NSW Sydney Update Please

So its either for sale with a price
Expressions of Interest
Auction with no price guide.

Isn't that what Vic is doing? Is that even working for them or just creating more disappointed buyers?

 

Not sure about victoria but will affect an already bad market in nsw

 

How much money is there? Pete Wargent

 

So, all this downturn and buyers disappearing and failing finances - they're all because of tightening banks regulations, right? I mean the benchmark interest rate to calculate serviceability is now 7.25% or something with max LVR of 80%. Regardless of what the RBA cash rate is, all these banks are sitting pretty imposing whatever regulations they want on home buyers / investors. It's all bank-made market conditions! Just makes me sick!

 

It is actually not a bad thing for the country.

 

It should have tightened slowly a long time ago, a huge boom is not really in anyone's interest, it was left for too long IMO in Sydney.

 

1. Townhouses and duplexes in castle hill, Rouse hill, Kellyville and the ponds for 950k on 250sqm are nuts. And owners who bought houses on 350sqm for $1-1.1m will prob cop it. I got land I'm building on earlier this yr in The Ponds and will have a completed 3 bedder+ 1 bed granny (standard 4 bedder split up) on a mid 300s block and dual income for 610k renting around $900/week. There will be lots of mortgagee sales in the higher end like last cycle (when looking at Kellyville homes that sold for half their price). Lower end in these areas is holding better than the higher end and still good demand under 850k. I'm seeing the $1.2m houses selling for $1-1.1m now. Some will come back lots more when rates go up. Median and overall price in these suburbs didn't drop much after last boom despite big mortgages sales when looking at stats.
2 bed units units in Kellyville and Rouse hill for 650k-800k and Castle Hill 750k-800k are nuts. They'll be rented for $500/week.
2. Blacktown. 700k fibro homes renting at $400/week. I'm hoping I'll buy it off them for 500k in a few years.
Mt Druitts surrounds- already seeing prices come back to last yrs prices for individual homes
3. My sister lives not far from here and there's a slowdown. No 900k fibro shacks anymore. More like 700-750k. Parra is speculatorville
4. Southwest will take a big hit IMO cause like 80% of the areas land and homes that have been bought haven't even settled yet. Same will happen in Marsden Park where the entire suburb is yet to be built. These areas didn't make the list of risky suburbs yet because there's barely any loans there ATM cause nothing has registered.
5. Don't know about this market. Out of my area.
6. Soooo many units in liverpool and parramatta. Campbelltown doesn't have too many. Unsure about city. Don't go out that way very often. I'm a westie .

 

Interesting...lets....see...

 

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I get that. My point is who's running the show here in terms of market conditions and economies? RBA or the banks? Well, the answer is obvious. How many times Glenn Stevens and the politicians had to try so hard / strategise / scratch their heads / debate on new policies to get house prices under control? Then, here comes the banks to just wave their wands, and ta.da.! No influence from policies or unemployment rates or immigration rates, etc. Economics = redundant subject?

 

I'm not sure your record of events is very accurate...

It is not the RBAs mandate to control house prices they have to take into account the economy of the entire country not just Syd / Mel.

APRA forced the hands of the banks by putting in place limits on investor lending amongst other things.

You make it sound like the banks wanted to slow the market and so they did. Not true.

 

Thanks @timetoact - I've been out of touch and missed about APRA. Are you referring to "
APRA proposes revisions to prudential framework for securitisation" released in Nov?
I wonder what the long-term impact of this would be for investors. Must read up some more.

 

Plenty of info on the APRA changes and the effect it has had on the market right here on PC

 

Didn't read the full thread, but his my personal take and view on the current Sydney market as of Dec 2015.

P.s I been out picking up deals for the last 9 month and have just bought 2 in the last 1 month alone ( Nov) both in Western Sydney ..it's def been easier with better pricing.

Overall ( Sydney) - clearance 55%

Inner city and inner west - clearance 82%, no drop in prices...price still rising at 1% per quarter

North West / North shore - clearance 40% - Slight drop in price, around 3-5% less than August 2015 ...so unit less ~$30,000 and house less ~$80,000-$100,000 ( But note the prices here are around $1.3- 1.7M in average so it's not a big drop...given it went up $500,000 in 2 years!)

South ( Hurstville etc) - clearance 50% - Stable pricing, no fall but no increase for the last 3 month

Lidcombe/ Parramatta etc - clearance 60% - Stable pricing no fall but no increase for the last 3 month. Slight sign of desperation has property sits on the market for longer.

Western sydney and South west ( Liverpool/ Fairfield/ Penrith and Campbelltown) -
clearance 30% - Price has fell and demand is less, pricing drop of around 4-8% with lots of room to negotiate.

 

and they're still asking for $1k-$1300 psqm for blocks of land in these areas!

 

@Mick C your Sydney buys this year, are they all development blocks? Just curious, why buying in Sydney in 2015

 

Interesting Mick. While people here talking doom and gloom of Sydney, in particular Western Sydney, you're actually buying there? Do you feel jumping in too early? Do you anticipate further falls as APRA tighten it's screws?

 

1. Just buy right...ie there's a deal to be found in ANY market.

2. I did go to over 80 inspections over a 9 weeks period and made offer on 60 of them, so hit rate is low as vendor are not that keen to sell due to low rate so no mortgage stress as per say ( hence more supply than demand) BUT in a sample of 80, 2-5 were very very keen due to their "personal situation"

3. Buying property is not like buying shares. If you believe in the "product" in the long term it will always pay off. But to be honest i wouldn't mind to wait a bit longer,but the deal was just to juicy to say no.

4. APRA has done what it has done, not much more they can do...having said that there is talk of one last change happening in June 2016, but it's gonna be minimal ..it's more for APRA to "Assess" where they are at now after 1 year and seeing which bank are "compliant"

I don't expect a property boom anytime soon..bu prices will stabilize at a 1-3% increase per year in most areas after 6 month ( which is inflation).

No they are not, they can be ( 560 sq, No easement, close to station etc...) ...but the intention was not for Development.

The price was right, i got a $100,000- $150,000 discount

But the vendor was selling for conditions of sales rather than price- needed to use my 10% ( ie deposit release) , option to extend settlement till they found a place for up to 3 month, Option to rent back a lot cheaper for 3 month and Sign 66W.

 

Warren Buffett — 'Be Fearful When Others Are Greedy and Greedy When Others Are Fearful'

 

With this sample, I am inclined to believe your numbers are accurate. The mortgage stress will only come when interest rate and unemployment are on the rise, but that is a future event that I don't speculate...
The 'personal situation' equates to 2-6% for the 80 samples. You really need luck, savvy and desperate buyer to make 60 offers to review those situations.

Congrats on your big discount negotiated. The negotiation strategy you adopted is really out of the box and clever thinking. It is a win-win situation for buyer and seller.