The garbage may be about to hit the fan in Sydney

In the middle of a serious downturn up here and can confirm it takes ages for the prices to reflect the reality.

In year 4 now and prices have only now started reflecting buyers expectations. But even then, only for about 50 percent of the stock. The rest is still, STILL asking 2013 prices.....

It's a bit like wylie-e-cayote running off a cliff......

From talking to other forumites here that is apparently how a downturn rolls. No reason that Sydney should be any different.

 

Well If I'm honest I'm only a new investor in Brisbane - well relatively new. Almost 100% of my properties only 2 years ago was in Sydney and I did very well from them. I sold a few to free up some cash to open a business/warehouse and the rest of it I used to invest in other markets that in my eyes have been stagnant for a while with big potential (i.e) Brisbane. So I started researching and a lot of it.

I found as a result that I like the potential and the holding costs of Brisbane property if bought right costs me ZERO dollars. I saw a plethora of investors from Syd/Melb flocking there and to test the waters initially only bought 3 houses up there. Test the rental, test the market economy and the likelihood of CG.

Well after 6 months I saw rental is not problem at all. In-fact i would say its very strong demand up there for house and land. I saw jobs increasing and unemployment figures drop and lastly I saw some CG on my initial investments (although not that much) on my initial ones I bought.

I think its now the perfect timing for Brisbane markets hence my trip there last week. It will definitely increase albeit at a more constant rate than exponentially like Sydney has.

Even Sydney 2770 postcodes. I was discussing this with a few people like 6 months ago they were saying its reached it peak and its going to drop within a few months. Its been increasing steadily ever since. Cant buy anything under $500k now and the ones that are need about $100k reno.

This entire postcode will continue to increase and latest prices havent even seen FHOB stats in yet as it hasnt been long enough.

 

if that is what is happening with 2770 then bevary. you get into brand new houses in melbourne for well underc 500k. 2770 is not a good area

 

Besides the point mate. So called "pros" saying its guaranteed to drop within 6 months blah blah you know how it goes. In the meantime I just made another $100k on the 2 houses I have there. And fellow investors who bought only 12 months ago have also made $100k on them.

Perceptions on areas change. Auburn, Parra, Blacktown, Doonside, St Marys, Mt Druitt - I grew up around the so called "hood" i know these areas very very well and guess what all the pros that didn't bank on these suburbs well plenty have made millions off them. Even Merrylands, Wenty, Pendo all these non desirables.

Just like 10 years ago. First house Mt Druitt. So called "Pros" telling me I'm a stupid as ******* its going to drop no-one wants to live there. LOL - got it for $220k now worth $700+k. Now I see those so called pros buying themselves in the Duitt. LMFAO.

Quite laughable really.

 

There will be a natural slowing, but you have the initial lending changes & the very real problem of lot of people, many who bought recently on the back of Syd property growth, buying more in Syd & banking on huge CG and IO loan that last forever, many I know are already feeling the squeeze & talking of selling if they cannot roll loans over (which of course they can't).

I think we, as a group here, often think of investors being people like us, but a lot of people are not across all the changes etc, it is what happens to the masses that matter.

 

No one knows exactly what will happen when.

But I think you make the very point, that many areas & many that are pretty average have had huge gains, many places to the point of where a pull back is even more likely.

I hope it does not drop or if it does, not by that much, but the potential is there as has been a lot of changes in short time, some sort of other external shock/s have the potential to do a lot of damage.

 

That is what people don't get.....the shock can be quick and swift.....I was on Melbourne only 3 weeks ago...lots of Sydney people there planning to move there. Why....they are all sick of the high prices in Sydney.....the wages there are not keeping up.

 

Ok, so it is clear to me what is happening, it is pretty much undeniable in the South West and all the way to may places I did not expect much closer in.

The changes are biting and I expect them to continue, no matter what you read, and if RBA starts hiking, as they would like too, well.......

I have people calling me often from open 2 years ago, but what is surprising, is I am also getting calls from interstate, so the lending changes may be going to bite down everywhere.

I also have been watching closely in areas that just recently started to really take off, but also now seem to be stalling, but that is too early to call.

I think people need to really think through and try and understand how lending changes have, for at least now, changed many markets, including those that should now be growing rapidly.

My thinking now is, to try and determine if Syd gets a big haircut and others stall completely, or if Syd just flattens and the others keep a modest, sustainable small % increase.


Not long ago many were pushing for much more.....like complete abolishing of NG.....eeekkk

 

Yep...agree dabbler.....prices have pulled back..and now going the other way.

In some parts like the NW, SW, St George, Canterbury-Bankstown, Liverpool and West agents are calling me.

It looks like Sydney is now run its course truly...matter of months before North and East are affected also.

Melbourne is another story.....

 

Clearance rate below 50%, its gone now in western suburbs

Auction clearance rates fall below 50pc in Sydney outer suburbs

 

That is due to less property being sold at Auction. TBH western sydney always had less properties sell at auction when compared to north shore etc....

Also it mentions North West? I dont know about that. Castle Hill, Bella Vista, Baulkham Hills, The Ponds, Winston Hills and pretty much the entire hills is damn hot still. I have many relatives in the hills area and I am there pretty much every weekend. All I know is every house for sale is sold within a few weeks. No Auction private sales.

 

I also know the hills area pretty well . . . agree still running on SPECULATIVE spirit.

Everyone expecting higher and higher CG. Eg in Kellyville ppl paying 1.5mn for a 600sqm block because well they might buy a neighbour down the track and put in apartments because such high demand from train station etc etc...

Once reality sets in that this million dollar loan will have to paid back while living in the sticks . . . prices will change quickly.

 

Yeah but that is where your view is wrong. The Hills is not exactly the sticks now. Its actually quite well regarded as a very good area to raise a family. Plenty of big big income earners there such as doctors, lawyers, engineers and surgeons. Very very well off ppl and wealthy live in Western Sydney now.

 

what clearance rate % you think the outer suburbs were, when Sydney boomed?

 

Not to assert anything and name names....but its interesting that there are a small handful of posters who are all over this (and the other Sydney threads) repeatedly doom and glooming the market. It almost seems personal.

To me, understanding their motivation would be far more interesting than their prophecy bc in all honesty, noone really knows where things will land. Yes we're past the peak and things are cooling off, as they always do past a boom phase. Heaven forbid, we may even see price falls across the board.

How about the same posters put their reputations on the line and lay down their insider knowledge eg x% price drop by end of 20... in suburbs like... a la Steve Keen. Not sure I'd want to wager a walk to Mt Kosciuszko though

 

Maybe they missed out on the Sydney boom and are wanting the prices to retract to then buy in themselves and wait for the next boom which is also inevitable. There is always motives behind either doom and gloom or hype. Thats why whenever it comes to property investing always trust yourself.

 

May be right @hammer but Darwin is a much smaller market, essentially a niche market that was very much pegged to the mining boom, LNG projects etc.

And population of Darwin = 150K, population of Sydney = 5 mill.

Comparing Sydney's future fortunes to Vancouver or San Fran would probably be a better case study. Both sought after international cities/gateways.

 

Possibly.

Maybe I'm a minority - I have props in Brisbane and the GC ( as well as Syd) but I'm not on the Brisbane/GC threads continually fuelling them lol. Que sera sera.

 

oh definitely agree with the demographic and that its a nice place to raise a family. As to whether apartment development justifies paying well above the odds 35 km north west from Sydney is what i disagree with.

WIthin 10km or 20km sure... 35km apartment boom in sydney.. hmmm

 

Considering this is a property forum,ACTUALLY i would expect the comments would be skewed towards optimism and bullishness generally . . . but whether that is statistically significant . . . hmm