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The media is lying to us about the booms in Sydney and Melbourne! Look at SQM asking prices!; The truth is prices are falling or flat at best - SQM Research debunks the lies!
Topic Started: 7 Oct 2014, 10:08 AM (2,574 Views)
skamy
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I don't know if Melbourne is like Sydney, but in Sydney getting an asking price from a vendor is like getting blood from a stone. So I wonder where they get these figures from. They may be covering just the small sector where house prices are actually advertised.

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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Sweetdish
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Alright Jack
7 Oct 2014, 10:45 AM
If prices were really rising then vendors would be raising their asking prices. Simple.
I think prices stopped rising in Sydney about 6 months ago. Or at least slowed down their growth significantly.
However, price rises before then were massive. I can quote real life examples all day but my estimate is that prices in Sydney went up about 25% from 2012 to early 2014.
skamy
7 Oct 2014, 12:21 PM
I don't know if Melbourne is like Sydney, but in Sydney getting an asking price from a vendor is like getting blood from a stone. So I wonder where they get these figures from. They may be covering just the small sector where house prices are actually advertised.

Thats another great point. Back on 2012 you sometimes got discounts on the asking price. Now the asking price is more of a "guide" that is quickly disregarded and usually about 15% under the actual asking price.

A few times this year I offered considerably more than the price range the were quoting. For example I offered $900K for a 2 bedded advertised at $800K plus and $750K for another that was advertised at "above" $600K. Both my offers were quickly rejected without even an offer to negotiate. I was that far off. Asking prices have nothing to do with how much they are expecting.
Edited by Sweetdish, 7 Oct 2014, 01:28 PM.
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Mallard
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From the SQM methodology document:

"Auctions are left out of the calculation unless an asking price is provided after the event"

So that index is stuff that doesn't sell at auction or isn't put up for auction. In Sydney that means it's pretty much useless as a gauge of prices.
Edited by Mallard, 7 Oct 2014, 01:54 PM.
Collecting desperation.
Ex-Bp Golly April 2 2015. "I see with a slight overshoot -70% [fall in Sydney house prices] as being well within possibility"
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cokatoo56
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zaph
7 Oct 2014, 11:55 AM
Maybe, maybe not.

When I purchased the asking price was generally higher/at than the sales price in the area - it was a weak market. The local market has now strengthened and the asking prices have barely changed, but the sales prices are now above the asking prices. Also the percentage of sales that have no asking price (auction) has dramatically increased.

Perhaps the same is happening in Syd/MEl?

As Trojan has pointed out it's the final sales price that determines the strength of the market.

Relying on just one data source when there are many available is dangerous.


Yes the same is happening in Sydney. Most units I have seen for sale have a asking price lower than recent similar sales in the same neighbourhood, sometimes even the same building. I have seen asking prices of $450k, when the 2br unit actually sold for $600k. The agent is either dishonest or knows nothing about his business. How can you be so wrong about the price ?
My understanding is that agents are aware that properties are highly priced, but want to attract a maximum of people to inspect. F*** the property agent code of conduct that says that agents should not do that.
Agents know that buying a property is not always a well considered decision, but rather because the buyer "fell in love" with the unit. When the customer falls in love with a unit, he/she stops thinking clearly and may over commit financially. Not the agent's concern if you can't pay your mortgage. Low asking prices also help agents to attract buyers afraid of missing the property train. More bidders at an open auction means more competition to get the unit, and higher offers.
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peter fraser
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Elastic
7 Oct 2014, 10:40 AM
I had noticed that Melbourne graph previously and wondered what was going on there.
It would be good for Louis Christopher to give his take on why the asking prices are so out of whack with other data.
SQM provide a free report that people interested in the property market should sign up for - it's free WTF.

here is what todays report contained:-

Quote:
 
Sale Listings Unusually Fall During September as Buyers Swoop in on Stock

The number of Australian residential property sale listings abnormally decreased during September, signalling rapid stock level absorption, particularly in Sydney. Nationally, the number of unsold properties on the market has been recorded at 339,344 for September 2014 – a -2.4% decrease month-on-month and -1.1% decrease year-on-year.
Posted Image

Sydney is leading the charge, with substantial decreases both on a monthly and yearly basis, which coincides with SQM Research’s predictions that this capital city would be the front-runner in 2014 housing recovery, and continue to be into 2015.

We can see that contrary to the seasonal trend which commonly sees an influx of listings hit the market at the beginning of spring, all capital cities recorded monthly decreases in stock, excepting Darwin which recorded a slight increase at 0.2%. Darwin has also recorded a staggering increase in stock on market on a yearly basis, with the number of unsold properties on the market rising by 26.4% since September 2013.

SQM Research has recently stated in our latest installment of Christopher’s Housing Boom and Bust Report that we believe Darwin to be undergoing a correction, and believes that the growing excess in stock levels can be attributed to this.

Alongside this, the nation’s asking prices have perked up over the past month, with asking prices for houses rising by 0.7% and asking prices for units rising by 0.5% during September.


I doubt that Louis is expecting price falls in Sydney before Xmas especially whilst stock levels are falling.

Full Report Here
Edited by peter fraser, 7 Oct 2014, 06:08 PM.
Any expressed market opinion is my own and is not to be taken as financial advice
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Stan
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Alright Jack
7 Oct 2014, 10:45 AM
If prices were really rising then vendors would be raising their asking prices. Simple.
After the insane 2010 run up in prices, many parts of melbourne are still recovering from crapping out shortly afterward.

I don't know how this fits in with the data, but I'm sure it makes a difference either way.

Much of the msm focuses on select examples of price growth in certain areas, but there's always a reason for that growth in those areas.
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Mike
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peter fraser
7 Oct 2014, 06:05 PM
SQM provide a free report that people interested in the property market should sign up for - it's free WTF.

here is what todays report contained:-




I doubt that Louis is expecting price falls in Sydney before Xmas especially whilst stock levels are falling.

Full Report Here
Sydney has very low levels of stock, prices are not going to slow down much until the supply response hits the market to increase supply.

Compare Sydney & Perth almost the same levels of stock. Perth is presently at balanced market, supply is about equal to demand, but still a nice decline in supply at 3.4% for the start of spring.

Then look at Sydney a population more then double Perths with a supply of properties about the same, that singnals a very very tight supply.

I dont not see how prices will not continue to increase with such a restricted supply. Buyers in Sydney are in for alot of pain for along time to come looking at these figures.
Edited by Mike, 7 Oct 2014, 06:27 PM.
http://mike-globaleconomy.blogspot.com.au/
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Blondie girl
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Trojan
7 Oct 2014, 10:49 AM
Hahaha. SQM aggregate asking prices are held in higher regards than ABS median house prices collected from actual sales (which the media reports)

Do you also look at eBay $1 starting bids for iPhone and ignore the completed auction prices as well?
:lol
You have raised an absolutely valid point.
Be flexible when checking data.
Edited by Blondie girl, 8 Oct 2014, 01:02 PM.
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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