When Crazy Becomes the new High

@Natedog - burger flippers, cashiers, supermarket shelf-stackers, production line workers, photocopying assistants, typists & volunteer workers - ie general entry level jobs with no formal qualifications necessary.

 

There are probably some locals that are doing alright in that area too.

 

none, except you... I am working on it

 

Im waiting for Perth to play catch up. Could be a while

 

Sydney and Melb will turn. Just a matter of when.

Anyones guess.

 

Eastern Sydney... $4m is not unusual. If stock remains low, it will keep going up. I don't see demand coming off.

http://www.domain.com.au/news/ray-w...-were-bidding-from-the-street-20160830-gr4drr

"Eastern suburbs properties will always sell out because its buyers, mostly locals, don’t feel the economic squeeze and younger buyers will always have wealthier parents to help them out, buyer’s agent Jonathan Buchen said."

Include people with deeper pockets from overseas too. They might as well just buy the best...

 

I agree.
What happens with the asset "sale" in NSW could be a determining factor, will be interesting to see what happens to the economy.

 

I would think these prices in Sydney are pretty much the new normal. Maybe small dips but not significantly so.
Sydney is still the top dog in the economy and will continue to be that way for a very long time.

 

Maybe not for that long:
"The Government’s latest figures show a $7 billion budget blowout for WestConnex"
http://www.dailytelegraph.com.au/ne...s/news-story/3d2b60d03fff87acd6e3e2d4a52ec1f5

They were hoping for $10 billion from the asset sales. Even if they got that, there would only be $3 billion left after the Westconnex debacle. Sounds like they will get less since the Chinese bids got blocked. Not much leftover.

 

A 7billion blow-out for Sydney is like Brisbane losing $10.50...that is the difference between the two.

 

Might be able to afford it - for now. But the money has to come from somewhere.
If the real estate market dips, and they don't have the income from stamp duty and CGT... things will get interesting.

 

It's mostly a huge bubble in many areas. A shock to the system will bring everything back to reality. And the question I'm currently asking myself is...do I wait a little longer and let the bubble grow or sell up now.

 

It's quite strange how we get conditioned to higher pricing after a few months of prices at elevated levels.

For example, I witnessed an auction of a house that went for $1.8+ million on the weekend. (Agents were quoting well under $1.5m)

Only 3-4 years ago, I would have baulked at anything over $1.2m for an unrenovated house like that. Now $1.2m looks/feels cheap.

I suspect we're in for a few years of slow growth/stagnation but in general, agree we've hit a new norm with baseline prices.

 

Good thread. With everyone so bullish on sydney and everyone enjoying the ride of equity, I throw you a question:

With your strategy, be it buy or hold, reno and flip, add value, would you be buying now in sydney?
The second question will be, will you sell?

I think the above two questions will answer the question. You are bullish on Sydney because you hold in Sydney but would avoid buying now.

I think first home buyers who bought pre boom think that matkets will keep growing. With the equity in their properties, they can afford more and hence the increased sales.

Surprisingly, a lady quoted me, why dont you buy in Sydney?
My question was why? The response was, i bought one in Brisbane in 2011 and another in Western Sydney in 2012. Based on her 6 years of experience here, The property and money keeps on growing and hence she was looking to purchase third in Sydney. This comes from someonw who does not even knows about the concept of cycles.
I feel bad as even if the decline starts an year after, it is surely going to test some years of stagnancy (even decline) or pressure on people to pay. The most impacted will be these buyers.

I am on waiting mode to enter the market once I see some negative action. Lets c how the markets turn.

Cheers

 

I took action last December. People thought, prices have peaked, market is now falling. Turns out, it hadn't.
Perfect buy that was too good to let go. I also bought in Oct 2014 (generally a hot market) for a property that stacked up for me.

Would I buy again? Yes if the deal stacked up.

Interest rates arent going to go anywhere and people want to live here. The most robust economies in Australia are Sydneys and Melbournes. Sydney has a major land shortage not seen elsewhere except for Hobart. However Hobart has a population of 200k, a mere fraction of Sydneys and I feel its also prone to hard downturns.
For Sydney I would favour house on land over apartment dwellings at this stage though.

And people need to be happy with whatever they decide. They shouldn't just do something just because a random person on the internet says something. Must use own brain. If the SANF isn't there.. don't buy.

 

Good property in demand locations will always be just that. some ups and downs as markets fluctuate but the psychology of what makes that area a good in demand area will not change unless the area it's self changes for the worst which is unlikely.

 

I'm definitely not looking to buy in Sydney.
And to get an idea of my thoughts on the place, see where I've moved back to

 

True that!
If you find the market taking a breather for a purchase like this and it aligns with your strategy... Why not go for it.

Thing is... Sydney gets so many migrants. Migrants want a place to live. And typically they'll save and buy a place within a few years of immigrating. As Sydney has limited well located land... prices go up.
To contrast, Brisbane feels quite white/not so strong for migrants.

If our economy tanks Sydney will take a big hit. Or some other macroeconomic factor comes into play. But I don't see it coming soon.

 

Well both have their good and bad - I'm sure some people like that about Brisbane.
But there are plenty of other places to find IP's as well.
I've fortunately had Sydney type growth at South Coast NSW for example.

 

The spending on infrastructure without a visible means of support concerns me. The money has to come from somewhere. This happened in QLD when they had all the mining boom money coming in - spend, spend, spend!
As I've previously said, will be interesting to see what happens.