Watching the Druie Drop in Slow Motion

#Sash where are you getting this information? I was actively buying in 2010 and the only ones I saw that went for $180K were Owner Occupiers and they weren't doing quick reno's and renting them.

SeeCh can you provide more info on this- Next peaked around 240-250 and dropped back to around 160-170. What year was that (maybe before my time)?

 

Travelbug....Seech is bang on the money with his previous comments...that was my observations in the different cycles. The Druie has boom bust cycle.

For example...when I was buying the Dept of Housing (mostly 3 brms) stock 2009-2010 these were the prices:

Mt Druitt suburbs: 180-220k (depending on the location and condition of the house)
Woy Woy: 220-260k
Gateshead: 160-180k

You are correct some had Owner Occupier clauses in the Druie...but some of them did not. Some of them were removed later on. Far as I know Woy Woy and Gateshead did not have these restrictions.

I think the new price when the adjustment happens will be around the 300-340k mark. The real consternation will happen when rates rise. ...but in the short term I can see it get down to 350-400k very quickly...ie. within 12-18 months. I don't think we will very many under 280k unless it is force sale...or fire destroyed. I can however see some really rough ones sell for under 300k. This is based on my experience.

By the way...this happened to stuff in Logan also last cycle....

PS---one of the reasons why created this thread is to reflect on it in 2 years. I might have to eat my words.....

 

But we're not talking about Woy Woy or Gateshead in this thread. This is about Mt Druitt and Travelbug is right. I was keeping an eye on prices at that time. The cheap prices were the OO ones. A few normal ones got through at $170-180k at the Ex-Housing department auction. But they were well and truely few and far between. By far, most stock sold (even at auction) was well over $200k. I was there! I saw it!

 

Considering about 3-4 years ago you were picking up houses for $220k..and now they are 450-480k...that is a gain of over 100%. If they come back down to say 320k....that is still a gain of 45%!

 

Yep...but they were there...even at 200-230k...them selling now for 450-480k now is still a 100% plus gain. Guess what happens next.....if you picked one at 220k and it comes back down to 320k that is still a 45% gain in 4-5 years. That is a lot...natural state of the market.

I feel that people are underestimating what is going to happen. If I was to draw a parallel it would be the higher priced properties in Perth post mining boom which I am observing now. Stuff which was selling during the boom years for $1.1m-1.2m is now around 900-950k in some suburbs. I can even see it hit 750 at some stage........

 

@datto - you're conspicuous by your absence

 

No, no .... It's taken me this long to pick myself of the floor coz I was laughing so hard.

I just can't see the prices go back down that low. That's Central Coast type of price.

I just hitched my way up to Charmhaven (and surrounds) this weekend.

There are some cheapies up there but the lake stinks so bad you keep checking you shoes to see if you walked on something nasty.

I'm tipping a low of 390K for the Druitt.

 

Body of a german backpacker?

 

We'll see...in another 3 years. where the number heads.

I say it will rest somewhere between 300k-340k....come late 2018 this will be the norm once interest rates move up.

People don't want to hear it...but that is where it will end up.

 

But Sash, you are not a local. I agree prices will come back, but I am sure you are off the mark with how far.

 

Or a darling from Darlo??

 

OK...let just watch and see how it unfolds...I could be wrong....people were saying that there was another 5-10% in the Sydney market when I said it was heading down in in July.

Time will reveal all...it always does.

Lots of properties with a 4 in front in the Mt Druitt suburbs...the question..is how long before most start with a 3 and then a 7,8, & 9 (i.e. 370-399k) ...in front. I reckon that will happen quickly....with 6 months.....from there it will take a few interest rate rises to see a 3 with a 0, 1, 2, 3, 4 (i.e. 300-349k) in front.

 

If you think prices will fall 200k you are dreaming. This boom wasn't even as big as the one in the early 2000's. Back then rents were dropping, now they are going up, huge infrastructure investment, rates are low and staying low for years, nsw economy is in good shape.

No big drop.

 

dud!

 

Read the thread....I see the bottom in the low 3s...meaning 300-350k as the norm...in a few years. Not saying this will happen by Xmas....but it is dropping fast. These suburbs always do. I think people don't seem to understand that a 40-50% increase in 4-5 years is really good. It is not like we are going back to 220-250k prices....thought it is possible a few might be under 300k via distressed sales.

What are people thinking...Mt Druitt is socially disadvantaged area....

I can also see some of these also transfer to the Hills District also...any suburbs where you had property prices increase by 200-300% there will be market rebalancing.

 

It may encourage people to seek bargains in the area when it's at the levels you suggest sash .

We've not bought in the satellite suburbs thus far. But looking forward to a buying spree next time the market starts rising which would be a fair way off.

 

40-50% increase is good but we have all been spoiled the last few years.

 

Mt Druitt will also get affected....for the record. So will most of the Western suburbs...the drops there will be determined by how much they went up and % of investors in the market.

Personally...Western Sydney had a higher % growth than most North Shore and Eastern suburb properties. This will be reflect also when the market declines.

That is the real danger...people don't think of the norm for the market...they think the out of norm levels will eventually need to be established.

 

S'ok @sash ...time the market = time sash's posts

 

And if the govt comes along and razes the area a la Minto or Landcoms plans for Claymore, what then? and according to that graph of Daniel007 prices did not fall as you state.