Unprecedented plunge in housing market confidence

Discussion in 'Property Market Economics' started by Peter2013, 17th Apr, 2020.

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  1. Peter2013

    Peter2013 Well-Known Member

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    Housing sentiment collapse: Survey shows biggest monthly fall in 47 years


    The “time to buy a dwelling” index dropped 26.6 per cent – the biggest monthly decline on record.

    I suspect there are a few highly leveraged Mum & Dad investors who are not getting any rent and probably not that far off Bankruptcy.

    For the seasoned investor, we could pick up some bargains in 6 months.
     
  2. standtall

    standtall Well-Known Member

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    Entire Australian real estate market is overvalued i.e. yields don't support asset values. Until now there was a reasonable chance for wage growth to kick in and make it all worthwhile. Now that hope is gone for foreseeable future.

    If you can hold for 10+ years, things will definitely turn around but you will be bleeding too much cash (negative gearing) in the process, making this an entirely foolish exercise.

    For the 'seasoned investor', it's time to get rid of low yielding, cash sucking assets and diversify risk across other assets such as stock market if they know what they are doing.
     
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  3. 2FAST4U

    2FAST4U Well-Known Member

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    There seems to be an increasing supply of rental properties throughout Sydney.

    Latest figures from Domain today:

    Sydney Region- 19, 160 properties for sale.
    Sydney Region- 29, 998 properties for rent.
     
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  4. wylie

    wylie Moderator Staff Member

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    Any idea what the figures were before Covid?
     
  5. 2FAST4U

    2FAST4U Well-Known Member

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    I'm not too sure. The figures are strange in that usually you would see more properties for sale then for rent. Take Melbourne for example. Similar population and the figures are pretty much opposite.

    4000+ Rental Properties in Melbourne Region, VIC | Domain

    Melbourne has similar figures to Sydney but they are reversed.
    29k properties for sale
    18k properties for rent
     
  6. Omnidragon

    Omnidragon Well-Known Member

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    Be lucky not to tank 20% plus from a month ago I think
     
  7. 2FAST4U

    2FAST4U Well-Known Member

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  8. DrunkSailor

    DrunkSailor Well-Known Member

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    Ok is this the same index that keeps contradicting the market? As in, when people say it’s a bad time to buy the market goes up and vice versa? There was a graph like that being shared around during the 2018 downturn and correlated with the recovery in 2019 if I recall. I think it was US based though.