NSW When to buy in Sydney again

anyone has never sold since they started buying ?? between me and my mom.. we havent sold since 90's..

am i am thinking of an upgrade for PPOR.. looks like bad timing =,=

 

Yep . . . will be interesting to see how market (particularly baby boomers) react to falling prices... already seeing increasing number of listings.

 

I don't think the baby boomers will care since they are likely to have paid off homes bought way back.. no stress. They've seen it all before...

 

Where do you look for this information?

I would have thought that people would be more likely to hang on to property so they don't realise a loss?

 

Exactly . The baby boomers we know personally , have already sold and moved on to the next property . One of our best friends bought a town house in Mosman around four years ago and sold the family home in Turramurra around 18 months ago . Another couple did exactly the same in Waverton .

The issue will be the people who bought with 10 - 20 % deposit in units that are yet to settle , or people have geared to buy in places like the ponds , new , expensive developments which outside having McMansions on them are pretty non descript where there are lots of people in a similar situation .

After the last peak the stories of pain on the forum seemed to come from Parramatta or some of the newer developments around the hills .

Most of the established areas wont have the same degree of risk compared to areas with levels of high developments .

If you look at the inner west , there will people who have paid over the top and will get into trouble , BUT most people living there are not in that situation , and because they are popular established areas , a handful of distressed sales won't crash the market .

In terms recent pull back , all that's happening is that people are no longer fighting at auction to push prices beyond what everyone expected . There may well be a pull back on monthly figures , but I'd wouldn't expect a significant pull back on annual figures and that's what everyone will be looking at in five years time .

Cliff

 

Oh yes the all knowing super smart Baby boomers

they do own 57% of Aust property however. History shows that seniors need to deleverage in retirement.

Eg

Downsizing
Maintenance
No more negative gearing breaks
Accessing equity to pay for retirement.

 

I would think a lot of Baby Boomers from both Sydney and Melbourne downsize by choice as opposed to need.

 

Certainly...

But baby boomers only started turning 65 in 2010. So we are 7yrs into 20yr cycle...

Plenty more supply to come on the market yet

 

The Baby boomers will hold onto their PPORs. Why?
Tax breaks..... PPORs are basically the best place to store wealth. It's tax free. Baby boomers are probably the wealthiest demographic of all Australians.

And you don't get negative gearing on PPORs. I think they are the least likely to panic sell anything and are the most financially sound demographic. They lived through the 18% interest rate times. Most of them have had good salaries for a long time and have paid off housing which they have lived in for a long time.

They may choose to downsize, but I don't see any huge flood of sales from them. They aren't the mortgage stressed.

I can't see them particularly forced to sell IPs either.

 

if you have to live off 200k super balance (typical super balance) and have 500k equity in your PPOR and want to utilise this equity... what are you going to do?

While the top 10% of BB's with investments, IP's sufficient net worth etc won't be affected, maybe the top 20% of cohort.

It's the other 80% in above situation that will need to solve this problem.

 

Pension.

 

Hope it sticks around when average age increases to 90, and no one hopes to travel in retirement etc

The real troubles with Australian super - ABC News (Australian Broadcasting Corporation)

 

As long as a PPOR is a tax free haven, people wont will sell it.
If you sell you'll:
* Incur costs
* You'll end up with a lot of cash meaning you won't qualify for the pension and all the perks anymore
* You'll lose that tax free asset and you have to live somewhere anyway.

They'll by and large leave it for the kids to inherit.

 

On the flip side by downsizing...

You can reinvest into new PPOR and still qualify for pension.

You can add cash to super and be in better tax position.

You can distribute cash to children earlier

You can live wherever you want.

You can live in whatever house / apartment you want.

 

I still don't think the baby boomers will be in world of hurt though.... and if you have a bunch of cash, I don't believe you'll still be able to get the pension.
Assets - Australian Government Department of Human Services

 

we know - you have made those points before.

Hope the houses that 55 yr olds are in now are completely suitable until they are 90... cause they will be in them for a while according to you

 

The poor old BB sells his old PPOR and reinvests into his new PPOR and this adds to the
supply

 

Poor old..? Nope he gets to move where he wants! Don't be negative Turk. Some ppl like the beaches / golf courses etc of Australia!

They will however be taking money out of different market segments...

And removing $$ overall from property (slowing demand)

 

Excuse me... I have my 90 year old grandmother in her home in Maroubra. Her youngest daughter lives with her. It was paid off probably in the 1960s. She will absolutely not sell... its been her home 50+ years. She would be carried away in a casket before you ever see her move to a different PPOR...

 

cool - that's one example. All the best to her.

I guess I'm thinking about the other hundreds of thousands who will be retiring each year.

Per my article above. Average super balance on retirement is 280K.

They will probably impact demand more