Sydney Boom Buyers

[Guest Winners and Losers]

DON'T BUY NOW!

http://www.smh.com.au/news/national/proper...6335933244.html

"For those who bought in late 2003 and put down a 10 per cent deposit, if they were to sell today, on average, you would be in the red after you take into account transaction costs," he said. "There are more and more of these people out there."

A Macquarie Bank economist, Rory Robertson, said the scale of house price falls in Sydney was likely to affect highly geared investors who bought at the peak of the property boom more than owner occupiers planning to live in their home long-term.

"It's certainly a big issue for property speculators who bought in 2003," Mr Robertson said.

Mr Christopher said this week's Reserve Bank interest rate rise could drive Sydney prices down another 5 per cent by the end of the year, leaving many more families with negative equity.

However, the Reserve Bank said the official inflation rate "can be expected to be noticeably higher" in future because of soaring fuel prices.

The Prime Minister, John Howard, admitted yesterday that prices for basics like bread, milk and fuel would rise. "Some increases in prices are unavoidable; high petrol prices are inflationary," he told Melbourne radio. "I am very conscious that people are forking out a hell of a lot more for petrol now than they have been at any time in their lives."

Sydney, we actually believed that we were going to have a recovery before this rate hike. Now we believe there's a real chance house prices will fall by up to 5 per cent this calendar year, meaning the total fall since the peak will equate to about somewhere to 14 to 15 per cent.

There may be some people who borrowed heavily, either as owner-occupiers or investors, who might say, well, it's time to cut our losses and get out of the market.

He says while property prices are likely to fall and rents increase, he's advising first home buyers to bide their time.

Edited May 9, 2006 by Winners and Losers

[Warwickshire Lad]

Things are well underway in Australia then. Wish I could say the same here.

Once the Negative Equity stories start coming in, that'll finish off this Government for sure since NE is one of the reasons why many still don't vote Tory.

[expatowner]

DON'T BUY NOW!

There may be some people who borrowed heavily, either as owner-occupiers or investors, who might say, well, it's time to cut our losses and get out of the market.

He says while property prices are likely to fall and rents increase, he's advising first home buyers to bide their time.

Even if Sydney fell by 50% it would still be overpriced.

Dont compare it to the UK

[Guest Winners and Losers]

Even if Sydney fell by 50% it would still be overpriced.

Dont compare it to the UK

What is the difference then? I am seriously interested to know what makes the UK so different from the rest of the world and, apparently, not over priced and immune to property price falls? Are the fundamentals of affordability, lack of FTB's, poor rental yields etc. etc. not the same? Even if London were to fall 50% it would still be overpriced.

[Warwickshire Lad]

Even if London were to fall 50% it would still be overpriced.

I agree. As I've said before, London is an overrated, overhyped dump. To live there again someone would have to PAY ME.

[laurejon]

Just come back from Sydney, the mood on property is very Bearish and yet there are some die hards who just wont give up.

Met a guy in a coffee shop in Manly, who works in IT. He has just bought a development site in Coffs Harbour for 1.7M Dollars, and doesnt know how much it will cost to develop, or who would do the work.

His view......"Australia is a fantastic investment, property has been rising for ten years its not going to stop now, it different from the rest of the world"

Quite how Australia is impervious to the vagaries of the Global Economy mystifies me!!!.

A fool and his money are soon, parted.

The taxi driver who took me from Manly to the airport also ranted about property, he was just shelling out 35K on an American Walnut Kitchen, reckons it will put 150k on his unit!!!!.

[Guest Winners and Losers]

Quite how Australia is impervious to the vagaries of the Global Economy mystifies me!!!.

Hey Laurejon, nice time in downtown Manly? I was born in Manly Hospital, for my sins.

Quite how the UK is impervious to the vagaries of the Global Economy mystifies me!!!.

As I understand it, units are being hit the worst. Adding 150k? As we say down under, he's got buckleys and none.

Edited May 9, 2006 by Winners and Losers

[laurejon]

Yep Great time, in the Ivanhoe, and the New Brighton, particulary the Shark Bar

So I guess you were born on Eastern Hill ?. Very Posh

Manly is quite different as there is a huge demand for rental units, but they are now seeing voids as the tourists all leave for the winter. That said, the rental yeilds are for sure up on last year at a 5% hike.

475 bucks a week will get you a two bed Art Deco unit on the Eastern Hill, and great if you like the Wharf Bar and dont want to walk too far to get home.

For me, I love Sydney, but the stark reality is that third world wages will not stretch to securing any future in Sydney. There is a huge imbalance between the cost of living today, and the wages on offer.

55K is considered a good wage in Sydney, yet it would not get you a room in a shared unit and a few beers in the Wharf Bar each week. In fact, if you drink German Lager like I do, it will set you back 7.50 a schooner.

[Guest Winners and Losers]

Yep Great time, in the Ivanhoe, and the New Brighton, particulary the Shark Bar

So I guess you were born on Eastern Hill ?. Very Posh

Manly is quite different as there is a huge demand for rental units, but they are now seeing voids as the tourists all leave for the winter. That said, the rental yeilds are for sure up on last year at a 5% hike.

475 bucks a week will get you a two bed Art Deco unit on the Eastern Hill, and great if you like the Wharf Bar and dont want to walk too far to get home.

For me, I love Sydney, but the stark reality is that third world wages will not stretch to securing any future in Sydney. There is a huge imbalance between the cost of living today, and the wages on offer.

55K is considered a good wage in Sydney, yet it would not get you a room in a shared unit and a few beers in the Wharf Bar each week. In fact, if you drink German Lager like I do, it will set you back 7.50 a schooner.

Now you're bringing back not too distant memories. Had a particularly wild night in the Shark Bar last year, and yes, it is definitely full of sharks. Half my family live in Manly, def pricey. Used to be a complete sh*thole, full of smack heads. Imported beer is pricey. Fortunately for me I was earning about 65k in Newcastle, so my money went further. Lived on Northern Beaches all my life and property has always been v. expensive. My brother was working at Wharf Bar when I left. It might be time for a little holiday.....

[right_freds_dead]

i dont really give 2 shades of sh1t about sydney house prices.

im living in england not bondi beach.

dont know why theres so much focus on a country thats on the other side of the world.

[Guest Winners and Losers]

i dont really give 2 shades of sh1t about sydney house prices.

im living in england not bondi beach.

dont know why theres so much focus on a country thats on the other side of the world.

Perhaps you should just run along and mind your own business then? It was me btw.

dont know why theres so much focus on a country thats on the other side of the world.

Of course you don't, something like that could never happen here so we should refrain from using any comparatives relating to the global boom in property prices. Right you are, I do apologise for offending your delicate sensibilities.

[North London Rent Girl]

What is the difference then? I am seriously interested to know what makes the UK so different from the rest of the world and, apparently, not over priced and immune to property price falls? Are the fundamentals of affordability, lack of FTB's, poor rental yields etc. etc. not the same? Even if London were to fall 50% it would still be overpriced.

Great thread, WAL - nice one. I completely agree with you about this.

A 50% drop in my area would put a reasonable two-bed flat at about the 130-150 grand mark - doesn't sound cheap to me. When I joined this board I was disappointed that people were talking about 30% falls as though they'd be enough - at this point I think that 50% would be barely adequate. I'm not talking about what's going to happen but about what I can afford as a person earning a decent amount because that's the only thing that matters to me when it comes to buying.

edit - RFD why doesn't it matter what happens in oz? reasons please.

Edited May 9, 2006 by North London Rent Girl

[Boags]

Great thread, WAL - nice one. I completely agree with you about this.

A 50% drop in my area would put a reasonable two-bed flat at about the 130-150 grand mark - doesn't sound cheap to me. When I joined this board I was disappointed that people were talking about 30% falls as though they'd be enough - at this point I think that 50% would be barely adequate. I'm not talking about what's going to happen but about what I can afford as a person earning a decent amount because that's the only thing that matters to me when it comes to buying.

edit - RFD why doesn't it matter what happens in oz? reasons please.

As for the West Coast and more specifically Perth and the SW region, real estate is still on the up!

Price of 600 sqm of land has risen as much as $100k in 5- 6 months. This is crazy speculation IMO. The arguments and spin from the VI is the resources boom and migration into WA from interstate and overseas.

Such is the frenzy here that people are camping out to secure that postage stamp sized square/rectangle sandpit.

The recent interest rate rise may lead to a slow down, but unless there are consecutive rises in the coming months, then we will see more land being snapped up.

IMO, the price of these parcels of land are way overpriced. They ultimately end up with a legoland house next to a few hundred similar mcmansions in a bland sterile Trueman show type environment with absolutely no soul!!

The thing is about WA, it has never experienced drops, and there is a similarity with Scotland in this regard.

The locals only seem to think the only way is up!!

Edited May 9, 2006 by Boags

[munimula]

Hey Laurejon, nice time in downtown Manly? I was born in Manly Hospital, for my sins.

I made Manly my home when I went to Australia. Lovely spot, nights down at the Steyne, sipping a VB etc.

Two problems there - high rise buildings block the sunlight on the beach very early in the afternoon, like in Surfers Paradise and the water is freezing! If you like going in the water then give me a spot with the gulf stream anyday.

[mercsl]

Lived in Australia all during the 80's and early 90's and their house price crash. Australia is different as they have negative gearing, any 'loss' from real estate can be offset against any other income that you earn.

http://www.propertyinvesting.com/strategie...ivegearing.html From what I remember if you had a good accountant and set up a family trust with rental properties in it you could really go to town fiddling things and deducting car expenses even

Rental demand seems still very strong in Sydney, recall article few months ago at 30 people or so turning up wanting to rent a place so not much chance of BTL'ers bailing out there I suspect

People think Australia has loads of land but

Sydney has a lack of new land available as it's pinned in by the Blue Mountains and lots of areas are too minging to live in and hot, no point living in Sydney if takes you ages in traffic to get to the beach. Hence desirable areas are very pricey especially eastern suburbs and the good beaches.

Edited May 9, 2006 by mercsl

[Guest Winners and Losers]

Lived in Australia all during the 80's and early 90's and their house price crash. Australia is different as they have negative gearing, any 'loss' from real estate can be offset against any other income that you earn.

http://www.propertyinvesting.com/strategie...ivegearing.html From what I remember if you had a good accountant and set up a family trust with rental properties in it you could really go to town fiddling things and deducting car expenses even

Rental demand seems still very strong in Sydney, recall article few months ago at 30 people or so turning up wanting to rent a place so not much chance of BTL'ers bailing out there I suspect

People think Australia has loads of land but

Sydney has a lack of new land available as it's pinned in by the Blue Mountains and lots of areas are too minging to live in and hot, no point living in Sydney if takes you ages in traffic to get to the beach. Hence desirable areas are very pricey especially eastern suburbs and the good beaches.

Hence why the lucky people are born in Manly.

I am a negative gearing landlord in Australia, and the fact that I can negative gear my rental income against tax makes no difference. My property has dropped in value by about 70k in around 3 years. Can you tell me how negative gearing my rental income, (this only gives me a tax benefit, which I currently don't receive as I am not earning in Oz), protects me from negative equity? It does not.

I made Manly my home when I went to Australia. Lovely spot, nights down at the Steyne, sipping a VB etc.

Ah yes, the 'Stain' as my family calls it.

[Time to raise the rents.]

Listen WAL, I would really like to buy my dream home in Sydney. Upper North Shore, 2000sqm, 5 bedrooms, pool, tennis court & triple garage.

Although I've noted a few tough to sell houses on the market, I've been watching closely since 2002 & can't report much movement on prices apart from them being a little higher.

Can you help me?

Edited May 9, 2006 by Time to raise the rents.

[Guest Winners and Losers]

Can you help me?

How long have you got?

My dream home in Oz is not on the 'Upper North Shore' (you snob!). Does that help? I would suggest that the upper north shore is a slightly different market. However, my family and friends have reported drops in the lower north shore (I guess that's because its 'lower', closer to the beach though - jeez, it will take you an hour from the upper north shore ). What are we talking? St Ives, Turramurra? Why not Double BPay?

C'mon TTRTR you know I wouldn't p*ss on you if you were on fire.

[Time to raise the rents.]

How long have you got?

My dream home in Oz is not on the 'Upper North Shore' (you snob!). Does that help? I would suggest that the upper north shore is a slightly different market. However, my family and friends have reported drops in the lower north shore (I guess that's because its 'lower', closer to the beach though - jeez, it will take you an hour from the upper north shore ). What are we talking? St Ives, Turramurra? Why not Double BPay?

C'mon TTRTR you know I wouldn't p*ss on you if you were on fire.

Being a girl, you can't aim so well if you p*ss anyway - so if I'm on fire, I won't be asking for your help.

I don't see why you have a problem with my dream either.

[Guest Winners and Losers]

Being a girl, you can't aim so well if you p*ss anyway - so if I'm on fire, I won't be asking for your help.

I don't see why you have a problem with my dream either.

What problem do I have with your dream? I think you should BUY NOW. Get it before you miss the boat. Prices in the upper north shore only ever go up and just think of all that lovely negative gearing. You'll be in it for the long term of course. Who needs the beach when you've got a saltwater pool (like me).

Just think, we could invite each other round for posh bbq's.

Edited May 9, 2006 by Winners and Losers

[Time to raise the rents.]

What problem do I have with your dream? I think you should BUY NOW. Get it before you miss the boat. Prices in the upper north shore only ever go up and just think of all that lovely negative gearing. You'll be in it for the long term of course. Who needs the beach when you've got a saltwater pool (like me).

Just think, we could invite each other round for posh bbq's.

Negative gearing might work for you, but it ain't my kettle of fish.

[aussieboy]

What is the difference then? I am seriously interested to know what makes the UK so different from the rest of the world and, apparently, not over priced and immune to property price falls? Are the fundamentals of affordability, lack of FTB's, poor rental yields etc. etc. not the same? Even if London were to fall 50% it would still be overpriced.

If London dropped 50% I would gear the crap out of myself and buy every 3 bed flat I could afford. My yields are still 6% gross, ungeared. 12% would be fantastic. This is, of course, why prices haven't crashed in London.

The boom prices are in the North, IMO. Particularly Newcastle. What's that all about?

[Guest Winners and Losers]

Negative gearing might work for you, but it ain't my kettle of fish.

What-ever.

But what about the barbie?

[CrashIsUnderWay]

If London dropped 50% I would gear the crap out of myself and buy every 3 bed flat I could afford. My yields are still 6% gross, ungeared. 12% would be fantastic. This is, of course, why prices haven't crashed in London.

The boom prices are in the North, IMO. Particularly Newcastle. What's that all about?

so speaks someone who has only ever experience the boomdays.

London 1998, you could easily get 12% yields.

I remember. I used to live in one.

[ʎqɐqɹǝʞɐɥs]

Well if the crash hasnt happened here within 3 years I will be off the buy a cheap one in Oz.