This article seems to be fairly definitive on Sydney house/apartment prices in respect to affordability.
www.abc.net.au/radionational/programs/themoney/where-is-housing-affordable-in-sydney/7266656
Short precis:- If you are already in, you might be OK. If you are not in, forget about it.
apparently qld re agents can now negotiate their own contracts (commission and time), which probably explains sellers switching agents so often (after 1 month) and lack of motivation, and some are only asking 1%
Feb's market update from onthehouse if anyone is interested
Well FormulaNova in so many situations it came down to the fact there was nothing left to do, when the adjustable rate interest only loans would reset and double the monthly payments and no banks would refinance. You cannot get blood from a stone.
Select to expand quoteBeaglebuddy said..
Well FormulaNova in so many situations it came down to the fact there was nothing left to do, when the adjustable rate interest only loans would reset and double the monthly payments and no banks would refinance. You cannot get blood from a stone.
Yeah I agree. I can't believe that they actually sold loans like that to people. I.e. double or triple the repayments after the honeymoon period. Here people complain about 'red-tape' and government interference, but forget that it can lead to a downside like what happened there.
For a while here banks and mortgage brokers have been tripping over themselves to sell loans to people with minimal documentation or a little bit more easily than they would otherwise. I think this contributed to our crazy house prices here as people didn't have to hold the loans for too long, as they would just sell the house for a profit a year later.
It was a good documentary that I saw about Cleveland. It was good to see that someone got smart and figured they could 'buy' the vacant lot next door (after a house had been knocked down) for just the cost of the taxes, and they could turn it into their yard. I think that is an awesome idea. Get everyone to resume the vacant properties around them and turn them into yards. So instead of hundreds of vacant homes that encourage squatters, you get homes with a decent yard and people that are going to look after them.
Lots of sold signs up in my spot Sunny Coast Queensland.
Prices are still "affordable" compared to capital city's.
Lots of land around 650sqm for ~200k.
Older house and land for 350k
Select to expand quoteHaircut said..
Is anyone seeing a change in the real estate market lately, particularly Sydney? There doesn't seem to be any positive talk about anything economic of late, except that people bought a lot of christmas presents
Cairns is the hot property market at the moment.
nqbuyersagent.com.au
Select to expand quoteHaircut said..
apparently qld re agents can now negotiate their own contracts (commission and time), which probably explains sellers switching agents so often (after 1 month) and lack of motivation, and some are only asking 1%
Feb's market update from onthehouse if anyone is interested
<snip>
That infograph is too broad.
QLD regional is going up and up, and I suspect it's North QLD
Select to expand quoteKozzie said..Harrow said..
Here's an interesting little anecdote. A friend of ours was trying to buy into the area I live in. For the last 2 years they have been outbid at every auction by Asian investors. Last month they finally manage to win the auction of quite a nice house. How did they manage it??? The house street number was 44, (double death in Chinese culture), so there were no Asian bidders.
lets go to china and buy the 44th floor of all the highrises for peanuts
Ha ha, don't you know, they skip those floors - they don't exist!
Select to expand quoteHaircut said..
it's been a couple more months. Are you seeing any changes in your local area?
Rental prices in some areas of Perth have seen a huge correction. My niece and her boyfriend are renting in Mt Lawley, having moved from Bicton to be closer to work and because the owner wouldn't negotiate a lower weekly rent. The place they have entered into a contract for was renting for $900.00 p/w 3.5 years ago. They are paying $590 p/w and were able to negotiate a six month lease with a six month option. The place sat empty for nearly 4 months before they approached the Agent.
wow, that's awesome for them. we have sooo many apartments being built here, not sure what's going to happen. we had the first bit of realestate "gloomy outlook" type flyer put in our letterbox in ages, recommending people sell now, and almost overnight 5 houses went up for sale in our street
900 pw is nucking futs. Why wouldn't u own?! If u want cbd buy a kickass boat and live in the marina
A friend of mine in Sydney bought a house recently and was telling me that clearance rates are still very high.
At the same time he was telling me almost no one was bidding at the auctions and that he had the real-estate agent call him up and tell him that even though other buyers had made higher offers, they all wanted a longer settlement times, so they let him buy it... yeah. Sure. I guess that's what realestate agents do to sell.
The comment about the clearance rates made sense when later I read an article where they said the clearance rates were high because there was almost nothing on the market, i.e. not many people are buying, and sellers aren't trying to sell because they think the chances of selling are not so good.
In another example, a work colleague in Perth told me that they took a year to sell their place and got considerably less after that year than they expected at the outset. He also suggested offering 10% less than the asking price if I were to buy a place there, because sellers are motivated.
Here's another one of those lending restriction notices just released
au.finance.yahoo.com/news/120-aussie-suburbs-could-be-set-for-a-price-plunge-001948709.html
No one ever sold a headline "Nothing much happening. A bit up, a bit down." so it's only ever gonna be reported as boom or bust. Actually, no one has any idea.
Select to expand quotemyusernam said..
900 pw is nucking futs. Why wouldn't u own?! If u want cbd buy a kickass boat and live in the marina
One of my brothers was paying 1k per week for a 2x 1 x 1 in Mosman in Sydney in 2014. No need for a car, so he used to 'lease' his car bay to offset some of his rent cost. He moved out and paid 790k for about 80sqm of living space and a rear courtyard in Surrey Hills that he now rents for 800p/w. Someone has already approached him and offered him nearly 1 million for the place because they own the adjoining property.
The suggestions are that rents are down, but I have no first-hand knowledge.
Supposedly prices are higher again, but this is always from the main websites that also have a vested interest in talking up the market. The same group seems to have a 2015 2016 2017 is going to have further rises in prices in Perth... even though after the fact the increase turns out to have been a 5% decrease.
I am a bit surprised. If I was a younger person and priced out of the market I would be pretty angry, but the latest election results seem to suggest that at least 50% of the population are happy with the status quo, even if that means debt is huge.
Where I work, around North Ryde, you can see a lot of apartments ready to come online. Whether these are owner occupiers or investors, or Chinese investors that don't care about leaving it empty, is an unknown. Looking at how many seem to be being built I would expect prices, or at least rents, to fall.
On Sydneys northern beaches the prices are still going up as supply cannot keep with demand. Houses and units are selling for ridiculous prices and show no sign of slowing. Winter might be a bit quieter but in a couple of months it will be strong again.
We bought in March. We downsized to get back close to the beach & purchased a 2 bedroom unit across the road from Collaroy Beach.
A decent 2 bedder/one bath/lock up garage goes from $800k to well over a million is this area. WE did our research, spent every weekend going to open houses and auctions. It took over a year before we got what we wanted. Its extremely frustrating, time consuming and even depressing at times but perseveres paid off.
As stated before, if your in its good but good luck getting in. Most of the people we were up against were young couples with money from mum & dad who were paying $950k plus for a nice 2 bedder. Our 21 year old daughter has bugger all chance to be able to afford to buy around here.
My 2 cents worth.
In my area in the southern suburbs of Sydney, I think prices are still holding steady.
The only real data-point, sort of, is a work colleague that sold his half of a duplex and got 'not quite what they wanted'. Whether that was because prices are tight or if there expectations were too high, I don't know.
There seems to be a bit of a boom in turning any suitable block into a duplex site, but this might even be a symptom of larger building projects slowing down.
That said there are still some huge developments being built. When I was talking to a shop owner next to the 'brick-pit' site in my area, he was saying that bus-loads of Chinese buyers would turn up, look at the empty site, and presumably buy. The suggestion was that of 700 or so units, a lot of them will be foreign owned. This is only guessing though, based on what one person saw.
There is also another similar development proposed in the same area.
If I was an investor, I would be a bit worried about the pressure being put on interest-only loans. With higher interest rates, investors will find rental returns cover less of the debt, and the capital growth they are relying on is looking more shaky.
Anyway, even if prices were falling, it would take ages to figure it out. The real estate agents would try to talk it up, and you wouldn't know until 6 months later.
If prices are really that high in Sydney, why not move a bit further west to Adelaide or Perth?
Sell your small unit or duplex for a million and you can buy a big gorgeous mansion in Armadale Perth for around 750K.
Living in such small spaces is hazardous to your health for starters.
Your state of mind simply cannot be good living in such small units. Its unnatural to live your life cramped up in such places. My friend has a State Housing unit in Vic .Park. His living room is something like 4m by 3.6m.
Its clean,tidy and well furnished but when I leave its like I've escaped from jail - seriously.
Many people move to Sydney to massage their ego. It can't be for much else when you look at value for money.
When the private central bank,that is the Reserve Bank get their orders from TPTB to increase interest rates - there will be the mother of all crashes.
A million dollar unit can easily drop quickly to a few hundred K were interest rates to increase to say 10 percent or more.
How is it possible that a few thousand bricks on a piece of sand can be worth a figure that your average joe can never hope to save in a lifetime?
The answer is the price is 80-90 percent artificial. True value is probably closer to 150k - 200K.
Select to expand quotepetermac33 said..
If prices are really that high in Sydney, why not move a bit further west to Adelaide or Perth?
Many people move to Sydney to massage their ego. It can't be for much else when you look at value for money.
The answer is the price is 80-90 percent artificial. True value is probably closer to 150k - 200K.
To answer your questions, at least in my experience, I think it is hard to find work in Perth. I work in IT and despite all the mining billions coming from the area, I think a lot of the mining businesses offshore their IT or base it elsewhere. Apart from that, what does the Perth economy have? I suspect that the government missed an opportunity to diversify industries, but I guess there is not much you can do with a relatively small population.
Which is why... a lot of people move to Sydney and Melbourne. There is a large population, so a large variety of jobs. With the number of people, there is demand for almost everything. A lot of companies setup their headquarters in these cities because it is easier to get staff when there is a huge population. You could have a better lifestyle if you moved to Newcastle or Wollongong, and still have access to more jobs.
All prices are artificial. If there is no demand, there is no value. I noticed this when before the GFC there was a rise in holiday home suburbs on the north and south coasts of NSW. After the GFC, when things were tight for some, it was like a fire-sale in some areas. Once people realised that the rental returns were abysmal and they couldn't afford the luxury of a holiday home, prices fell.
I don't agree with your implication that rates would increase to a level where it will make people suffer. As people are so highly geared in property, a slight increase has a huge effect. The RBA are not trying to create a disaster for the economy, they are trying to prevent one. I will guess that we will not see 10% or above for a long long time.
Select to expand quoteFormulaNova said..petermac33 said..
If prices are really that high in Sydney, why not move a bit further west to Adelaide or Perth?
Many people move to Sydney to massage their ego. It can't be for much else when you look at value for money.
The answer is the price is 80-90 percent artificial. True value is probably closer to 150k - 200K.
To answer your questions, at least in my experience, I think it is hard to find work in Perth. I work in IT and despite all the mining billions coming from the area, I think a lot of the mining businesses offshore their IT or base it elsewhere. Apart from that, what does the Perth economy have? I suspect that the government missed an opportunity to diversify industries, but I guess there is not much you can do with a relatively small population.
Which is why... a lot of people move to Sydney and Melbourne. There is a large population, so a large variety of jobs. With the number of people, there is demand for almost everything. A lot of companies setup their headquarters in these cities because it is easier to get staff when there is a huge population. You could have a better lifestyle if you moved to Newcastle or Wollongong, and still have access to more jobs.
All prices are artificial. If there is no demand, there is no value. I noticed this when before the GFC there was a rise in holiday home suburbs on the north and south coasts of NSW. After the GFC, when things were tight for some, it was like a fire-sale in some areas. Once people realised that the rental returns were abysmal and they couldn't afford the luxury of a holiday home, prices fell.
I don't agree with your implication that rates would increase to a level where it will make people suffer. As people are so highly geared in property, a slight increase has a huge effect. The RBA are not trying to create a disaster for the economy, they are trying to prevent one. I will guess that we will not see 10% or above for a long long time.
I largely agree with you about the lack of diversification of the WA economy. That is why we are now left holding the can after Colin Barnett was chucked out comprehensively. A river of money could make any idiot a credible PM until it runs dry. I recall vividly Tony "Come ride with me" Abbott told his Liberal mates that "Colin is the financial genius out West". and that "they should go West to sought out his secrete formula for making it all happen". The ALP didn't escape his advice either.
Anyway, I fail to see the merit in investing $1,000,000 in an apartment other than hoping for Capital Gains later. That would be a highly speculative move I suspect. Meanwhile, to keep the bank happy, you will need to get at least $1,000/week or more rent to make it feasible, based on the simple rule usually applies to investment properties.
I read yesterday on the ABC that for whatever reasons, mining companies are beginning to hire again. One of the good indications is the demand for mining engineers. I believe it has gone up quite a bit, but of course nowhere near the peak. So maybe WA is coming back from the brink? It has to, innit ?
House in mount druit sold for 1.2 million.
New record but it's
Nothing extra special either.
My little part of the sunny coast is super hot. House next door sold before it got to market, just on rumour. House 3 up the street just sold in 4 days. I reckon that a correction in sydney/melb would barely touch the market up here.
stuff is selling and renting high in the street where i live too which is in the 600k - 1.2m range and 15-20yo houses, however areas even closer to the broadwater (Hope Island) many of them 30yo and older houses, and were selling / renting hot last year are not moving like they were, which i think is a bit odd. I'm not sure if it's a genuine change in market or if it was never really a hot market and more a case of investors rushing in thinking they were onto something that wasn't. Now there seems to be pockets that are doing well and pockets that are starting to suffer
this is SQM's yield stats for my postcode
sqmresearch.com.au/property-rental-yield.php?postcode=4212&t=1
vacancy
www.sqmresearch.com.au/graph_vacancy.php?postcode=4212&t=1
coomera used to be highly flogged by agents when we were looking to buy. vacancy rates have changed alot if the stats are right
www.sqmresearch.com.au/graph_vacancy.php?postcode=4209&t=1
for gold and sunny coast - what do you think will happen after the commonwealth games are over?
I am very interested to know how much rent for a $1 million 3X1 house, or may be a 3X2 ?
