Does Sydney property still have growth left? The experts give their views.; Margaret Lomas, Shame Oliver, Louis Christopher, Terry Ryder, Andrew Wilson
Clearance rates is a bullshit statistic the reasons for this has been canvassed in detail elsewhere in this forum. I am thinking of buying a second one in Adelaide already, cheapest real estate in a capital city and great rental returns.
Only a hack would be investing in the Sydney market.
Only a hack would consider Adelaide property as an investment.
The lurker tells us we need 50% clearance rates to see falling prices.
This is a myth. 50% clearance rates just means 50% of property is being left on the market. I think you need a lot less than this being left around for prices to start falling. I would say the point at which prices would start to decline would be about 60-65%. At 60%, of every 1,000 going to auction every week would see 400 left on the market or unsold, increasing the for sale signs, which is always a sign of a cooling market from what was an overheated auction market previuosly.
You could say that if prices were dropped 50% tommorow, the clearance rates would be 99%. It does not neccessarily mean price growth although this is usually, clearly the case.
Might make a good thread,' At what clearance rate percentage are we likely to see prices decline ? '
The lurker tells us we need 50% clearance rates to see falling prices.
This is a myth. 50% clearance rates just means 50% of property is being left on the market. I think you need a lot less than this being left around for prices to start falling. I would say the point at which prices would start to decline would be about 60-65%. At 60%, of every 1,000 going to auction every week would see 400 left on the market or unsold, increasing the for sale signs, which is always a sign of a cooling market from what was an overheated auction market previuosly.
You could say that if prices were dropped 50% tommorow, the clearance rates would be 99%. It does not neccessarily mean price growth although this is usually, clearly the case.
Might make a good thread,' At what clearance rate percentage are we likely to see prices decline ? '
Incorrect. Try again. Failing to sell at auction doesn't mean failing to sell. An auction is only a part of a sales campaign.
I'm told that I'm a vested interest, so feel free to disregard my views.
In my opinion Sydney, Melbourne, and Perth have either topped out or will have topped out by the end of this year, although small nominal rises below inflation may continue albeit with lower sales volumes.
Brisbane and Perth will probably catch up somewhat in 2015. Whoops, I meant to type Brisbane and Adelaide.
Actually Peter, I tend to agree.
miw
13 Sep 2014, 04:20 PM
It's a bullshit statistic that, in a given market, seems to correlate quite highly with rising house prices.
In a bull market, can't clearance fall as sellers hold out for more?doesn't rising clearances reflect a state of realism entering the market? Which may mean its topping?
In a bull market, can't clearance fall as sellers hold out for more?doesn't rising clearances reflect a state of realism entering the market? Which may mean its topping?
All of these working hypotheses may hold water. I have no opinion. I just note that historically, strongly upward-moving markets have correlated with high clearance rates. I am not assigning any causality here. Just correlation. And the definition of "high" differs from place to place. In Brisbane, 55% is high. In Sydney, 55% is low.
The truth will set you free. But first, it will piss you off. --Gloria Steinem AREPS™
You have been backing slowly away from your boom rhetoric for some time now shadow, are you going to claim now that the last year's action down in Sydney "was" the boom? That you were right and now were in for modest gains?
Wishful thinking wishful thinking.
Shadow was hopelessly wrong about the Gold Bull Market. What else is he wrong about?
All of these working hypotheses may hold water. I have no opinion. I just note that historically, strongly upward-moving markets have correlated with high clearance rates. I am not assigning any causality here. Just correlation. And the definition of "high" differs from place to place. In Brisbane, 55% is high. In Sydney, 55% is low.
It's a bit like stock on market. It can mean many things.
Whenever you have an argument with someone, there comes a moment where you must ask yourself, whatever your political persuasion, 'am I the Nazi?'
Incorrect. Try again. Failing to sell at auction doesn't mean failing to sell. An auction is only a part of a sales campaign.
Incorrect....don't think so
Did you miss the part where I said the for sales signs increase. clown.....
As for Sydney , yes it still has a bit more to go, the delusion is still well and truly in place. Only last night, some 40+ year old aussie bull tells me prices will double in ten years. And only about a month or so ago another 40+ year old bull told me when prices double in ten years, blah blah blah. And how much money does he owe, only 7m. And I would say he only pays interest only, but I don't know that for sure.
But there both dopes, and like the 17 year old hairdressor down the road, they would not have a clue what is going on with the economy or the bigger picture here. One has just been made redundant, and the other has had many axings at their work, and is still lucky to have a job as he would be the first person I would sack there and they know that.
The delusional mania is still widespread, but it will help to keep the overbuilding in all capitals going for a bitlonger yet. But this will only help to make rents and prices cheaper in the long run when the dopes finally wake up when we have a zillion units but people with no jobs or part time jobs to try and pay their rent. Hope government rent assistance will be enough to cover their interest payments.
House price growth in Sydney will begin to cool next year as supply catches up with demand and the Reserve Bank of Australia starts looking at interest rate increases, according to the senior property analyst at ANZ Bank.
David Cannington told the Bloomberg Sydney Summit on Tuesday that although the perception of Sydney property was that is was overpriced, price growth had only caught up with other capital cities in recent years.
However, he said the end of stimulus policies – and the chance of an RBA rate rise next year – would help arrest that rate of growth, he said, to "sub-10 per cent a year".
"In 2015 the easy money will come to an end," he said.
"A lot of the market has become complacent and is expecting that it is here to stay.
"However, rates are not going to stay where they are for much longer and as that changes then that will contain some of the price growth," he said.
Foreign investment – and demand – for high density housing in Australia cities was important to jobs and development, he said, although he admitted that it was an element in property price inflation.
Coalition MP Kelly O'Dwyer agreed, adding that cities such as Sydney had become global property markets, and would attract foreign capital as other countries cracked down on overseas investors.
She said recent changes to investment rules in Canada and Singapore would send more investors towards Australian cities.
The delusional mania is still widespread, but it will help to keep the overbuilding in all capitals going for a bitlonger yet. But this will only help to make rents and prices cheaper in the long run when the dopes finally wake up when we have a zillion units but people with no jobs or part time jobs to try and pay their rent. Hope government rent assistance will be enough to cover their interest payments.
Bare in mind our policy makers have the benefit of others' unfortunate hindsight.
Do you really believe we won't be able to fill the newly constructed homes?
As far as others are concerned we have the worlds most liveable cities and a falling currency - what's not to like?
This has all happened before, albeit with a different demographic, and for different reasons.
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