What will stop the BOOM in Sydney and Melbourne

Honestly I think USA is going to enjoy a natural return to boom times. For the next several years at least, they will probably do quite well - especially if China finally blows, ad China is now packaging dodgy mortgage debt just as USA did right before the GFC. That and they've got tens of millions of ghost dwellings, in over fifty cities, as well as rapidly rising bad debts from zombie companies (government run companies with are in debt and losing money). USA from what I can see is (in parts) in a very early housing bubble. If they can get construction going and if they can encourage housing investment, that bubble will probably grow and as a bubble grows prosperity comes with it. Hopefully that will grow government revenue and can help a shift away from more government debt, replacing it with private debt. Or the whole thing could just blow up in everyone's faces - I'm really just prognosticating here.

Might be a good time to own US property though.

 

Totally agree, we are actually on the ground and seeing property markets continuing to boom, its not a matter of if .... as was the case when we were buying in 2011 as inventory is low and demand is high.

This is now the first phase of building, which means that building new product is now making sense because property prices have gone back to 2007 peak days and continuing to rise.

Very interesting times for US market

 

Is Atlanta a very high performing city with heaps of high paying jobs, nice lifestyle areas, a destination for people to travel from other parts of the states and even other countries?

Does Atlanta have scope to keep growing in terms of commercial opportunities offered?
Is Atlanta potentially artificially supply restricted, due to a difficult planning process and limited geographical land to use?
Are people in Atlanta amiable to multi-residential unit housing or is it a matter of "no choice" but to do it?

Are there limited "alternative options" to Atlanta, that aren't similar enough to steal a bit of its thunder?

These are all important questions to ask to see how sustainable it is, chances are its not a bubble.

If you were to pick any high performing major Western City in a skilled-immigration friendly country (e.g. London, Sydney, New York, San Francisco), their answers will be extremely similar, to each question.

 

No idea about New York, San Francisco, these markets were never on my hit list because the entry levels were way too high at the time when I was buying in USA and they were never going to give investors cash flow.

Atlanta is not a small city, and as I mentioned inventory is down. What happens in the future not sure, but I see blue sky at the moment and when I was buying it was doom and gloom even though was just starting to rise.

There are other US States other than Atlanta that are attractive, but we are playing in Atlanta because its a good/strong market, and we understand this market. I would rather reduce the risk at this point in time, but who knows down the track.


Here is a link from Business Insider and other cities that may interest some, gentrifying is what is happening and also what Trump is talking about when he mentions rebuilding inner city communities



The 13 hottest American cities for 2016

 

Personally I think even places like San Fransisco will keep rising a good way yet - for example rents there are extremely competitive and rising. Good indication there's a lack of supply. People calling bubble now in USA are like Steve Keen in 2006 - right but way too early.

 

The crash in Sydney is here already - Houses overlooking the harbour can be bought for roughly 50 smashed avo brunches!

62 Gilbert Street, Dover Heights, NSW 2030 - Property Details

 

They do not use kilometers per hour, they would whoop you for talking like that just for fun

Have you any idea how they drive over there ? it is not a nanny state even in what they call Kalifornia. They do not need more speed, you literally have to cane a 4cyl to be able to join traffic on many motorways.

 

Westpac increases interest rates

Maybe this may stop it. Not sure if anyone has already posted this link

 

lol someone else beat me to it on a new thread

 

All it requires to stop property boom is interest rate rises. Nothing is more effective than that.

The only thing is that it won't just stop Sydney and Melbourne. It would also stop other state capitals unless those smaller cities all of the sudden has a huge number of jobs.

 

Workshops dead quiet as jobs dry up

This entire article must be read to the very end. It's the most important article of the year. Print it out and read ten times till you understand.

Property Investors must finally come to realise that they need to diversify. If they don't the very things that are keeping their properties valuable will be taken out from under their feet.

One cannot have a monoproduct economy with all the debt in the world supporting that one product and then being surprised that the entire economy is tanking. That monoproduct in Australia is real estate.

It's like going to a fruit and vegetable market and having every buyer buy only apples and taking on debt to buy apples and leaving every other fruit and veg on the stalls untouched. In the end all you will have is apples at the market and then everyone gets sick.

Only intelligent people will understand the above.
I have started to sell down and will be investing in Australian manufacturing and high tech and property in prime Perth locations. I have a property now in South Karrinyup south of Karrinyup road.
I will buy another soon just waiting for a stock rally that we are riding to come home.

 

Well, rate rises are already a reality now. Some major banks like Westpac just hiked rates up to 60 basis points. If Australia is downgraded on 19 Dec this might mean more rate hikes, too - and USA will almost certainly hike too on the 14th. The era of low, low rates is pretty much over. The RBA should have saved its last two, because now it has very little room left to cut further. I seriously doubt it'll go lower if the rest of the world starts going up.

 

Another new high for Melb, $1M over reserve.....wow

Unliveable Box Hill house sells for $4.5 million at auction on super Saturday

 

I just hope you don't have all your eggs in one basket...Perth.... ouch

 

The auction market is interesting, because the clearance rate honestly doesn't seem to reflect the sharp slowdown in price growth shown in APM's, Residex's and the ABS's data (CoreLogic's is questionable at best).

I'm wondering if a lot is being withdrawn/sold prior to auction if there's little interest, to avoid lowering clearance rates? Are agents encouraging only the properties very likely to sell to go to auction? Are they setting artificially low reserves?

If you look at super Saturday for example, last year there were over 3700 auctions and the clearance rate was in the low 60s. This year auction numbers fell sharply to 3300 and the clearance rate was in the high 70s, yet according to SQM in August (I don't have the more recent number) total annual property listings were up almost 14% on the same time last year and climbed unusually quickly through winter, especially in Sydney - and that big increase in total listings is a picture that seems to fit much better with what you see when browsing suburbia.

New suburbs or suburbs with a lot of development seem to be showing a trend where listings far outnumber actual sales in the past four weeks. Allhomes is a good site to use as for any given suburb, you can get a feel for what's sold in four weeks compared to what's listed. In a lot of cities what's on the market seems to far outweigh what's actually selling. Some newer suburbs or apartment-heavy suburbs are just insane - often hundreds for sale with a handful actually sold in almost a month. So I'm not sure clearances and "above reserve" sales are giving us the full picture, even though the media loves them.

 

This combined with tightening of finance may be the game changer next year?

 

Normally apartments do not go for auction in Melbourne in suburbs where there so many of them. The major exception being the "the block" which sold for 2+ million in pt Melbourne.

It is near impossible to target so many suburbs and be on the ground in every suburb. As for the suburbs I look at, nearly everyone goes to auction for houses. In Asian demographics suburbs, villas, units, houses all go to auction - u go back 8-10 years ago and it very much private sale back then. Last few auctions in suburbs i look at saw prices 1.34million, 1.1 million and 1.6 million what was below a million dollar price houses with multiple bidders (Italian, greek, Turkish, Chinese, Vietnamese etc). If you combo all the suburbs of course the figures will be skewed as you are only including all the suburbs that do not do well (macroeconomic view) and ones that do well with the overall property market. In certain suburbs where demand is high for schools, being close to public universities itself is something that demand I find is always there irrespective of during boom or slowdown periods. I went to this apartment display showroom in bundoora and already 70% sold out only 2 months being on the mkt.

 

The only places in Australia I am not worrying about is especially Perth, far less so Canberra and Northern Territory.

 

A place next door to ours went on market as auction or offers prior, sold by normal sale with cooling off, is not complete as yet, yet is shown as sold at auction under the hammer.

I should go see if it was on the list, but the list published is wrong anyway, not all agents report, let alone report correctly, it is a snapshot guide only.

 

The CoreLogic November 2016

Ouch... What happened to Melbourne???
Be very interest to review these stats in Feb 2017, holiday season may not reflect too well on the figures for all States?