Will the Sydney median house price reach $1 million by the end of 2015?

Unless the interest rate rises are significant - plus 10% and within say; 12 months, then all that will happen will be a gradual stall in the market for a while....not many distressed sales I'd say.

This will eventually make houses more affordable, but it will be a couple of years lag until wages catch up again, before this occurs.

 

Which means it would be in 8-10 years time frame like in the past Sydney boom 2003 up until 2013 ?

is that correct time frame approxiamtely.

 

It is hard to know for sure, but in the simplest analysis; folks can only afford what they can afford.

Right now, Sydney is absorbing the current crop of folks who can afford to pay more.

Soon, this supply of buyers will be exhausted, and everyone else is already shut out of the market.

So, then we will see a large deficit in buyer supply - less demand generally.

This won't change much unless the wages go up, or the interest rates sink even further, or both.

I can't see wages really escalating much due to the current economic climate, and there can't be too much left in the tank to lower rates.

So, a period of 5 or so years of not much growth is my prediction. Maybe even a slight contraction as the median drops back due to more higher end sales at discounted prices (distressed sales most likely).

 

Does this mean when the RBA raises rates the red graph will flatten not fall? That's still a good outcome.

 

Probably.

But, as to what the median does; it will depend on which end of the market stops selling.

If the top end stops and the bottom end continues to sell, then the median will drop - the red line will fall.

That doesn't mean the market is bad; just the buyer activity is at one end more than the other.

 

Cool, many thanks @Bayview for the enlightenment. I appreciate your sharing here.

 

You see a difference? I don't. Both markets ruled by emotions and flock behavior.

 

Whatever. I don't care much about Sydney prices.

 

Yeah, like it's very easy to trade houses with a few mouse clicks using an online brokerage account

 

Of course you don't. Cause you were not invited to our party.

 

Let me remind you of a very instructive graph of recent times.

 

You think forex is easy? ))

 

Some parties are not worth it.

 

Yeah. Especially when you're not invited.

 

Yeah. It's like Poker.

 

Transaction costs associated with property mean that people don't just jump in and out there's no comparison.
The property market is made up of groups other than investors, oo are the largest group.
Where there is some similarity is in human behaviour with regards to fear and greed.
Back to Sydney, the harder it runs now the longer the period of future underperformance. Future wage growth looks likely to be subdued with lower economic growth, when you consider recent APRA changes shaving borrowing capacity future growth in stretched markets will be poor until things rebalance.
Wages and inflation need to play catch up for some time before the cycle starts again IMO

 

Thanks! I'm calling my broker to place a short position on tassie resi property now

 

@DanW why mate ? Tassie econoy is going backward or is in the trough according to HTW investment clock.

 

That's my point - short position

 

For the vast majority of folk who own a PPoR, the movement of house prices is irrelevant to them in their day to day.

A slump in prices or a boom isn't going to affect what they do with the house too much. Some might think of doing a reno, or extension, or trade-up if their house goes up in value, but not many will sell if the price goes south a bit.

Folks like us here on this forum are more mentally in touch with house price movements and might change our decision on where/when to buy - but we are in the minority.