NSW Units forecast to go down in Sydney

House price growth to slow sharply in Sydney, Melbourne: NAB

 

Nah... I reckon units will do better than houses in Sydney in 2016 because units are relatively affordable... but houses arent.

 

1 percent growth I would be happy with.. Someone mentioned here that units in mount druitt would crash to $250k.. (Currently around $330k). That sure makes gave me a startle

 

For those that dont remember or those who havent seen a cycle here is what may occur:

1. OTP and construction projects underway (see all those sites being build when you out on road??) will come to completion between now and September. Oversupply v's demand.
2. Buyers will be spoiled for choice and take their time to negotiate. Some sellers will be firm and others desperate. REAs will now earn their money rather than have it thrown at them.
3. Prices will shift down. Initially flat it will increase to become a slide down. Not a landslide just a tip of the scales. Varies by agency and project initially but eventually agents and buyers all work it out. $20K price falls become $35K and so on.
4. Desperado's with no scope for finance will bail wanting to protect losses or take minimal profits. REAs call these motivated vendors I believe.
5. Banks will instruct valuers to go conservative
6. Banks will embargo projects, post codes and project types (ie studios) in some areas of mass supply. ie either no lend or impose a max LVR say 50% (example)
7. Rents can follow depending on supply factors. I would tip rents down, not up BUT its not guaranteed.

Units in Sydney are likely to be harder hit as this is the FH buyer and stamp duty concession belt that has motivated demand.

Some vendors will just pull sales and rent them out. This could trigger a GST problem for them if they have claimed the GST on the build !

Every area will be affected differently. Some areas will remain in demand. Some may be down minimal and others will get smacked. Opportunity for buyers. Opportunity too for sellers remain....Quality may overprice it or may assist to sell.

 

I wouldn't count on it. Buyers could be spooked with all the negative press on OTPs and shoddy apartment builds..

 

Its going to be interesting! Short term though, next 6-8 months, I still think most units in Sydney will perform.

 

If there is going to be a correction in units, any thoughts are how long it would take for prices to moderate, and then outlook from there for the next 3-5 yrs?

 

Ask twenty economists and they will all guess differently.

 

You are harsh with the word "guess".
Common these guys have degrees and phd and mba coming out of you know what, and years of track records with their fearless predictions

 

You forgot to add this