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How To Profit From Australia’S Pending House Price Crash


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He's just sold a house in Melbourne at a loss; http://thenewaustralian.org/?p=1013

(look at the 7th comment)

After all those years he yacked on about holding and constant inflation floating owners to mega wealth.

Who would ever have thought that I would be bestowing the virtues of selling and not holding…………………never say never, I guess.
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My stepfather has just sold a house in Hervey Bay. (Well, the contract is signed at least - fingers crossed). Price was 21% down on the price paid in 2005. This was a good property, 1980s house on a 1400sqm block, with huge 4 bay shed etc, in a good location, and we priced it to sell. We had 30 sets of people through, but only one offer. Once you throw transaction costs in, he is about 25% down on the deal. We are lucky. We are happy to sell at this price, as it is clear the market has much, much further to go. Volumes have plummetted (less than half relative of recent years) and "normal" places on normal blocks aren't even getting viewings.

The crash has already hit the secondary markets. I've seen similar drops on the Sunshine Coast, and believe the Gold Coast is similar if not worse. High end properties have been hit hardest from what I can see. There are, of course, lots of deluded wannabe sellers. Houses priced at peak in my local just sit on the market - some have been for sale for well over 18 months.

Ditto a coveted location on the NSW Mid-North Coast. 2 and a half years to sell at over 50% discount to the 2007 valuation.

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the sympathy is oozing through the pores of my skin.

I don't think he's facing destitution just yet though. It's an interesting barometer for those who have paid attention to the "Australia demons" thread for some years however.

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If you dont mind my asking what price range was the property in. Have been watching Hervey Bay lately as its a nice spot. Will be there in a few months and am thinking of possibly relocating from Adelaide.

$335k (2005)

$267k (2012)

It is in Torquay, so one of the more desirable suburbs (along with Urangen), has a huge block of land, in a quiet street and is a short walk from sports centre, school, shops etc.

The negative is that the house needs some internal rennovation. (1980s build, 4 bedroom, but a bit strange.)

House+unit sales in Torquay were 369 in 2007 and had run at similar levels for the preceding decade. In 2011 there were 72 sales, which is about the stock of a single agency, and there are dozen at least. If you decide to buy there, go in hard and make embarrassingly low offers. Someone will bite.

Unit price growth has been negative in Hervey Bay every year since 2007. House prices since 2009. The selling agent told me, and RP data seems to support him here, that anything much over $300k isn't selling, and he thinks that there is a fair bit more pain to come. It is a completely secondary/tertiary market and prices there are determined by spillover from people retiring from the big cities, overseas, and speculators. There is nothing in the area other than an excellent microclimate, and not so long ago houses here were dirt cheap. I suspect that is where they are going again. The demographics of Torquay (and most of the rest of Hervey bay, again RP Data) are 31% single mums!!!, 30% childless couples (mainly retirees), couples with children (19%), group households (13%), and lone households (7% mainly retirees I suspect). Median household income is less than 35k and a third of households are on less than 25k, so even at these prices, houses are over priced at 8+ times local earnings. On the plus side, this means that a lot of things are cheaper there than, say the Sunshine Coast.

Interesting fact: Did you know Hervey Bay had the worlds largest mobility scooter parade in the world? Oh yes indeed, it's not just for the proximity to Fraser Island that HB is famous!

Edited by Tiger Woods?
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He's just sold a house in Melbourne at a loss; http://thenewaustralian.org/?p=1013

(look at the 7th comment)

Impossible. No one loses on property in Melbourne. :lol:

Okay, Schadenfreude done with. I'll be good now. Can't say he wasn't warned though.

Oops. Here it comes again :lol::lol::lol:

(At least he has the intelligence to know when to bail though. Lesser people get wedded to their positions and lose a lot of money.)

Edited by Tiger Woods?
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$335k (2005)

$267k (2012)

It is in Torquay, so one of the more desirable suburbs (along with Urangen), has a huge block of land, in a quiet street and is a short walk from sports centre, school, shops etc.

The negative is that the house needs some internal rennovation. (1980s build, 4 bedroom, but a bit strange.)

House+unit sales in Torquay were 369 in 2007 and had run at similar levels for the preceding decade. In 2011 there were 72 sales, which is about the stock of a single agency, and there are dozen at least. If you decide to buy there, go in hard and make embarrassingly low offers. Someone will bite.

Unit price growth has been negative in Hervey Bay every year since 2007. House prices since 2009. The selling agent told me, and RP data seems to support him here, that anything much over $300k isn't selling, and he thinks that there is a fair bit more pain to come. It is a completely secondary/tertiary market and prices there are determined by spillover from people retiring from the big cities, overseas, and speculators. There is nothing in the area other than an excellent microclimate, and not so long ago houses here were dirt cheap. I suspect that is where they are going again. The demographics of Torquay (and most of the rest of Hervey bay, again RP Data) are 31% single mums!!!, 30% childless couples (mainly retirees), couples with children (19%), group households (13%), and lone households (7% mainly retirees I suspect). Median household income is less than 35k and a third of households are on less than 25k, so even at these prices, houses are over priced at 8+ times local earnings. On the plus side, this means that a lot of things are cheaper there than, say the Sunshine Coast.

Interesting fact: Did you know Hervey Bay had the worlds largest mobility scooter parade in the world? Oh yes indeed, it's not just for the proximity to Fraser Island that HB is famous!

Thanks for that - interesting stuff

Have only spent a few weeks there, as you say a great climate. Am living and travelling in a caravan at the moment so will get to spend amonth or so there and take a look around. I'm not looking for work so it may suit us.

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Do you mind if I ask where exactly?

On a related note, I know a certain section of Noosa properties that would have been 3 million are now priced at 2.

Hawks Nest. The demographics would be very similar to those you quote for Hervey Bay, I suspect, with property prices driven to ridiculous levels from the mid 90s until the crash around 2008 by retirees cashing in their piles in Sydney. Again similar to your Hervey Bay example, local agents have sold next to nothing over $300k for years, making the 7 figure hopes of my relative seem rather ambitious, in hindsight. To give some context, however (and an idea of the madness that prevailed just a few years ago), a number of neighbouring half-size blocks all sold for over a million dollars in 2006/7. Most have been built on, one or two remained empty last time I visited. I should imagine that those lucky "owners" of the new properties would be sitting on a loss of c.70%, if they could find anyone to buy.

This story is replicated all the way along the coast north of Sydney. When I worked in construction over there, I was acquainted with a few large coastal developments aimed at the retiree/"weekender" market, all priced in 7 figures for poorly-constructed mini-mansions, built on former waste-land - utter madness.

Regarding the title of the original post, I might suggest that the best way to profit from Australia's house price crash would be to cash in for whatever you can get and buy in the UK while the exchange rate holds - property here look pretty reasonable to me when priced in AUD.....

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I'd be seriously tempted to make silly (low) offers along the great ocean road. As Melbourne grows, in 10-20 years it will still be one of the key playgrounds....

Edited by wherebee
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  • 433 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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