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Back to boom: Sydney house prices jump 14% in 2014 - APM; Sydney property market is in hyperdrive while the rest of the country is in second gear
Topic Started: 29 Jan 2015, 08:49 AM (5,611 Views)
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Back to boom: Sydney house prices jumped 14 per cent in 2014

January 29, 2015 - 12:15AM
Stephen Nicholls

Sydney is back in "boom" mode for 2015 after new data shows house prices jumped a surprising 14 per cent last year.

As this comes on the back of more than 15 per cent a year earlier, Domain Group senior economist Dr Andrew Wilson said the figures confirmed the Sydney property market is in "hyperdrive while the rest of the country is in second gear".

Dr Wilson said most of the growth was in the December quarter. "The Sydney boom is back ... the median house price increased 4.1 per cent – that's the strongest increase of any of the quarters of the year."

Dr Wilson is forecasting price growth of between 7 and 10 per cent for 2015. "And closer to 10 per cent," he said.

Some regions had extraordinary house price growth last year, with the upper north shore and north-west shooting up 21.8 per cent.

Anthony Jasperizza, of Anthony Trees First National in Eastwood, said Asian investors accounted for 65 per cent of the sales in his area. "There have also been a lot of expats moving back ... and anticipation of the new Rouse Hill railway line has had a big influence on Epping," he said.

The figures showed just 7.8 per cent growth in the east and inner city, but Alexander Phillips of Phillips Pantzer Donnelley said individual homes had extraordinary growth over the year. "They were bought in 2013 and sold a year later – one went up 17 per cent and another went up 21 per cent," Mr Phillips said.

Inquiry levels were up 20 per cent on last January. "It feels like [the strong market] will definitely last well into the first quarter and into the second quarter," he said.

"You would have thought it would have slowed down, but it just hasn't.

"And because of this talk of interest rates going down even further, that's led to even more people inquiring."

Dr Wilson said across Sydney, most of the house price growth was in the $1 million to $2 million price range, although prestige prices had grown about 10 per cent over the year.

Read more: http://news.domain.com.au/domain/real-estate-news/back-to-boom-sydney-house-prices-jumped-14-per-cent-in-2014-20150128-1304n8.html
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John Frum
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Just as I predicted 7 months ago on this forum.

Bank shares smashing all time highs again off the back of this bubble.

It's going to be an almighty tempest that rocks this city when the champagne finally stops flowing.
"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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Sydneyite
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John Frum
29 Jan 2015, 08:55 AM
Just as I predicted 7 months ago on this forum.

Bank shares smashing all time highs again off the back of this bubble.

It's going to be an almighty tempest that rocks this city when the champagne finally stops flowing.
Nah - we have been here in Sydney many times before - I personally experienced massive booms followed by corrections in 1990-ish, 2004/05, and even 2008/09. The first 2 of those were far bigger booms than what we have just seen in the last couple of years. The low interest rates in the current climate will shield/protect most of the market from the correction that will come, which means the downturn will be a whimper rather than a bang. But you will learn, padwan......
For Aussie property bears, "denial", is not just a long river in North Africa.....
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Sydneyite
29 Jan 2015, 09:32 AM
Nah - we have been here in Sydney many times before - I personally experienced massive booms followed by corrections in 1990-ish, 2004/05, and even 2008/09. The first 2 of those were far bigger booms than what we have just seen in the last couple of years. The low interest rates in the current climate will shield/protect most of the market from the correction that will come, which means the downturn will be a whimper rather than a bang. But you will learn, padwan......
Was unemployment up almost 50% since 2008.

While every ponzi measure availale has been used over this time.

Dopes overseas could not see it coming either, they could not see the jokes and bullshit the government were up to while CONSTANTLY feeding them bullshit, just like here, where we learn it all from them. Yet here we had the hinsight to see where pumping debt and house prices led to. But somehow we decided to head down the exact same path to economic ruins.

You cannot see that wage growth and rent growth are over sydneyite.

Was all good while it lasted.

You sound like the dopes in that Peter schiff video. Thought they knew everything, laughed and riduculed those who were speaking the truth and could see the obvious, and were then proven to be the dopes they were. That video was 2006, all prices are cheaper than then. California 20% cheaper than tens years ago, depaite the recent ponzi rises from zero rates for seven years and ten trillion in stimulus.

The expert dopes had no clue, what chance in hell do you think you have. Many areas of Sydney had falls of 20% by the end of 2012. Dont remember last time, what ponzi measures are left this time round when it starts falling.


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John Frum
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Sydneyite
29 Jan 2015, 09:32 AM
Nah - we have been here in Sydney many times before - I personally experienced massive booms followed by corrections in 1990-ish, 2004/05, and even 2008/09. The first 2 of those were far bigger booms than what we have just seen in the last couple of years. The low interest rates in the current climate will shield/protect most of the market from the correction that will come, which means the downturn will be a whimper rather than a bang. But you will learn, padwan......

what's our leverage looking like now compared to other times? How are the wage and growth prospects looking this time?

Keep the fantasy going if it pleases you (assume you do that frequently from your use of a star wars quote), others are hedging against reality.

"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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peter fraser
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John Frum
29 Jan 2015, 09:53 AM

what's our leverage looking like now compared to other times? How are the wage and growth prospects looking this time?

Keep the fantasy going if it pleases you (assume you do that frequently from your use of a star wars quote), others are hedging against reality.
Leverage is high but rates are down and possibly going lower.

A great time to borrow on the proviso that borrowers don't take on too much debt and get caught when rates rise. It's a terrible time to be dependant on interest earned on deposits. Even $1M in deposits won't earn enough to live on in the current market.
Any expressed market opinion is my own and is not to be taken as financial advice
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Sydneyite
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John Frum
29 Jan 2015, 09:53 AM
Sydneyite
29 Jan 2015, 09:32 AM
Nah - we have been here in Sydney many times before - I personally experienced massive booms followed by corrections in 1990-ish, 2004/05, and even 2008/09. The first 2 of those were far bigger booms than what we have just seen in the last couple of years. The low interest rates in the current climate will shield/protect most of the market from the correction that will come, which means the downturn will be a whimper rather than a bang. But you will learn, padwan......

what's our leverage looking like now compared to other times? How are the wage and growth prospects looking this time?

Keep the fantasy going if it pleases you (assume you do that frequently from your use of a star wars quote), others are hedging against reality.

As Peter said - rates are low, and will stay so during any housing downturn. Also while aggregate leverage may be high nationally, it's been flat in GDP relative terms for over a decade now - so as high as it was in the 04/05 and 08/09 Sydney downturns, but interest rates were higher then on both occassions, so better now actually.

As for wage and growth prospects, how do you think they were and looked in 1990/91??? I can tell you that right now looks like economic panacea compared to that period.... and yet house prices did not "crash" in the 90s, even as unemployment hit 11%, interest rates were 10%+, and so on. They did correct 10-20% in some parts of Sydney though (only a 10% drop in aggregrate median prices though) - after more than doubling during the boom of course. I bought my first house in 1992 by the way.

So I don't think I'm the one living in a fantasy world - it's your "walking around like John Frum" after the "crash" that is the fantasy! :re: Anyway - 7 months to go now is it? We will see.
Edited by Sydneyite, 29 Jan 2015, 10:29 AM.
For Aussie property bears, "denial", is not just a long river in North Africa.....
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John Frum
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Sydneyite
29 Jan 2015, 10:26 AM
As Peter said - rates are low, and will stay so during any housing downturn. Also while aggregate leverage may be high nationally, it's been flat in GDP relative terms for over a decade now - so as high as it was in the 04/05 and 08/09 Sydney downturns, but interest rates were higher then on both occassions, so better now actually.

As for wage and growth prospects, how do you think they were and looked in 1990/91??? I can tell you that right now looks like economic panacea compared to that period.... and yet house prices did not "crash" in the 90s, even as unemployment hit 11%, interest rates were 10%+, and so on. They did correct 10-20% in some parts of Sydney though (only a 10% drop in aggregrate median prices though) - after more than doubling during the boom of course. I bought my first house in 1992 by the way.


I think its per capita gdp we're interested in here:

Posted Image

and does it not concern you that financials make up over 40% of the ASX now?:

https://twitter.com/David_Scutt/status/560689520585093121

... and of that 40%, the majority of the business is making money from mortgages? It's absurd to even compare the current situation to 20-30 years ago. The "we've been here before" argument is pure smoke and mirrors.
Edited by John Frum, 29 Jan 2015, 05:58 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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Veritas
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peter fraser
29 Jan 2015, 10:04 AM
Leverage is high but rates are down and possibly going lower.

A great time to borrow on the proviso that borrowers don't take on too much debt and get caught when rates rise. It's a terrible time to be dependant on interest earned on deposits. Even $1M in deposits won't earn enough to live on in the current market.
But you have to take on lots of debt to buy the bloody things.

All time highs of debt in fact.
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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Veritas
29 Jan 2015, 05:49 PM
But you have to take on lots of debt to buy the bloody things.

All time highs of debt in fact.

This is what the bulls happily forget about when doing their merry dance over interest rate falls. You're extending your bet of economic prosperity for 30 years, and in the wake of an unprecedented era of good fortune for this country.

My bet is that thanks to that boom sydneyite payed his 91 purchase off a lot quicker than 30 years, assuming he didn't refinance to lever up into property harder. Can you really say the same for the FOMO kids diving into cashflow neutral/negative IPs now?
"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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