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Sydney rents defy predictions to continue their rise
Topic Started: 10 Jul 2014, 10:55 AM (3,885 Views)
b_b
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http://smh.domain.com.au/real-estate-news/sydney-rents-defy-predictions-to-continue-their-rise-20140709-zt14e.html

Rents are a lagging indicator, so the current lift probably reflects the under-building that occurred in 2010-2012. I would expect rents to moderate in 2015-2016 as dwelling approvals are converted into dwelling completions.

But in the short term, not good news if you are a Sydney tenant.
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Veritas
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b_b
10 Jul 2014, 10:55 AM
http://smh.domain.com.au/real-estate-news/sydney-rents-defy-predictions-to-continue-their-rise-20140709-zt14e.html

Rents are a lagging indicator, so the current lift probably reflects the under-building that occurred in 2010-2012. I would expect rents to moderate in 2015-2016 as dwelling approvals are converted into dwelling completions.

But in the short term, not good news if you are a Sydney tenant.
So I take it you are predicting price falls in Perth and Canberra based on the fact that rents are falling in those cities?
Property acquisition as a topic was almost a national obsession. You couldn't even call it speculation as the buyers all presumed the price of property could only go up. That’s why we use the word obsession. Ordinary people were buying properties for their young children who had not even left school assuming they would not be able to afford property of their own when they left college- Klaus Regling on Ireland. Sound familiar?

The evidence of nearly 40 cycles in house prices for 17 OECD economies since 1970 shows that real house prices typically give up about 70 per cent of their rise in the subsequent fall, and that these falls occur slowly.
Morgan Kelly:On the Likely Extent of Falls in Irish House Prices, 2007
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b_b
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Veritas
10 Jul 2014, 12:12 PM
So I take it you are predicting price falls in Perth and Canberra based on the fact that rents are falling in those cities?
I have been bearish on Perth for a year now.

I have no view on Canberra.
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Veritas
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b_b
10 Jul 2014, 12:15 PM
I have been bearish on Perth for a year now.

I have no view on Canberra.
So have I.

Boots on the ground as it were.

I have no view on Canberra except to say its one of the strangest places I've ever been to.
Property acquisition as a topic was almost a national obsession. You couldn't even call it speculation as the buyers all presumed the price of property could only go up. That’s why we use the word obsession. Ordinary people were buying properties for their young children who had not even left school assuming they would not be able to afford property of their own when they left college- Klaus Regling on Ireland. Sound familiar?

The evidence of nearly 40 cycles in house prices for 17 OECD economies since 1970 shows that real house prices typically give up about 70 per cent of their rise in the subsequent fall, and that these falls occur slowly.
Morgan Kelly:On the Likely Extent of Falls in Irish House Prices, 2007
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stinkbug
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Falling rents in Canberra is likely related to falling prices over the last couple of years or so. People here knew there'd be a change of government, one with a history of cutting public service positions. The town is still in the throes of shedding public servants, but some very big projects in town are bringing lots of new positions over the next couple of years.
---------------------------------------------------------------

While it's true that those who win never quit, and those who quit never win, those who never win and never quit are idiots.

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Blondie girl
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Yeah
Sydney's zooming, no wonder some Sydney investors are very happy at what's eventuated..no wonder that shadow is chirping ATM. :oo:

Perth, well it's in the slow lane, butt..
There will always be areas that do well so it's not always cool...

Flat rents but eventually it won't be..

Time
Time
Time

Veritas!

Remember things change.
Newjerk? can you try harder than dig up another person's blog. My first promo was with Billabong and my name in English is modified with a T, am Perth born but also lived in Sydney to make my $$
It's Absolutely Fabulous if it includes brilliant locations, & high calibre tenants..what more does one want? Understand the power of the two "P"" or be financially challenged
Even better when there is family who are property mad and one is born in some entitlements.....Understand that beautiful women are the exhibitionists we crave attention, whilst hot blooded men are the voyeurs ... A stunning woman can command and takes pleasure in being noticed. Seems not too many understand what it means to hold and own props and get threatened by those who do.
Banks are considered to be law abiding and & rather boring places yeah not true . A bank balance sheet will show capital is dwarfed by their liabilities this means when a portions of loans is falling its problems for the bank.
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b_b
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Blondie girl
10 Jul 2014, 01:54 PM
Yeah
Sydney's zooming, no wonder some Sydney investors are very happy at what's eventuated..no wonder that shadow is chirping ATM. :oo:

Perth, well it's in the slow lane, butt..
There will always be areas that do well so it's not always cool...
More proof house prices are not driven solely by credit / negative gearing / capital gains concession etc.
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Veritas
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b_b
10 Jul 2014, 01:58 PM
More proof house prices are not driven solely by credit / negative gearing / capital gains concession etc.
Who ever said otherwise?

If the unemployment rate was 14% things would be different.

Having said that, Ireland is still screwed and yet house prices have risen 20% in Dublin in a year.

Why? Massive supply shortages due to the banks not lending to developers in the main and, obviously, enough buyers in a position to access credit.

Of course, rising house prices is exactly what the Irish elites want to repair the loan books so the banks have a massive vested interest in choking off supply while maintaining demand by issuing mortgages.

The banking cartel fucks the little guy once again.

This is nothing to do with any cycle of course as Shadow would have us believe but rather the butt ugly end of the neoliberal experiment in letting the banksters off the leash.

All very sad.
Property acquisition as a topic was almost a national obsession. You couldn't even call it speculation as the buyers all presumed the price of property could only go up. That’s why we use the word obsession. Ordinary people were buying properties for their young children who had not even left school assuming they would not be able to afford property of their own when they left college- Klaus Regling on Ireland. Sound familiar?

The evidence of nearly 40 cycles in house prices for 17 OECD economies since 1970 shows that real house prices typically give up about 70 per cent of their rise in the subsequent fall, and that these falls occur slowly.
Morgan Kelly:On the Likely Extent of Falls in Irish House Prices, 2007
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b_b
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Veritas
10 Jul 2014, 02:32 PM
Who ever said otherwise?

If the unemployment rate was 14% things would be different.

Having said that, Ireland is still screwed and yet house prices have risen 20% in Dublin in a year.

Why? Massive supply shortages due to the banks not lending to developers in the main and, obviously, enough buyers in a position to access credit.

Of course, rising house prices is exactly what the Irish elites want to repair the loan books so the banks have a massive vested interest in choking off supply while maintaining demand by issuing mortgages.

The banking cartel fucks the little guy once again.

This is nothing to do with any cycle of course as Shadow would have us believe but rather the butt ugly end of the neoliberal experiment in letting the banksters off the leash.

All very sad.
House prices trend around replacement cost. When it is above cost, supply accelerates causing downward pressure on prices. When below, supply slows, resulting upward pressure on prices.

That has been the Australian experience. That is what happened in the USA. I expect that is what is / has happened in Ireland.

Can't blame a banking cartel for that.
Edited by b_b, 10 Jul 2014, 02:56 PM.
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Sydneyite
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Veritas
10 Jul 2014, 02:32 PM
b_b
10 Jul 2014, 01:58 PM
More proof house prices are not driven solely by credit / negative gearing / capital gains concession etc.
Who ever said otherwise?
Loads of people! Bears in particular, including on this site! We were/are always being told that the "only" fundamental is credit and that if it wasn't for the world-wide credit boom house prices would be far lower and more affordable blah blah blahdy blah....

There was even a discussion and assertion of this just yesterday - *you* even contributed to that thread!! :re:

Thread: http://australianpropertyforum.com/topic/10120418/
Specific posts asserting credit as THE driver of house prices: http://australianpropertyforum.com/single/?p=8492509&t=10120418

Massive
 
even rba says reason for house prices is credit growth
(although after discussing it further I think Massive now agrees there is a lot more to it).

Credit growth is a consequence of rising asset prices, not the other way around. If anything you should view credit as a *constraint* on house price growth - ie prices don't have to grow with credit availability, but they probably can't grow beyond what credit conditions could allow (in aggregrate).
Edited by Sydneyite, 10 Jul 2014, 03:12 PM.
For Aussie property bears, "denial", is not just a long river in North Africa.....
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