Will we see another boom again?

We haven't seen the end of this one in Sydney or Melbourne, Brisbane is still swinging, SA/NT/Tassie are on the move and WA hasn't hit rock bottom (or I may have missed that email).

Which boom are we talking about?

 

The next one. There is always a next one!

 

Correct...and conversely downturns will never stop either...so those bogan better get outta bed before noon and look for work after all

 

I'm wondering for which cities this is for? for example in Brisbane where the rises have been very modest the levels of debt must not be so high. Or are they?

 

I know outer Melbourne best and it's still going hard. Very hard. Merrifield estate which is in the boom docks is selling 90 lots a month. Bridgefield in Rockbank will be sold out by the end of the year that's 1300 lots in around 18 months. Williams Landing is shooting the lights out with price growth as is Aston. Wollert estates are fetching top dollar. It's nuts out there in the markets I play in. I'm struggling to make stuff work. Just when I think a market place is too expensive it keeps growing.

 

Its not entirely unreasonable.

I've been thinking about it since reading that article on the South African "community owned city" article from a few months back.

With the internet and online entertainment etc....there is nothing stopping a "mass migration" to a privately owned block of land that then becomes the next "Monaco" of the 22nd century.

We don't get a lot of the discussion in Australia but here in the USA there is a lot more discussion about how fungible PSOR is for HNWI and that one state or another can sway to PSOR of the 0.001% quite easily.

Its an interesting time we live in.

 

I love that analysis Cactus. I believe it is because owner occupiers in the Melbourne market have seen the point at which house prices have gotten to in the Sydney market which has created panic and everyone just wants to buy anything to get a foot in the market, so the last resort area is the outskirts. I think that everyone believes that after what has happened in Sydney, with a similar population and various similarities in demographics and economic status if they don't buy somewhere now they will never get into the market. IMO, while I hate talking about overall City markets as every area is different, Melbourne won't start slowing until ~$925,000 median house price when a serious percentage of the owner occupiers are priced out of the market as seen in Sydney. I'd love to look back on this in 5 years to see how my prediction goes

 

Agreed with that, rising markets creates FOMO, people panic buy and the growth snowballs. Exactly what has happened in the Perth market in the opposite direction, everything's dropping so people panic sell which snowballs the decline in value.

 

And believe it or not this does happen in Brisbane also in cycles
At the moment people are a bit complacent about housing. People can get a good house for not a huge amount of their income.

 

I think your right about the median only I would even say a bit higher like $950k and then just hit the $1m before retreating slightly. But who knows... crystal ball stuff really.

 

I agree.
Assuming nothing out of the ordinary happens.
Salaries won't catch up with the existing growth patterns
So at some point. 80% of the population won't be able to 95% of the property which means that even though the price has risen.
Demand won't be there.

Obviously this is just one aspect but a significant one.

The prices just have to be subdued or even ceiling ed until wages catch up....

 

The reality is the "mining boom" is still going strong. Iron Ore, gas, and coal are being exported in vast quantities like never before. However 2 things have changed: commodity prices are down so the big miners are just making a decent profit instead of an obscene one. And most importantly, the build phase is over so the "jobs boom" is over. Automation means that fewer workers are needed in the mining industry.

 

I don't agree. Almost everyone can change Investment Strategy for their super (e.g. from Balanced (where a part of investments go to the property market) to Cash or International Shares), so when people see a clear sign that the property market starts going down, they can change their strategy quickly and it will only make it worse.

 

Hmm, I think I saw all those movies

Same happened to me, I couldn't believe Coburg was averaging $450k and thought it'd slow, and now look at it.

 

I think we will but after we see some sort of bust

 

i have patients 90+ years old still living strong alone but independant.. with the improvemnts in medicines in technologies, you may live stronger at 105+ yrs

 

Yes . Within 20 years Sydney will have another boom .

Cliff

 

I thought it was 7, after it slow down they say it 10, maybe now it drag out to 13 years
All ****** talk next boom, just do what you do in all cycle boom and bust with prudent risk and capital management

Anyone remember when the Japanese pulled money out of the Gold Coast in the 80s
In a downturn I guess some Chinese will pull money out too in Sydney and Melb

 

I voted 1. Why? I believe Polygamy will be legalised in our lifetime. With at least three income earning households, strap onto your seatbelts, boom inevitable

 

Game. Set. Match.

When banking deregulation started in the late 80's, you could borrow approximately 3.5 x your income. By the time APRA Round 1 intervention occurred @ 25 years later, under the right circumstances and using the right lenders in the right order, you could potentially borrow 15-20 x your income.

The expansion of borrowing power multipliers have reached an end point. APRA has intervened to stop them in their tracks. And if it was borrowing power multipliers that were enabling more people to borrow more money to pay higher prices, and that is now at an end...what is the natural conclusion to draw? It must slow.