When will Sydney property market going to crash ?

To date, my belief is that Govt's work with banks to make more money, it has been like this for decades.

 

Staggering that people think that the govt and banks can coordinate to 'keep rates low' in Australia when we are so dependent on offshore funding.

If borrowing costs Aussie banks more they sure as hell are going to pass it on...

 

Its not a matter of IF.......US rates have already started rising

US Federal Reserve raises interest rates

 

growing consensus at Fed that there is significant first mover advantage to be had by raising rates (vs Europe etc) from a trade / debt perspective too... therefore strong preference to keep raising

 

Unless there is some direct threat like at last election where they passed on cut in full.

People either have too short a memory, did not pay attention over the years, or are simply too young to know different.

 

The last one probably. It's hard to imagine that Mr Market won't make his presence felt in bond markets shortly unless of course capital markets are actually better managed by academic technocrats at central banks

 

US economy is growing and this in part is why we are now seeing interest rates rise.
I am playing in US and what I saw in 2011 was foreclosure signs on every second property, now they are gone and inventory has never been this low. Interesting times, how this impacts on Australia time will tell.

I am no expert, but one thing for certain booms do not last forever, after boom comes bust, and bust cycles last much longer than boom cycles.

Fed raises interest rates again in further sign of confidence in US economy

 

Pretty obvious they need to get away from the money press, and start raising & frankly, I think we should never have cut so far or at least had setup bank lending practices better before cutting so much.

I am convinced many places will get a decent haircut, I think it is not hard to come to that conclusion, demand has to have cut a lot already, like a car rolling up a hill, at some point it will want to backtrack, I guess it depends on who and how the brakes are operating as to how far back things go.

 

Indeed... if trump gets half the tax cuts through property and stock market could seriously rocket bringing inflation and higher rates also.

Who ever would have thought Trump could preside over such a relatively stable and large period of economic growth...

 

For those here interested, I'm currently listening to an excellent podcast on macro economics, featuring interviews with some very top gun hedge fund managers. Almost all of them are expecting this latest credit expansion to have serious consequences unlike what has been seen before.

Adventures in Finance: A Real Vision Podcast

 

Trump has always been very good with business and economics. The man knows how to make money. What he doesn't know is how to deal with world problems at cover other issues apart from economics and money. THAT is the problem.

 

and thats the beauty of the american economic system and a strong democratic system with free markets.
No one man however good or bad can cause serious ( and sustained)movement in either direction.

Trump would like to and has inferred via his numerious tweets that he is the reason why their economy is pumping ahead and their stock markets are doing well...it might fool his traditional base to believe so, but most others know that it has little to do with his office...a bit yes, but mostly not. Their recovery started in early obama years and has had a continuous streak since then.

 

USA economic indicators began an upward turn in 2013 and its just continued to grow.



MTR

 

The US housing market started recovering in 2011.

I settled on this cheap townhouse in Feb 2016 and today it has more than doubled in price. I prefer to buy single family homes, but now I buy whatever I can source.
Taxes have also risen due to house prices soaring, same as rents.

Purchase price - $34,880 (US) (27.2.2016)
Estimate value today $80,000 (US)
5594 Fair Creek Way, Lithonia, GA 30038 | Zillow

I wish I knew what I know today when I started buying in 2011.

I also settled on another in Feb 2017, not quite double yet, I expect this to happen early next year.

Lack of inventory continues to drive prices north.
Real estate CEO: Record-low housing inventory is 'freaking us out'

MTR

 

Rickards: Fed Continues Tightening into Weakness - The Daily Reckoning

"They are trying to make up for the fact that they should’ve tightened policy in 2010 and are trying to make up for lost time. The leadership at the Fed is desperate to get rates up to 3-3.5 percent and to get the balance sheets down to $2 trillion before the next recession. The Fed can either go to a QE 4 policy or cut interest rates. On the way to hit those goals, the question is can they do that without causing a recession they’re trying to prevent? The answer is no.”

“We have grossly increased the scales of our economic system. When looking at the complexity and size of the derivatives markets, the concentration of assets in the five largest banks, the size of the five largest banks… These are all markers of increased scale and leverage. It means the risk is considerably higher than it was in 2008.”

 

Thanks for sharing... what a fun adventure over there!

Out of curiosity what would be replacement value of the building there?

 

Anywhere from $90-120 per sq foot, I have been buying from $18-30 per sq foot

 

I studied economics while doing an Arts degree of all things. There's not much credit given to the humanities and Arts students. Certainly the current crop leave me uninspired but the places are no longer capped so entry is not dependent on anything much. I had to work for my University place and have the HECS debt to prove it. I would now save my money and do the occasional online MOOC, I think. Then again, learning research skills is invaluable but I can not see much of that, along with critical thinking, coming out of the learning institutions now. Top tip for employers, up to 2003 students are probably worth their weight, after would give me pause.

I learnt a lot from reading about the Asian Economic Crisis and looked at patterns of markets. I predicted the GFC in 2003 to my mother and expected a down turn in Australia around 2008 by looking at patterns of recessions. I did not expect the insane response from our government to put it off for another ten years and encourage the insanity. My curiosity got the better of me and I read about the basics of economics. The RBA online of all places have some fascinating papers you can read but it helps if you understand a little.

I have since run a couple of small viable businesses and studied business and marketing. The issue for business continues to be cost of freight and postage. High wages relative to the rest of the world, rent and housing costs make living on welfare for people with families tempting. It's not at all tempting for single people without children and successive governments make life hell for people and then wonder about the suicide rate and rise in mental health cost. If the government want people to work, regardless of machines, they need to change those things. I do agree with the investment in infrastructure in Australia that was released in the last budget as it provides well paid jobs that involve hard work and reward and provide something useful for everyone.

 

Indeed, but not much. I meant that the current rises have yet to really have much impact. The next few will.

 

Couldn't agree more, there was certainly a tipping point where cuts were obviously not having any type of stimulus effect and yet they kept cutting. This didnt happen overnight, the rba watched as the banks fuelled the debt bubble and now warn we went to far.