NSW When to buy in Sydney again

Over the past 6 months, I've been doing a few letter box drops around the north shore, "I'm looking for a house in this area, save up to 50k in agents commissions, no hassle with open homes or preparing your property, flexible settlement terms" I've gotten about 5 calls, all baby boomers looking to retire, downsize, seachange etc. So yes there are baby boomers who want to sell but they all want top dollar because they aren't idiots and they get caught up in the property hype and they know what the house down the street sold for 2 months ago. I think they're price unrealistic expectations will be starting to get reality checked right about now.

There are also a whole bunch of home owners who will hold on to their property till they can't live in it anymore, retirement home, deceased estate etc, it's either empty nester downsizes or elderly.

The thing with bb's is they don't own "property", they own homes. Homes that they've raised families in, homes their kids have grown up in swimming in the pool, playing cricket in the yard, dog running around the back 700sqm+ blocks etc, they don't own otp or new estates, they've owned these properties for decades when suburbs like riverstone or even kellyville were rural lands (think inner to middle ring) 1m+ regions. For every bb that will want to sell their home, there will be another 5 young professionals that have made substantial gains in the boom on 200k+ combined incomes ready to take it off their hands.

If it was purely about investment, yeah you'd sit and wait for a few years and see what happens but sometimes it's not about investment, it's about lifestyle, family, kids, being near parents so they can babysit etc etc and you'll live there at any cost, bull or bear market.

Having said that, I'm finding there is a little bit of room for negotiation right now. Just made an offer today. Fingers crossed.

 

Most the BB's that I know who have downsized moved no more than 5/10 kms away, a few others have moved into Melbourne to be close to facilities they may need.

And if your slowing demand in one segment your increasing demand in another.

 

It's the life long renters doing it tough. The home owners... they've got so much equity they'll do whatever they like. Reverse mortgage if they have to. Anyway, people do want to move closer into the city and it's these older folk owning the properties. Some may get sold but some will also be passed down to the next generation.

 

I also know a couple of baby boomers , who have split the rumpus room off with a couple of bedrooms into a unit . $ 600 / week makes a nice boost to the retirement income and some who are doing air Bnb as well . One's has actually converted their six bedroom house into three units and are renting two out ... not quite legal in the zoning but the neighbours are probably watching , thinking "that's a good idea "..

Cliff

 

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I know. For BB with paid off large houses in good areas (the closer to the CBD the better), AirBnB + super = enough to live fairly comfortably / retire on.

 

Hmm I wonder what is driving the increase in stock volumes in Sydney over last couple of months since prices started dropping...

 

Less buyers! That's all. But, when you look on a per capita basis, it's still a lot lower than Brisbane in terms of stock levels.

 

Property investors could be sleepwalking into a $21 billion financial trap by ignoring deadlines for fixed-rate interest-only loans reverting to higher principal and interest repayments.

The value of maturing interest-only loans – which now fall foul of toughened lending standards – will increase from about $7.5 billion this year to about $21 billion in 2020, most of it taken out by investors, analysis by Digital Finance Analytics shows.

It means crunch time for many property buyers not eligible to roll their debt into other loans offered by the lender. They could be forced to find a cheaper lender, make much bigger repayments, tighten their belts, increase rents or even sell.

Many of these borrowers are over 60 and have purchased upwards of six properties, says Citi Research, often to increase income in their self-managed superannuation funds (SMSFs). They will face even tougher scrutiny about how and when they plan to pay off the loan principal.



Read more: How to avoid sleepwalking into a mortgage nightmare

 

It's not really a financial trap though is it? When these borrowers sign the loan docs it is very clearly spelled out that the IO term is 5 years, after which time the loan will revert to P&I. If borrowers want to ignore this then of course they are in for a world of pain.

That's nonsense. There are not "many" investors in Australia with 6 or more properties.

I tracked down the source of this and it looks like the claim is limited to "wealthy senior investors"

"In 2011, 22 per cent of wealthy senior investors own two or three properties, 72 per cent owned one, and just 1 per cent owned six or seven.

Conversely, in 2017, 18 per cent of this group owned six or seven properties, 7 per cent owned two or three, and 73 per cent owned one investment property."​

Senior property investors can’t ‘sit on their hands’

What do you suppose a wealthy senior investor is actually? How many of them are there and how many people does 18 per cent of wealthy senior investors actually represent?

Digital Finance Analytics (DFA) publishes some suspect data. Last week someone posted a report from Citi Research that quoted that 12% of investors in Australia have 6 or more properties. Of course this is nonsense and the figure came from DFA.

Their most recent dubious claim is Household Savings Are Shrinking. Are they? Last I heard, Australians are sitting on a 1 trillion dollar pile of cash. No bad eh?

The Property Imperative Volume 9 Report Released Today

"Australians have also been squirrelling away a pile of liquid assets. Cash and deposits alone topped $1 trillion last quarter for the first time on record, having more than doubled over the preceding decade."​

Australians sitting on mountains of cash as wealth outpaces debt

Considering consumer spending is down, it would be interesting to see how Australian's have gone from a record level of saving to "Household Savings Are Shrinking"

I have ordered the DFA report.

 

2018 - Aren't we supposed to pick up all the failed OTP contracts?

 

I would be watching thinking " wow you greedy old no hoper, thanks for all the extra cars on the street and lack of privacy for yourself and me and my neighbours" this is not cool at all and you should of done a proper development instead off closing of
a few of your walls.

 

Speaking of extra cars on the street. One of my neighbours has a steep driveway and was super apologetic that her son's car (looks like a fairly new bright green Holden ute) was parked in front of our house. She said the clutch was broken and it couldn't be driven down her driveway. And it would be like that for a week. And we say... It's a public road. The road in front of our house doesn't belong to us....

 

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Good for you gockie in this situation i would be cool with it for a week but after that i would tell him to get rid of your car this is where i park. I think most people have this feeling its like a code of repect you dont park out in front of someones house for long periods of time.

 

Back on sea changes post. If you actually have to convert your normal house into multiple units as a baby boomer you have failed
A succesful bb retiree would want a bit of privacy and should have other investments happeneing than there own house. My missus grandparents in syd bought the house next door never rented it just didnt wanted a mcmansion being built next to them in there old age. This is true signs of wealth.

 

Luckily for them and their neighbours most people don’t think like you ...

They’re living there so keep an eye on things so it’s better than them renting out a six bedroom house on the northern beaches and finding a group of surfers have rented it out quite legally and have a whole pile of friends crashing there ..... and that would be a problem for every one ...

Cliff

 

There greedy mate i know no old people who would actually do this to there house thet have lived in for many years. Still stuck in the rat race at that age.

 

Seriously ?

Failures .... one couple making the making the best use of their assets .

While another couple buy an empty house to protect their privacy . Interesting concept of true wealth ... sound like ******* to me .

Definitely a light bulb moment ...

Cliff

 

Have literally never met one old retiree who would sucomb to the greed of converting there house to units for an income. Yes they bought the house next door didnt want a neighbour building next door to them cant blame them at all.

 

Depends where you live off course. In my neck of he woods, you park wherever you can find one...even if its within an inch of someone else's driveway. The joys of inner/close to CBD living.

 

and people think the Millenial are the selfish generation!