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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 (4,787 Views)
doubleview
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pretty easy for the bulls to keep wanking on when the tables are rigged !!
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John Frum
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Sydneyite
4 Oct 2013, 04:28 PM
Is it worse now than 1 year ago when you were giving everyone the same advice? Turns out 1 year ago was a pretty good time to buy hey? Especially in Sydney! :dry:
I don't agree. it's going to be a horrible time to buy in Sydney until prices come down 20-30%. Anyone who hooks themselves up with a 25+ year mortgage in this current climate is straight up stupid. My parents sold off their Sydney IP a fortnight ago. Even if Black Pansy's pathetic attempts to scaremonger with talk of a transmuting market are correct, it's still a shit time to buy. If you've missed the boat and are locked out of the housing market, sit down and do the math to prove to yourself the stupidity of it. Make your peace and don't waste time railing against the madness of crowds; rent and wait, patiently.

Although I need to fess up - I've now realised a substantial pay increase contracting for one of the big 4 (recently got made redundant by my last employer, like a lot of non-financial businesses they're downsizing by the truckload) so I guess it's in my interests for the market to stay afloat for a while longer.

YMMV from other parts of the country, but from here I can't see this ending with a whimper. At least we won't be able to say we didn't see it coming this time.
"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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Admin
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Winning the battle, losing the war

October 5, 2013
Toby Johnstone

The prize was an ‘‘unliveable’’ terrace with a dirt backyard under the flight path – but for the first home buyers in the crowd it may as well have been solid gold.

Despite intense investor bidding for 54 George Street, Sydenham, first home buyer Ashley Spratt won the day, but she had to spend big to do so.

‘‘It’s been hard until today,’’ said the 29-year-old from Dural.

‘‘I’ve been looking for six months and I’ve probably chosen the worst six months to look because prices have increased significantly.’’

Sydney recorded another strong clearance rate of 81.8 per cent on Saturday. Due to the long weekend there were just 265 properties listed for auction.

Selling agent Tony Iskandar from First National Marrickville said first timers had largely disappeared from the market, but properties like this were the exception.

‘‘This is what they can afford - unliveable properties,’’ he said.

‘‘They’ve got no choice.’’

The senior economist from Australian Property Monitors, Andrew Wilson, said first home buyers are facing a ‘‘triple whammy’’.

‘‘They have lost their incentives, prices are rising and the economy is falling.’’

But wherever young people look, it is likely they will have to fight tooth and nail to win out against investors.

Read more: http://smh.domain.com.au/real-estate-news/winning-the-battle-losing-the-war-20131005-2v0pg.html
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Robert
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Investors and home buyers need to play the cards they are dealt, and at the moment that means buy RE, especially Sydney RE.

IF (or when) the circumstances change so should the response, admittedly RE is a somewhat illiquid investment with very high transaction costs, but when it is the only game in town.

I had an interesting conversation with a real Sydney RE bull the other day, he posed the following puzzle:

When Australia has sold off (or closed down)all of our industries, mining rights, agriculture, commercial RE, all that’ll be left will be residential RE. Since our national debt (private and public) must somehow remain asset backed it follows that the value Aussie residential RE must increase in price to provide this asset backing.

In the long run it would seem as if Sydney RE prices will be limited only by the willingness of foreign banks to support local mortgage lending. Welcome to the world of Californian style Balloon mortgages and Option ARM’s, surely nothing bad can result from using these tried and tested financial products!
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