We have recently upgraded our property market forecasts from potential crash to rather bullish. I think the market has corrected itself and is gradually climbing back. You will not see the unusually high growth of the recent past, however the asset class will still deliver very sound returns over the next cycle. Anyone agree? How are you guys seeing the market (primary research made easy….)
interesting yorker – on what grounds do you make your estimates?? i for what think rental levels are still way too low…so either rents have to increase dramatically or prices still have to drop..
the returns just dont make sense
Potential crash to bullish? That’s like almost opposite ends of the spectrum. I wouldn’t see the market (depends on which market, but I’ll refer to sydney) as “bullish”… that suggests to me that it is still speculative with great CG. I would say the market is now “stable” (as in, there’s still FH buyers out looking, incentives are there for buyers, there is still interest in the market, and it is not “flat” like pre-boom days. Given that we have had the biggest boom ever, and many people have come into the market, I doubt interest will reduce to pre-boom days.
Again, there’s many markets, and micro-markets within the sydney market. The OTP market is “flatter”… and Triguboff has slowed in his selling of apartments, but even then, you have rising building costs, so newer apartments are likely to be more expensive (with reduced demand) and other apartments may *hold* value (but probably not increase in value over hte next few years).
Inflation is manageable- 2.5%- and I think the sydney market will probably be aligned with inflation.
But bullish? hmmm- perhaps for the private treaty market, but auctions are probably dead for a while (except for the traditional unique top-end properties), and I think if one wanted to exit in sydney, the best time would have been around July 2003 for better CG. Now I think it’s buy and hold.
The exit duty did make (some) people panic a bit, and the effects of it will either be that people don’t sell for a while now. I think the bargains were to be found just before the exit duty came into effect.
kay henry
Hi Yorker
I guess thats the million doller Question.
My own experience in Tas is that the volumes dropped dramatically during the winter but prices held, no sign of panic selling, and the median price rose slightly. With Spring nearly here volumes of sales are increasing slightly. I think that with a median price of $180,000 there is not a lot of downside here.
regards
garrytas[cigar][email protected] Always have cashflow positive Tasmanian commercial properties
availableHi Yoker
where were you guys wrong then if your have changed your mind ?[biggrin]
I’m still seeing more buyer s than sellers in the markets that i still own in Australia. These are regional towns and cities in Vicitoria. Agents tell me they have seen a quieter market but prices haven’t dropped.
regards westan
I live in New Zealand and for a fee find cash positive deals there, email me at [email protected] to join our database
But for the media, what is “Your” perception? The economy is not suffering, unemployment is comparatively low, interest rates are comparatively low. I think the Sydney market especially is driven to far greater extent by the media. Most of these dimwitted journos aren’t even in the market. It really annoys me to be honest.
“We have recently upgraded our property market forecasts from potential crash to rather bullish.”
– The potential for a “crash” has not existed in the most recent downturn/market adjustment.
The best time to invest in any market [within reason] is when capital is limited, i.e. too risky for the mass/less sophisticated investors.
The key to wealth is to acquire property during a correction, not when the market becomes “bullish”. Sydney is a prime example.
“I think the Sydney market especially is driven to far greater extent by the media.”
– Every market is driven to some extent by the media. But this is not always a negative. Less sophisticated investors start a selling trend which results in opportunities for the more sophisticated investor.
— Michael
Originally posted by Yorker:Most of these dimwitted journos aren’t even in the market. It really annoys me to be honest.
But Yorker, their job is to report ON the market- they don’t have to be investors. A surgeon doesn’t have to have cancer to be able to operate on a cancer patient.
I’ve noticed there are fewer articles on RE in the news (I’m a news-junkie and check google news every day for RE articles. The lack of media is obviously indicative of the slower market.
I doubt the media led the boom… but it did report and comment on it- that’s a good thing, I think. I enjoy reading analysis and articles. I find it keeps me up to date. You can find out many things about planned infrastructure etc if you read all the newspapers online- and they’re free.
bring on more articles, I say. But I doubt the market will be talked up much in upcoming articles- because it doesn’t reflect what’s happening. If I want to see the market being talked up, I’ll check out the REIA sites.
kay henry
I think we may see some changes if an interest rate increase comes..people tend to worry..it all makes for interesting reading/conversing though!
Never say never!
While prices might not drop, I think it will still be a very long time until property has another run like it did 02-04.
So prices to stay steady (or perhaps a slight decline) but little Capital Growth. So basically a flat market. In the short term the boom and bust scenario will stop any massive growth, and higher interest rates (medium term 06/07) will reduce demand (this will put a dampner on speculation I think).
Of course there always be some market that is going gang busters (it seems to be commercial office space, which apparently has high demand at the moment).
Of course we all could be completely wrong, but that’s the beauty of prediction!
Rgds.
Lucifer_au
You must be logged in to reply to this topic. If you don't have an account, you can register here.
