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Sydney's Recent Housing Price Boom Is Really Just Making Up For A Slow Decade
Topic Started: 3 Oct 2013, 09:27 PM (4,788 Views)
peter fraser
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Sydney's Recent Housing Price Boom Is Really Just Making Up For A Slow Decade
Liz Tay
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Sydney house prices have shot up in the past few months, but long-term growth in the market still lags significantly behind other major Australian cities, according to a new report by the Housing Industry Association.

HIA reports that median house prices in Sydney have grown 13% in the past 12 months, double the average annual growth rate for the past decade.

Since June 2002, house prices have risen by a total of 31% in Sydney, compared to 79% in Brisbane, 80% in Melbourne and 143% in Perth, HIA reports.

“In this context, the recent acceleration of price growth in Sydney represents some redress given the ‘lost’ growth of the past ten years,” the association wrote.

From HIA’s report:
Posted Image

HIA said steady rental yields and mortgage rates suggested that Sydney’s rising house prices were “strongly supported by fundamentals in the market”, rather than symptoms of a housing price bubble as recently suggested in the media.
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Edited by peter fraser, 3 Oct 2013, 09:29 PM.
Any expressed market opinion is my own and is not to be taken as financial advice
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doubleview
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No offence but fuck you post some absolute shit peter!
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Sydneyite
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doubleview
3 Oct 2013, 09:45 PM
No offence but fuck you post some absolute shit peter!
Talk about shooting the messenger!! Sheez! :re:
For Aussie property bears, "denial", is not just a long river in North Africa.....
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doubleview
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Sydneyite
3 Oct 2013, 10:20 PM
Talk about shooting the messenger!! Sheez! :re:
tru that !
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goldbug
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Since June 2002, house prices have risen by a total of 31% in Sydney, compared to 79% in Brisbane, 80% in Melbourne and 143% in Perth, HIA reports.

The nation's lemon that's for sure.
Shadow was hopelessly wrong about the Gold Bull Market.
What else is he wrong about?
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miw
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goldbug
4 Oct 2013, 12:31 AM
Since June 2002, house prices have risen by a total of 31% in Sydney, compared to 79% in Brisbane, 80% in Melbourne and 143% in Perth, HIA reports.

The nation's lemon that's for sure.
It's a cherry-picked stat. Start from 1998 and you'll see a different result. Sydney had had its boom and started stagnating by the end of 2002. The rest of Oz followed on at various lags. 2 years for Brisbane.
The truth will set you free. But first, it will piss you off.
--Gloria Steinem
AREPS™
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Massive
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miw
4 Oct 2013, 12:35 AM
It's a cherry-picked stat. Start from 1998 and you'll see a different result. Sydney had had its boom and started stagnating by the end of 2002. The rest of Oz followed on at various lags. 2 years for Brisbane.
Yep.. There's a lot of very deliberate reporting on state of Sydney market at the moment....
Curious why its needed , as one would think its current performance speaks for itself
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peter fraser
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The market in Sydney is certainly hot at the moment, but I think that talk of a bubble in other cities has been overdone. The market has been rising and it has been doing that well before some commentators woke up to that. They were in denial for months, ignoring the data that was so obvious, but it's still a long way from a boom nationwide.

Now they seem to be panicking and talking of needing macroprudential measures to cool our "hot" market.

I'm suggesting that the market hasn't got to that point. Maybe it will, maybe it won't.
Edited by peter fraser, 4 Oct 2013, 08:26 AM.
Any expressed market opinion is my own and is not to be taken as financial advice
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Shadow
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Evil Mouzealot Specufestor

The charts below show Sydney house price movements over the past three decades.

Sydney boomed during the late 90s and early 2000s, that boom peaked in 2003 and then prices fell and stagnated for a few years.

Growth kicked off again in 2007 and has been trending up since then, with a couple of minor corrections along the way.

The current boom has another few years to run. I expect this boom to peak around 2015 with a median house price close to $1M (currently $729K).

On a price/income ratio basis, that would bring Sydney back up to around 2003 levels - i.e. a $1M median house price in 2015 would be no less affordable than prices were at the 2003 peak. In fact, affordability would be better, since interest rates are still likely to be lower than they were in 2003.

Posted Image
Edited by Shadow, 4 Oct 2013, 08:27 AM.
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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barns
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Shadow
4 Oct 2013, 08:23 AM
The charts below show Sydney house price movements over the past three decades.

Sydney boomed during the late 90s and early 2000s, that boom peaked in 2003 and then prices fell and stagnated for a few years.

Growth kicked off again in 2007 and has been trending up since then, with a couple of minor corrections along the way.

The current boom has another few years to run. I expect this boom to peak around 2015 with a median house price close to $1M (currently $729K).

On a price/income ratio basis, that would bring Sydney back up to around 2003 levels - i.e. a $1M median house price in 2015 would be no less affordable than prices were at the 2003 peak. In fact, affordability would be better, since interest rates are still likely to be lower than they were in 2003.

Posted Image
I agree with much of this. If you look over a decent time period (eg 15 years) house prices look like they exhibit nice steady growth but in reality often the bulk of the gains over that period are in steps that last between 9 months and about 2 years. We are currently in one of those steps, the question is whether it is a 9 month step or a 2 year step.

I'm thinking on the conservative side (due to International weakness) and wouldn't be surprised if the run-up in Sydney lasted until about March-April 2014. Having said that, once the US gets through the debt ceiling (political) mess and if they can post some decent numbers between now and March 2014 we may all be back in a more optimistic mood and Shadow's 2015 peak may be on the cards.
“You Keep Using That Word, I Do Not Think It Means What You Think It Means” - Inigo Montoya
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