When will Sydney property market going to crash ?

Do you understand and acknowledge that in Ireland and the US people *literally* had conversations like this about particular areas that then subsequently were hammered into the ground?

 

Yes and in places like London, San Francisco etc etc, prices went up even higher after the GFC.

Anecdotally, there is a city/country in the world to suit any argument.

 

I don't live and invest in Ireland or the US. I invest in Australia. I understand Australia. You also have to understand that not all 'investors' are the same. The majorty of people who buy real estate as an investment do not understand bmv, add value, buffers, risk mitigation, diversification, demand/supply, fundamentals and about 20 other topics.

All is not equal when markets rumble affecting investors differently. Those who are well educated, well prepared will be fine imo.

 

So all those who were burned during the Irish crash weren't well educated or well prepared?

Is it not possible that you live in an economic system that you have little control over?

 

Don't need to control the economic system mate. Just yourself.

 

The point I'm making is that before Ireland crashed there were forums and newspapers and all sorts of media saying these same dumb things. Making up excuses for why it was different this time.

It wasn't. It was the same, unsurprisingly.

So, people are people the world over, prone to stupid exuberance, prone to justifying said stupid exuberance with whatever fantasy helps them continue believing all is well... and we know this, have seen it demonstrated again and again, going right back to tulip bulbs suddenly being expensive.

Knowing that people are like this, knowing that some on this forum are saying the exact same ridiculous statements, does that not cause you to consider that there isn't a new normal? That in fact it will be the same because people are the same?

 

I'm asking you directly about repeating statements that people made before Ireland crashed, before the US crashed, before Japan crashed, before Spain crashed... you are repeating what they said too.

Don't you realize this?

 

I don't care what they said. Its irrelevant. Lets chat in 5 years time

 

Hey I think Sydney prices are grossly inflated, but I came to the realisation long ago that my opinion means squat. The economist back in 2003/4 said that Sydney was in a bubble based on median income to house price ratios and here we are 13 years later with Sydney no.2 most expensive in the world at a ratio of 12. Hong Kong hit 19 so seems to me there is still potential to go higher.

I personally wont invest in the Sydney market (although I may build in the blueys) but comparing Sydney to Ireland may be relevant but so far seems not so.(i.e no chinese infleunce, SMSF, low interest rates etc) The price trajectory in Ireland from memory was far more extreme. I think comparisons with Japan are ridiculous as the demographics are completely different.

Sydney and Melbourne are on their own unique trajectories. As leo alludes to above, even if they fall 20% they will still be super high and people are flocking to both these cities at the moment.

So yeah, I wont invest there, I see more potential and value elsewhere but one cant deny the decades long price momentum of these cities.

 

Does it not seem odd to you that this "price momentum" kicked off right about when Howard cut CGT?

Sorta suggests the "drivers" that are so frequently cited are not actually the drivers at all...

Perhaps it's tax law and cheap credit above all and that only leads one place.

 

No, because otherwise the momentum would be at a national level. Perth is down 7% and Sydney is up 10% this year. Its always much more complicated than one factor.

 

Personally , we've sold three properties in Sydney in the last year .

Not because I expect it to crash , but I think it's close to the top and at sometime it will go sideways for a number of years .

We've bought elsewhere and I expect over the next ten years they will outperform Sydney.

Emza , what you're saying has been said many times on this forum over the fifteen years I've been a member and will be said many times over the next years I remain a member .

There are fundamental differences between Australia and USA which explain why the markets behave differently .

What we're seeing is just another Australian property cycle . I witnessed my first in late 60's and at that stage it was very hard to borrow money , families only had one income , but that didn't stop prices doubling in a short time .

Personally I expect it to keep going , due to our high level of urbanisation and Australia's fixation with owning their own home and our perception of property ass a safe investment . This time a new phenomena and I don't expect it to change any time soon .

Cliff

 

One other main factor imo is serviceability. Punters don't care much about the loan amount but more if they can service it(afford it) and i believe that's what property prices have followed. That max amount of money that can be borrowed. So let's say an average household on two incomes can service a million dollars and hence the average house hold in Sydney is around a million...

As long as money is cheap(extral low IR), not much will change and this can go for a very long time imo

 

Well it's been fun reading the bears and bull comments as usual. I would like to answer the o.p's question.

17/07/2018.

 

at 11:43 am.

 

The oft repeated statements keep going around but no one has control over other people buying, bank lending, exuberance, expectations etc. You can only control what you have, can and do, imho. The media has in recent times go bearish on property investment but not a lot has changed... Slowed but certainly not crashed. Do I hope for a crash? Yes and no. Do I expect a slowdown? It's a given. Will people continue to buy regardless of their skills? Yes.

I am no economist and not versed in international property markets but I do know that there are cycles in property markets and there are risks just like stock markets. Educated risks allow me to sleep at night.

 

Personally I think it will be when winter finally comes .....

Cliff

 

I think we will see some increase for short term, and buy winter 2017 the market will be flat for awhile.

I'm still buying my PPOR in the next few months though.

 

Whoa... you are fully loaded with cash or got large equity already mate , which suburb of your choice ?

 

how much have you got to drawn down from your park ridge IP?