What was the reason for the last boom in Melb/Syd?

There was a boom in property prices beginning around 2014 to 2018 in the Melb and Sydney markets. They seem to mirror each other.

Do people remember what the cause of this boom was?





From looking at this chart it appears Perth and Darwin buyers left that market and went to the Melb, Syd and Hobart markets. Is that what happened?

 

Immigration one of the major drivers

Melb number 1 for pop growth at this time

 

Oh interesting, I figured immigration rate was constant. Did a drop in immigration rate also explain house prices dropping?

 

Not just immigration perse but high income Chinese buyers who were sinking $$$ into "safe" havens.

 

That's interesting. Has that been stopped now?

 

and Chinese Australians as well and that's how the boom spreads over to other suburbs and cities

 

Look at sydney from 2001 to 2017. Could be just reversion to mean.

 

Low interest rates.
Close to a decade of negligible growth in property prices.
Investors having paid down debt since previous boom, i.e. ready to draw equity and buy more.
End of mining boom which had funnelled investors into Perth market.

Population helped but it wasn't like there was no growth prior to that.
Therefore, I believe it has more to do with the above.

Overseas buyers also helped to push the price up buy over paying.

 

Have you looked at graphs of population growth? The last time I saw one showing population growth in all the states, there was a very clear correlation between population growth and house prices in Victoria...

 

Here are the percentages going back to pre GFC for Sydney.
Doesn't seem to be a great difference. Before that it does drop off a bit so I guess you can argue the population was building up over the 7 years to 2014. I still think cheap and easy credit had more to do with it. But all things did combine for a pretty good run.

2020 4,926,000 1.38%
2019 4,859,000 1.40%
2018 4,792,000 1.78%
2017 4,708,000 1.79%
2016 4,625,000 1.78%
2015 4,544,000 1.77%
2014 4,465,000 1.80%
2013 4,386,000 1.76%
2012 4,310,000 1.79%
2011 4,234,000 1.63%
2010 4,166,000 1.63%
2009 4,099,000 1.64%
2008 4,033,000 1.64%
2007 3,968,000 1.64%

 

This was the major driver

 

This was a significant boom cycle For Melb and Syd, I thought APRA would kill it, but drop in interest rates continued driving this

here’s a topic about this, blast from past

What will stop the BOOM in Sydney and Melbourne

 

Your talking about Chinese foreigners buyers
Thats the perception but its actually very small % in the scheme of things

Chinese investment too low to be the driver of soaring house prices, study finds

Also Melb tightened this, government changed laws so it became harder for Chinese to buy

I am not expert in this but I think they also limited to new product

 

Professionals from India immigrating buying up in Western suburbs Syd, this I believe is where the boom started, around 2014 Blacktown etc.... it was affordable housing

From history? I think booms usually start close to city, however this time it was different. I was playing in this market at this time

 

In Melb during this boom cycle, suburbs with excellent school zoning went nuts

This drove prices north, I recall Bentleigh, anything in the McKinnon precinct was highly sort after..... there were others

 

Around my area it was the wealthy Chinese. But Indians in Western Suburbs of Sydney certainly would have been a factor too.

 

I suppose the boom happened for a reason or reasons. I'm just glad it happened. I remembered when the 2013 boom started.

Yeah it was a great feeling but there were so many lost opportunities. Property market in Sydney's west was quite boring actually.

I remember the Dept of Housing were auctioning off their Mt Druitt properties really cheap and then all of a sudden kapow. Prices took off out of the barriers!

 

I think the chinese in melb play a big part. Every suburb they prefer is more expense than the others. Local chinese still get alot of money from family in china. Also one child policy means 4 set of grand parents 2 set of parents all funnelling their generational wealth to a single couple $$$. And these guys do not low ball! Those overseas also buy the new builds.

Add to this rising wages and borrow capacity. The rise of the significant investor visa, every richlister becoming a property developer, govt policies backing the industry. And overnight millionares like Andrew Bogut and those who made it big in farmland rezonings buying up all property they can handle then we've got a boom on our hands.