When will the Melbourne property market bottom out?

Discussion in 'Property Market Economics' started by Boyapete, 23rd Apr, 2019.

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  1. Boyapete

    Boyapete Member

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    If you read the media reports, Melbourne could still be on a journey to doom and gloom with some economists predicting a further 20-30% decrease.
    Labor tax reforms, over supply of apartments, a slowing construction industry, less Chinese investment, over priced housing, poor market sentiment, excessively low interest rates, banks not lending and record personal debts all seem to be the main arguments for further collapse.
    Our increasing population growth and our somewhat strong economy seems to be the only counter argument to why the property market will bounce back.
    What are your thoughts?
     
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  2. Trainee

    Trainee Well-Known Member

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    Are you asking when it will bottom, or whether there is a bottom?
     
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  3. Boyapete

    Boyapete Member

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    I’m asking for people’s predictions on what the Melbourne property market is going to do over the next few years. What’s your thoughts and why?
     
  4. Scott No Mates

    Scott No Mates Well-Known Member

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    How long did the previous boom last? Halve it and you will be on the upswing.
     
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  5. SLP07

    SLP07 Well-Known Member

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    Well located property in sought after areas long term.... will always do well. Predicting the bottom is like picking tattslotto Numbers, my opinion
     
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  6. Eric Wu

    Eric Wu Well-Known Member Business Member

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    the whole Melbourne? or particular pockets?
     
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  7. Whitecat

    Whitecat Well-Known Member

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    My prediction is it will drop for at least another 18 months then it will be flat for at least a couple of years. No need to hurry just spend time getting to know the market and being ready to pounce on any extreme bargains
     
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  8. kierank

    kierank Well-Known Member

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    Are Melbourne pricing falling?

    That would be a first.
     
  9. MTR

    MTR Well-Known Member

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    Love the Melb market, but sitting back and watching, there is no rush, some areas/suburbs will feel more pain than others. It will also come down to the product, apartments currently getting hammered big time.

    Bust cycles last longer than boom cycles. Melb has a lot going for it, namely the highest immigration, but credit squeeze is what is killing property markets at the moment, until we see this ease we probably wont see any rises.

    The only way of knowing when the bottom hits is when you start to see stock shrinking, and clearance rates rising.
     
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  10. David Shih

    David Shih Mortgage Broker Business Member

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  11. FXD

    FXD Well-Known Member

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    My thought is when people *stop asking the question if the bottom is in* then there may be a very good
    chance the bottom is behind us :).

    My logics are based on:
    1. Those who want out badly enough have probably done so already and no point asking the
    question afterwards
    2. Those who can wait it out won't ask that question
    3. Those who have enough conviction to buy in a falling market regardless at what level in
    relation to a bottom won't care about that question


    Cheers,
    FXD
     
  12. Kangabanga

    Kangabanga Well-Known Member

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    Population growth is probably the only argument here but that's countered by oversupply. Economy strong? Hmm not so sure...
     
  13. Robjj

    Robjj Member

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    To me it looks like a wave of decline heading out from the centre and yet to properly reach the outer suburbs. That’s my reading of it. Possible deadcat bounce post election if/when shorten gets in.
     
  14. mues

    mues Well-Known Member

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    It’s price sensitivity. So when you think it’s a wave heading out - expensive places are just impacted more.

    If you want to buy / sell an existing property under 900k in a non new build area there is a market. Over 900k buyers thin out quickly.

    Many like my mate who just sold his unit (build in 80’s) in a blue chip area for sub 700k planning to upgrade to a 900k house just got told by the bank 800k was their max with two kids.

    This plus almost 0 investors is the biggest impact on current prices.

    For those who are wondering. I’m buying this year.
     
  15. FXD

    FXD Well-Known Member

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    I am wondering what may happen if/when all those >=900K stocks get bought out eventually.
    Will the >=800K stocks then get elevated to >= 900K due to demands so on and so forth for
    all other lower K stocks. It's another way of asking how did the recoveries unfold historically?
    Bottom up pushing the market or top down pulling the market?

    Cheers,
    FXD
     
  16. albanga

    albanga Well-Known Member

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    Post election and some dust settling time.
    Q3-Q4 this year.
     
  17. Triton

    Triton Well-Known Member

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    Di
    Disagree with buyers thinning out over 900k, only houses struggling to sell are ones that were previously overvalued by investor/developer (ones that were knock down or major renovation). Ready to move in houses in good family friendly suburbs are selling even at 1 to 1.3m range
     
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  18. berten

    berten Well-Known Member

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    Over 1.5m is where it gets really thin, according to melb agents I've chatted with.

    My guess, bottom by 2020 stagnate for a few years.
     
  19. mues

    mues Well-Known Member

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    We kinda agree here. There is less buyers at 900k plus so only good places selling. Overpriced ones sit on the market.

    Lots of houses advertised between 900k and 1.2mil need a lot of work. They don’t sell you are correct. If there is more buyers I think they would sell more easily
     
  20. mues

    mues Well-Known Member

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    That specific scenario probably won’t take place.

    Fundamentally, you are waiting for increased demand to increase prices. Demand is suppressed due to negative sentiment in the market. Banks are limiting funding which means the “means” to buy is also suppressed.

    Neither look likely to change in the short term. However, dig through this forum 24 months back and 60% think boom continues no worries. 20% think we just slow. 10% think small decline. Not many felt we would be in the largest decline on record like we are now.

    So your crystal ball is as good as mine. One thing I do know is that time in the market is better than timing the market. So if you need a new PPOR it’s a better time to buy now than other other time in the last 4 or so years.

    Hence I will. Like during the GFC.
     
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