etc in Syd ATM, but trying to tell people here to do it........yeah nup....you can stop it or cop it....double demerits from Sarge @datto on as well at momento.

 

When you hear woes of investors who are going broke .....people who bought in 2016...2017...2018...and have sold at 100k plus loses and have had to sell their PPOR...because they invested aggressively in Sydney.

I picked the opposite in late 2015/ early 2016...when auction clearances were crazy and price records were being broken. Really not rocket science if you read the papers....just have to remove emotion.....

 

Holding for short term resale is a tough gig in most market's as at median prices of East coast cities you can be up for $100,000.

So tough.

But don't forget for some property is a necessity not a commodity.

A family doesn't want to move every year may have school commitments and so on.
So many will buy in any markets.

 

$590 in Kiama is pretty average as in an older house with some distance to water.

But it's normal when you are living in a smallish apartment in East and you want space in a nice area you have to look outside the city. $590k in Sydney by ythe water will buy 30% of a house.