Yet another one: How concerned are you about the housing slump?

Yes I put rent right down in Harris Park to get tenants in just before Christmas. It worked - new ones moved in 2 days after old one moved out ie 19th December.
Fortunately, I was so cash-flow positive on that one that it won't hurt much.Too many vacancies sitting there with last year's asking rents - a waste of time and money taking so long to accept reality. Too many developments in the area still sitting on the market.
Overall, not worried because the credit tightening is artificial and can be changed at any time. I prefer less growth - it was out of control, literally. Once more on-going sustainable paramenters are established, everything will ease again.
Would like to see less slack in the rentals in Sydney.
Melbourne and regional, no probs.

 

Yep..I am seeing that Melbourne Outer suburbs/regional rents are okay.

Harris Park is an older suburb with less new flashy apartments with ridiculous rents. Areas like Parramatta, Hills, Meadowbank, etc are the ones which took $100pw hits...I would be surprised if you took more than a $15-20pw hit..which on about $400-450pw would be less than a 5% whack.

If sits over Xmas break it could have a 4 week vacancy which on a $450pw apartment would cost aobut $1900 or the equivalent of rent reduction of about 7% of the original rent.

 

From $390 pw to $340 ie $50. Didn't want to muck around. Unless there's already someone wanting to move in (which has happened before elsewhere), shortest time possible to get new tenant signed up is nigh on 2 weeks.
Others may not have to discount as much now that Chrissie is over, I just went super competitive to get the tenant in.
On the plus side, the dumas PM has left and been replaced by a young lady with a brain.

 

Smart move.

 

Probably a smart move....the Sydney rental market is taken a hammering...

I was doing some research around Maroubra....looked at a few 2 brn units....lots to rent under $500pw ... the agent was saying she has had difficulties renting places out even in summer....

 

The buying is great right now but it's a renters' market like we haven't seen for a very long time. I think there'll be more movement out of Sydney, too.
Maybe a good time for me to move back!

 

I flagged that there would be some sort of shock when priced went mad on 2012 to 2016....now the birds are coming to roost.

I am looking at stuff on London 25 miles out (abotu 40 klms) ...they are much cheaper then Sydney...so it has to correct big time. Lots on this site still in denial...

This is going to go back another 10% over 2019-2020.......

 

Easier to just take things as they come.

 

I know Sydney is your main interest, but do you have a similar prognosis for Melbourne seeing that both cities went up big time over the same period?

 

Yes same thing is happening in Melbourne ...but some of the outer areas are doing quite well still.

The rents have not dropped as much...in Outer suburbs...

 

Yup that’s it...it’s inner burbs, high end burbs and ones that shot up sharply that seem the most affected in Melb

 

1 for me. While relatively new to investing, have owned a home in Melb since late 80's, and while there has been good years and bad years, overall house prices have outperformed CPI.

 

I'm not particularly concerned. While part of me (the part that owns an IP) wants house prices to stay steady, part of me (the part that wants to buy another IP once my current one is paid off) wants house prices to go down. I think at the end of the day as long as we keep pumping people in, keeping demand high and having stable rental yield, I won't really care. Renters will always need a place to live.