Forums / Property Investing / General Property / Property Cycle at the moment

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  • Profile photo of Tony FlemingTony Fleming
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    @the-dark-knight
    Join Date: 2008
    Post Count: 396

    I was talking to a broker a few weeks back who was saying the low interest rates are causing a storm with new and unexperienced investors. They'd had over 20 properties come through in the last month and the valuations were way of what people had paid for them. In one case the valuation came back $80,000 over the valuation. If this is true when the interest rates go back up won't we be in for a large drop in prices? I've noticed a lot of properties in Metro/Outer Sydney that seem way overpriced it seems to be definetly a sellers market at the moment.   

    Tony Fleming | Triumphant Property Group
    http://www.triumphantpropertygroup.com.au
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    NSW Buyer's Agent specialising in Western Sydney-Blue Mountains-Orange-Albury

    Profile photo of Jamie MooreJamie Moore
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    @jamie-m
    Join Date: 2010
    Post Count: 5,069

    Sydney is hot at the moment – especially out west.

    Personally, I've only seen a few valuations come back low this month – two were refinances where the owner thought their properties were worth more than they were valued at, the other was an OTP property.

    I haven't had any valuations come in lower than purchase price for normal established dwellings in the last three months or so – it's quite rare.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
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    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of FreckleFreckle
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    @freckle
    Join Date: 2012
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    Jamie M wrote:
    Sydney is hot at the moment – especially out west.

    West Sydney like many fringe areas tends to run hot and cold. A few years back they couldn't give them away after the initial FHB grants sucked many a newbie west only to find the living/commute costs where worse than living closer in and paying higher rents or mortgages.

    I would expect to see the outer Sydney become attractive again as economic conditions tighten. 

    The following link gives some interesting property and rental data for Sydney and regional NSW

    Economic Indicators NSW

    (January 2013)

    Profile photo of Tony FlemingTony Fleming
    Participant
    @the-dark-knight
    Join Date: 2008
    Post Count: 396

    Thanks for the information Freckle and yes the broker and I are situated in Western Sydney.

    Tony Fleming | Triumphant Property Group
    http://www.triumphantpropertygroup.com.au
    Email Me | Phone Me

    NSW Buyer's Agent specialising in Western Sydney-Blue Mountains-Orange-Albury

    Profile photo of FreckleFreckle
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    @freckle
    Join Date: 2012
    Post Count: 1,681

    There is a counter to populations moving to the fringes in search of cheaper accommodation and that's the cost of transport. Sydney's a bitch of a place to commute around at the best of times let alone rush hour. One of the reasons I left in 06. 

    This report on Australia's energy profile might interest a few. It's easy to see from the table below that AU's reliance on imported oil has only increased. Energy costs are rising fast and set to go much higher over the next decade. That's going to affect the population dynamic when its likely the economic situation is only set to deteriorate over the next decade and beyond. Understanding the financial pressures on the population should help the canny investor make the most of it.

    Full report

    Profile photo of JhaiMitchellJhaiMitchell
    Member
    @jhaimitchell
    Join Date: 2012
    Post Count: 30

    I see many people com­ment­ing on for­ums say­ing “Sydney as a whole is way over­priced for what is selling” and "Sydney house prices are depressing…"

    Where we all want to live, well most of us!

    I can sym­path­ise that most people simply want the com­mute between work and home to be shorter, but these days we also want a great school for our kids and to be close to our family/friends. Our men­tal­ity has changed because we also expect to step out of our door and walk to bars, res­taur­ants and the train station.

    This is a life­style factor and some of us have accep­ted to live in a shoe box or pay big bucks for some breath­ing space. This life­style factor has become such an ingrained way of think­ing. People are even start­ing to think noth­ing exists past Par­ra­matta, such as mobile phone cov­er­age inter­net and connections.

    A good example of this is a com­ment in reply to city people com­plain­ing about Sydney house prices “It almost sounds like they have not moved from the city for dec­ades and still think that the city is the centre of the uni­verse and that noth­ing else exists.” He also added “Or is it that it is still the centre of the uni­verse for many people?”.

    Profile photo of CatalystCatalyst
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    @catalyst
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    Sydney is definitely hot at the moment.

    People ARE paying more than valuations. But having said that it does take a while for valuation companies to come up to speed. On a whole though I wouldn't say Sydney is overpriced. We have been due for some decent growth.

    I believe interest rates will be low for a while but they can't stay low. THIS is when it gets interesting. If it's true that new time investors are buying we may see some correction when some can no longer hold onto properties. When interest rates go from 5% to 8% in a short time it will hurt the unprepared. On a $300,000 property interest will go from $15,000 to $24,000pa. Not many people budget for having $173 less per week.

    Profile photo of Tony FlemingTony Fleming
    Participant
    @the-dark-knight
    Join Date: 2008
    Post Count: 396
    Catalyst wrote:
    Sydney is definitely hot at the moment.

    People ARE paying more than valuations. But having said that it does take a while for valuation companies to come up to speed. On a whole though I wouldn't say Sydney is overpriced. We have been due for some decent growth.

    I believe interest rates will be low for a while but they can't stay low. THIS is when it gets interesting. If it's true that new time investors are buying we may see some correction when some can no longer hold onto properties. When interest rates go from 5% to 8% in a short time it will hurt the unprepared. On a $300,000 property interest will go from $15,000 to $24,000pa. Not many people budget for having $173 less per week.

       I Agree, we could have a major problem with prices when the interest rates shoot back up eventually. The majority of my portfolio are all western Sydney so I'm laughing at the moment but I've been to open homes today looking to expand in western Sydney. Two people had already placed offers on a two bedroom unit during the inspection. The asking price was already way overpriced (In my opinion). It's going to be interesting to see what happens over the next few years.

    Tony Fleming | Triumphant Property Group
    http://www.triumphantpropertygroup.com.au
    Email Me | Phone Me

    NSW Buyer's Agent specialising in Western Sydney-Blue Mountains-Orange-Albury

    Profile photo of alfrescodiningalfrescodining
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    @alfrescodining
    Join Date: 2012
    Post Count: 161
    Catalyst wrote:

    I believe interest rates will be low for a while but they can't stay low. THIS is when it gets interesting. If it's true that new time investors are buying we may see some correction when some can no longer hold onto properties. When interest rates go from 5% to 8% in a short time it will hurt the unprepared. On a $300,000 property interest will go from $15,000 to $24,000pa. Not many people budget for having $173 less per week.

          I agree. Alot of these people must be marginal. Where were they when the RBA rate was 5%? Prices in some Sydney suburbs haven't moved at all in years…. The properties have been there all this time and yet only now do they appear attractive to some investors because of low interest rates… 

    Profile photo of CatalystCatalyst
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    @catalyst
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    Yes, up to a year ago I was buying properties under market value in western Sydney that had been sitting there with no buyers.  Dark night. I haven't even bothered going as it's just crazy out there. Might go to an auction just out of interest. I'd be interested to see who is actually buying this stuff at those prices. No one I know that invests out there that's for sure.

    Now they have shot up in price smiley and everyone is buying surprise. It's a herd mentality. It's interesting to see the hoards of new posters on investment forums also with posts asking "how and where to buy". Problem is they think they need to hurry before prices rise and mistakes are made. And there are plenty of companies that will help them spend their money.

    The media says it's going up so everyone wants their piece of the action. Is it 2000 all over again? Might be time to offload a few so I can buy at the fire sales.enlightened

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