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"We had to get a home" - desperate homebuyers camp out for three days to buy in Sydney; The only way to secure a property as Sydney house prices continue their inexorable rise
Topic Started: 4 Sep 2014, 08:26 AM (9,952 Views)
zaph
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Bardon
6 Sep 2014, 11:57 AM
Start getting concerned when no one turns up to buy, which is clearly not the case here.
It's a marketing ploy; a clever one. They got a newspaper article, which may have been a support (ie part of the ad deal) for their advertising or something they manufactured it.

Quote:
 
near Kellyville.


I assume Kellyville is a more desirable burb than burbs 'near' Kellyville. They've just made their 'Ponds development' a bit more like Kellyville when it's probably not.

The people camping out to buy a lot in 'Ponds development' are either stooges or they've been give a discount to camp out and buy in a burb near Kellyville. Either way, the Ponds development estate is now a little more desirable.
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Veritas
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Shadow
5 Sep 2014, 02:31 PM
That's right. 50% in five years is the same as doubling in ten years.

House prices have doubled every ten years on average for the past seven decades.

So the current pace of growth is not unusual.

Unless you think we've been in a bubble since the 1950s?

Also, during the previous five years (2003-2008) Sydney prices actually fell 20% in real terms. So this is really just catchup.

It's always good to look at things in context. Like many bears, you tend to look at brief periods in isolation, extrapolate those brief periods to infinity, and then get yourself all worked up into a panic over nothing. You need to look at the bigger picture.
Oh I'm looking at the bigger picture alright buddy.

And your "new normal", "structural shift" sctick might fool others but it doesn't fool me.

You can spin this all you like, but this is classic bubble territory.

Posted Image

Here is another big picture story for you: Australia has derived much of its wealth during the last ten years supplying the dirt that makes the steel that makes the housing in the largest property bubble the world has ever seen; China's.

That bubble is now bursting. What happens next do you think?

Buying any more investment properties Shadow?





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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John Frum
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zaph
6 Sep 2014, 12:26 PM
It's a marketing ploy
Agreed. But there's a little more to it than that.

This is the classic case of the old adage 'the medium is the message'.

It's not the story that's important - this could have happened even when prices weren't running as high as they are now.

It's the fact that the SMH are deciding to run with this and the China property collapse story as headline news that's important.

It's the clearest indication yet of the fear and uncertainty that's gripping society; a feeling that we've overstreched and created a huge problem, but at the same time are clueless as how to solve it, and have just decided to bury our heads in the sand - witness today's seamless return to spruik mode with the gushing front page headline article about spring 'hotspots'.

But whatever - the time to rationalise about the morality of it all has now passed. Best case now is to steel the nerve and brace for impact.

The all out bull assault on Sydney has life in it yet.
Edited by John Frum, 6 Sep 2014, 03:22 PM.
"It were not best that we should all think alike; it is difference of opinion that makes horse races." - Mark Twain on why he avoids discussing house prices over at MacroBusiness.
"Buy land, they're not making any more of it." - Georgist Land Tax proponent Mark Twain laughing in his grave at humourless idiots like skamy that continually use this quip to justify housing bubbles.
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Shadow
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Veritas
6 Sep 2014, 02:32 PM
And your "new normal", "structural shift" sctick might fool others but it doesn't fool me.
Good, I'm glad you weren't fooled into buying a house a few years ago when prices were cheaper. Look at those fools who bought a few years ago, and their houses that increased in value, and how they're paying down their loans with the lowest interest rates in history. Point at those fools and laugh while you rent your way to wealth.

Quote:
 
Australia has derived much of its wealth during the last ten years supplying the dirt that makes the steel that makes the housing in the largest property bubble the world has ever seen; China's.

That bubble is now bursting. What happens next do you think?

Buying any more investment properties Shadow?
House prices rose and people bought investment properties in the past before the mining boom existed... so... yep.

But my recommendation for you is to keep renting while laughing and pointing at the fools making money from property.
Edited by Shadow, 6 Sep 2014, 03:29 PM.
1. Epic Fail! Steve Keen's Bad Calls and Predictions.
2. Residential property loans regulated by NCCP Act. Banks can't margin call unless borrower defaults.
3. Housing is second highest taxed sector of Australian Economy. Renters subsidised by highly taxed homeowners.
4. Ongoing improvement in housing affordability. Australian household formation faster than population growth since 1960s.
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Ex BP Golly
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Shadow
4 Sep 2014, 10:03 AM
That's what the bears said about the 'Ruddprime' buyers in 2009. But Sydney house prices are up another 50% since then.
God! Everything that dribbles out of your mind just screams "BUBBLE". Keep up the good work Shady.
WHAT WOULD EDDIE DO? MAAAATE!
Share a cot with Milton?
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John Frum
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Shadow
6 Sep 2014, 03:28 PM
Good, I'm glad you weren't fooled into buying a house a few years ago when prices were cheaper. Look at those fools who bought a few years ago, and their houses that increased in value, and how they're paying down their loans with the lowest interest rates in history. Point at those fools and laugh while you rent your way to wealth.


House prices rose and people bought investment properties in the past before the mining boom existed... so... yep.

But my recommendation for you is to keep renting while laughing and pointing at the fools making money from property.
It will take another 10 years to determine whether those who bought 5 years ago have made a good decision. Good luck with that. And please don't remind me about your fortuitous personal situation if you decide to reply - i simply don't care.

In the meantime the renters are winning - I'm paying half as much as i would for an 80% mortgage on a similar size place.

And if the rental market falls any harder than it is currently i will negotiate a 15-20% reduction in the rent like i did with my London landlord during the GFC.
"It were not best that we should all think alike; it is difference of opinion that makes horse races." - Mark Twain on why he avoids discussing house prices over at MacroBusiness.
"Buy land, they're not making any more of it." - Georgist Land Tax proponent Mark Twain laughing in his grave at humourless idiots like skamy that continually use this quip to justify housing bubbles.
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Shadow
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John Frum
6 Sep 2014, 03:40 PM
In the meantime the renters are winning - I'm paying half as much as i would for an 80% mortgage on a similar size place.
You are making the classic bear mistake of only comparing current year costs. If you always look at it this way then it will never be a good time to buy (and it never has been a good time to buy) because it has always been cheaper to rent for one year than to pay the first year's interest on an equivalent home. Based on your logic, renters have always been 'winning'.

Those who bought in Sydney in 2009 were faced with exactly the same choice. But five years later they will have paid down a lot of their mortgages so their repayments have fallen, whereas rents in Sydney are up 20%. So they are now paying less in interest than it would cost to rent. Plus the value of their homes has increased by 50%.

In another ten years they will have fully paid off their homes and have virtually free accommodation for rest of their lives, while you will still be paying rent and falsely believing you've got a great deal because your rent is less than the first year's interest charges on an equivalent home. And you will continue to ignore the fact that your interest cost on an equivalent home would actually be zero by now if you had bought it 10-15 years previously.

Renting anything is cheaper if you only need it for a short period of time. But for things that you need for a long time, it's much cheaper to buy. You need to live in a home for your entire life. Instead of focusing on the costs for a single year, do a cost comparison over 70 years.
Edited by Shadow, 6 Sep 2014, 04:08 PM.
1. Epic Fail! Steve Keen's Bad Calls and Predictions.
2. Residential property loans regulated by NCCP Act. Banks can't margin call unless borrower defaults.
3. Housing is second highest taxed sector of Australian Economy. Renters subsidised by highly taxed homeowners.
4. Ongoing improvement in housing affordability. Australian household formation faster than population growth since 1960s.
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Sydneyite
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Passionfruit
4 Sep 2014, 11:38 AM
Don't panic if you have bought recently OR fear missing out. The truth is rather mundane. Like the stock market, property it has periods of intense activity and enthusiasm and those of fear and negativity. But the ride is smoothed out by two things - property is more illiquid than shares and property provides a basic need. Too many articles don't reveal the true course of property in Sydney. I've been actively looking, buying and selling (and advising friends and family) since 1992. My long experience particularly applies to inner and middle ring of Sydney.

If I drew a graph of house prices for aforementioned area(s) across those decades, yes, it would be an overall climb upwards. Quite an impressive one. (Same for shares, but more jagged pattern.) I'm very glad I took the initial plunge in late 96. Should have done so earlier, but young me thought debt was for staid middle aged people. And there was worrying talk of bubbles when a three bedroom house in Rozelle was 150K!!!!!

BUT on the bright side for those looking for a foothold now, ALL the periods of exuberance have been followed by "hangover" of sorts - a bout of pessimism or stagnation. Partly it has to do with people feeling frustrated, partly with external events...and more mysterious factors. Sometimes extra stock comes onto the market amidst enthusiasm, and that moderates prices. This means you can lose if you buy and sell within a few years. Eg, I bought in Annandale in 2010 (a hot year) and had to sell in a down time (early 2012) for 25k less. If I sold now, maybe 150k more. Why I sold? My dream home appeared for a bargain price! Just factor in a financial buffer zone and proceed with care.
Great post! And spot on re the Sydney market since the early 90s. You should sign up and post here more often.

PS - on the subject of people camping out to buy land releases in Sydney etc, that's been the norm for as long as I can remember - even back in the 80s when they used to have "Landcom" releases (state government release of new land for development) every now and then. The main reason for it is that these releases are/were often done at a fixed price per lot, on a first come first served basis, rather than an auction. It's nothing new or unusual.
Edited by Sydneyite, 6 Sep 2014, 06:01 PM.
For Aussie property bears, "denial", is not just a long river in North Africa.....
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skamy
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John Frum
6 Sep 2014, 03:40 PM
It will take another 10 years to determine whether those who bought 5 years ago have made a good decision. Good luck with that. And please don't remind me about your fortuitous personal situation if you decide to reply - i simply don't care.

In the meantime the renters are winning - I'm paying half as much as i would for an 80% mortgage on a similar size place.

And if the rental market falls any harder than it is currently i will negotiate a 15-20% reduction in the rent like i did with my London landlord during the GFC.
One day you will not be able to afford the rent on your place, whereas if you spent a few years in a cheaper place and put some elbow grease into it you might one day afford to buy in a good area and your holding costs will then decrease every year.

Rent money is dead money once it is out of your wallet you will never see sight nor sound of it again, that is a fact.
The truth is that most renters retire and are unable to afford to continue to live in their homes and end up out in the sticks in bogan areas. That is the reality of the cost that you pay for throwing away money on a rental that you cannot afford.


Renters do extremely poorly at building wealth at every stage of their lives

Posted Image

Posted Image

It is totally irresponsible to tell young people it is better to rent, all of the evidence show this to be a complete fabrication.

Sure you get charged to the hilt and people like banks etc get a big % of your gains and sure there is plenty wrong with the property market, but we only get two choices buy or rent. There is no contest in the debate as to which is better in the real world.


Rents rarely drop in Australian cities it is a pipe dream to build your hopes of future wealth on negotiating huge rent decreases.

Posted Image


Looks like you have to go back to 1998 to see a price drop and that was only in Brisbane.
Definition of a doom and gloomer from 1993
The last camp is made up of the doom-and-gloomers. Their slogan is "it's the end of the world as we know it". Right now they are convinced that debt is the evil responsible for all our economic woes and must be eliminated at all cost. Many doom-and-gloomers believe that unprecedented debt levels mean that we are on the precipice of a worse crisis than the Great Depression. The doom-and-gloomers hang on the latest series of negative economic data.
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Admin
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Quote:
 
Strong growth tipped for Sydney's bridesmaid suburbs

September 6, 2014
Antony Lawes

Suburbs that have been in the shadows of their higher priced neighbours are set to be among the most popular with home buyers this spring and into next year, new figures show.

Homebush, Petersham, Turramurra and Ryde are among 15 suburbs that will have price growth of about 12 per cent this financial year, the highest for Sydney, according to the Domain Spring Guide.

Others in this top tier include suburbs around Epping and Eastwood and others close to Parramatta and Mount Druitt.

Overall, the report found house prices should keep growing at between 5 and 7 per cent this financial year, well down on skyrocketing prices last year when the Sydney median increased by 17 per cent, and in some suburbs by almost 40 per cent. In the past five years overall house price growth has nudged 43 per cent.

This booming market led Reserve Bank governor Glenn Stevens to issue a blunt warning this week that the economy could be in for "nasty shocks" if buyers took too many risks while interest rates remained low.

ANZ chairman David Gonski also weighed in, saying that house prices could not keep going up forever.

But Domain Group's senior economist, Andrew Wilson, said while there was still a lot of confidence in the housing market, the capacity of buyers to keep pushing up prices was reaching its limits. That was why suburbs with the most growth this financial year would be the ones that had been overlooked or seen to be more affordable.

"People will start looking at suburbs that represent better value and are more affordable to them," he said. "It's those suburbs adjacent to the big movers and shakers, the bridesmaid suburbs, that still represent affordability ... and that's why we'll see stronger price growth [in those areas]."

In the west, Starr Partners chief executive Doug Driscoll said the market was still "between red-hot and white-hot". Buyers could see the successful rejuvenation of many suburbs and were "taking a punt" that others would follow.

"I think people are taking a longer term view of these things," he said. "They're seeing what's happening in these neighbouring territories and deciding it's only a matter of time [before their area will follow]."

It was different in Epping and Eastwood where one of the reasons for continued growth was the influx of developers following a rezoning for higher-density apartments, Dr Wilson said.

In the inner suburbs agents were also optimistic about spring, with most of the 18 surveyed by Domain predicting a very strong end to the year.

Raine and Horne chief executive Angus Raine said buyers were still "coming out of the woodwork" and such were their numbers that agents were fielding record turnouts at auctions.

"We regard eight people registering for an auction as a bull market," Mr Raine said. "A the moment we're hearing of 15 people-plus. There are buyers out there but they've got less and less to choose from."

But while the market was very strong, it was no boom.

"A boom is when there's all-time historic levels of activity with all-time historic sales figures and that's not the case at the moment."

Stephen Yates (pictured above) is not concerned about the blunt warnings dolled out by the Reserve Bank and David Gonski this week.

"I am a Sydney boy born and bred and I've watched all the cycles as they pass," he said.

"In Sydney you just can't lose."

Having attended more than 40 home inspections this year, the Rushcutters Bay resident is set on buying a house this spring. For Mr Yates spring represents opportunity.

"It is much harder to buy than it is to sell at the moment," he said.

Anticipating a flood of listings to come on to the market, Mr Yates said "this is the calm before the storm".

Read more: http://smh.domain.com.au/real-estate-news/strong-growth-tipped-for-sydneys-bridesmaid-suburbs-20140904-10chj1.html
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