The future of Australian property prices

[satanoperca]

Negative gearing removal will drive up rents at the moment. Its a supply issue in NSW.

Any proof for that?

 

[moXJO]

Any proof for that?

Yeah the current market is proof of that.
There is not enough supply of family housing.

We have an influx of overseas cashed up immigrants that dont care about negative gearing. Chinese investors are stacking tenants 12 deep in a three bedroom. Properties are selling for ridiculous prices in a matter of days because of a shortage of well located stock.
Yet somehow negative gearing will magical bring stock online. Not at this stage of the market. No ones selling enough houses because of negative gearing changes. However its a reason to jack up rents to cover costs in a tight market.

You want a sure fire way to lower prices, then tighten lending and jack up rates, then you add negative gearing tinkering and then it will tank. It would be a sure fire bet that it crashes the economy with it. Property cycle is sure to turn south eventually so wait it out.

Unit prices would probably drop under negative gearing changes. And its all about location as well. Well located ain't tanking anytime soon.

You want low prices, then wait for the economy to tank.

 

[Modest]

* Please note that the information for the current financial year may not be complete (red bars) due to the inclusion of recent property sales that have not yet settled.

Still an interesting trend for Perth, I am all for it!



Source: https://www0.landgate.wa.gov.au/property-reports/market-trends/property-hotspots

 

[moXJO]

Prices will eventually tank....Its inevitable.

Perth was awash with mining money and things got stupid. Im sure NSW will follow eventually.

 

[sptrawler]

It's six o'clock ....

View attachment 65666

That was over a year ago, trainspotter, in W.A the clock is stuck at six o'clock.
The jobs situation feels like it is, flattening, but the housing oversupply will be a problem for some time.IMO

https://thewest.com.au/news/wa/housing-fear-as-population-rise-slows-ng-b88424530z

https://thewest.com.au/business/markets/soft-wa-home-market-hits-brickworks-again-ng-b88424793z

http://www.abc.net.au/news/2017-03-21/wa-housing-prices-to-fall-as-oversupply-hits-state/8373564

 

[moXJO]

Here come the rate rises. Things will get interesting

 

[sptrawler]

Here come the rate rises. Things will get interesting

It is just a case of squeezing those, who can't afford the rent shortfall, to sell to those who can.
Then squeezing some more, until they can't, only the greedy will get caught.
Those who cut their loses, or lock in their wins, will be o.k

As for the Government, well it is a win win, as was predicted.
In W.A there is a huge oversupply of rental properties, rents become more affordable and the Government didn't have to build them. Just have to supply the bond, for tenants, to fill them.
Just my thoughts.

 

[kid hustlr]

Still buyers in Sydney but blind freddy can see it's starting to turn.

Probably get 10 years of flat

 

[sptrawler]

Still buyers in Sydney but blind freddy can see it's starting to turn.

Probably get 10 years of flat

It depends on how much building has been going on, in W.A heaps of building, heaps of people leaving.
I don't know the situation in NSW, in W.A it was obvious two years ago, supply was going to outstrip demand.

 

[greggles]

UBS call the top of the Australian property market.

http://www.abc.net.au/news/2017-04-24/housing-market-top-called-by-investment-bank-ubs/8466198

 

[sptrawler]

What, we have enough landlords on board, now we just have to see how many fall out of the tree in a declining market.

 

[Bill M]

I don't know the situation in NSW

It is still hot. Record prices are being received in most suburbs. I just sold my house in a week and there were 5 buyers fighting for it. I downsized so there will be some chump change left over for us. The thing with these types of markets is that it makes people want to move. Common story line is a Westie in Sydney sells a 3 bedroom timber cottage for $1 Million and then buys a 3 bedroom brick house on the Central Coast for 500k. Only a 100K out (1 hour) and at half the price, retires and lives the good life.

As for construction and supply? There is plenty in the pipeline but very few completed. That means there is still not enough supply. I have been observing an apartment block being built in my area, has about 50 apartments, 2 years later and it is still not completed. Several plots of dirt selling apartments off the plan...........still a sod has not being turned. With slow construction like that and thousands of people pouring into Sydney each week there is no way they can keep up.

And its all about location as well. Well located ain't tanking anytime soon.

You want low prices, then wait for the economy to tank.

I like moXJO's assessment. Sometimes they build apartments in really awful out of the way areas with bad transport and no walking distance shopping facilities. What people really want is a railway station and shopping center walking distance away, these apartments always sell out quickly. Location, location location, will always get tenants and the price rarely drops. Who the hell wants to drive a car to the supermarket, fight for a parking spot and then have a time restriction on that spot, that isn't living? Come on you building companies out there, build us what we want where we want.

 

[basilio]

"It is still hot. Record prices are being received in most suburbs. I just sold my house in a week and there were 5 buyers fighting for it. I downsized so there will be some chump change left over for us. The thing with these types of markets is that it makes people want to move. Common story line is a Westie in Sydney sells a 3 bedroom timber cottage for $1 Million and then buys a 3 bedroom brick house on the Central Coast for 500k. Only a 100K out (1 hour) and at half the price, retires and lives the good life." Bill M

It is mad. Melbourne is the same. Median price of houses is $844k. Most established houses in reasonable suburbs well over $1m . Yet one can buy lovely places in say Ballarat for $350k. Comfortable. Great medical facilities. Enough city for almost everything one wants but no mad traffic jams, endless suburbs, huge high rises and extortionate parking fees. Only 75 min by train to Flinders St - every hour. Certainly makes sense as retirement option.

 

[luutzu]

"It is still hot. Record prices are being received in most suburbs. I just sold my house in a week and there were 5 buyers fighting for it. I downsized so there will be some chump change left over for us. The thing with these types of markets is that it makes people want to move. Common story line is a Westie in Sydney sells a 3 bedroom timber cottage for $1 Million and then buys a 3 bedroom brick house on the Central Coast for 500k. Only a 100K out (1 hour) and at half the price, retires and lives the good life." Bill M

It is mad. Melbourne is the same. Median price of houses is $844k. Most established houses in reasonable suburbs well over $1m . Yet one can buy lovely places in say Ballarat for $350k. Comfortable. Great medical facilities. Enough city for almost everything one wants but no mad traffic jams, endless suburbs, huge high rises and extortionate parking fees. Only 75 min by train to Flinders St - every hour. Certainly makes sense as retirement option.

When the property market crash, it's gonna be quite a sight.

The prices in Sydney is just insane. Yet everyone I know laughs at the idea that it could crash, or even drop by more than 10%. The most they believe is that it's insane but it will just stay the same for the next decade then pick up again. That it just will not crash because... because Sydney is awesome and we're all rich enough to afford a $1M+ "house" that'll need another $200K to fix up to be liveable, or $500K to knock down and rebuild.

 

[CanOz]

Prices will crash when no one's expecting it....likely when the endless stream of Chinese credit finally dries up.

 

[Gringotts Bank]

When the property market crash, it's gonna be quite a sight.

It will be. Today as I drove around Melbourne with 5 million others (or rather sat in traffic jams), I reflected on how Melbourne has gone from being the 'most livable' to quite undesirable. Seems like the penny hasn't dropped yet.

Here's my ratings for the once great city:

traffic and parking: D
weather: used to be a B, now C (depends what you like)
services: B
healthcare: B-C
education: depends how much you pay
sport: A
culture and arts: B
food: fresh food A, C if you live >10km from CBD
restaurants: same as any other big city
crime: C

 

[Quant]

Prices will crash when no one's expecting it....likely when the endless stream of Chinese credit finally dries up.

First time RBA raise rates it will be the beginning of the end . Take that to the bank and short any banks pops while you at it

 

[MrBurns]

Yes this is the bubble of a lifetime people have been calling it for 10 years and now it's front page news. Interest rates are rising the interest only investors will bail first and the rest will follow, down 30 or 40% I estimate. Like watching grass grow but it's an inescapable reality now. Have a look at the CEC report http://cecaust.com.au/main.asp?sub=media&id=Aus_Weekly_Report.html
Interesting viewing. The new GFC is happening now.

 

[moXJO]

I'm seeing a slowing in how quickly houses are selling.

Its all about immigration as far as I am concerned. A lot of cashed up people want to live here. If you have a stream of buyers entering Australia and not enough stock. And all the while you have the next generation born here wanting to buy. Then its pretty simple that demand is outstripping supply.

You can tinker all you want with policy, but you will just make it worse. Fast speed rail needs to be considered and other policy to ease prices in and around the cities. People will build, develop and invest further out to stop the strain.
Or you could stop immigration for a few years.

 

[Junior]

A significant rise in interest rates, and the perception that they will continue to rise, is the only thing that will cause a crash in my opinion. There are still huge numbers of participants trying to enter the market. A 5% or 10% fall in prices will enable those who are waiting on the sidelines to enter.....higher rates or difficult in obtaining credit is the only thing that will truly dry up demand.