markets dropped 15 pct

Hi Aussie,

It’s an interesting point you make.

I notice that the last round of REIA stats had the Melbourne median house market falling by around 15%.

However, I regularly look through the local paper and see houses in Ringwood etc. sill priced at $350k+.

Sure, I think we are off the highs, and asking price is not necessarily the price you’ll get, but value shaven’t fallen by as much as I would normally expect to bring them back into the realms of affordability for the first-time buyer.

What do other people think?

Cheers,

Steve McKnight

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Remember that success comes from doing things differently.
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Funny you should mention this aussierogue, we get all the Leader suburban newspapers at work and I always pinch the property guide to get an idea of what’s going on.

I was leafing through the latest batch last night and thought exactly the same thing, that houses right now seem a heck of a lot cheaper now than they were 18 months ago, even around the Fitzroy, Collingwood, Preston, Coburg areas which are all within 10km of the CBD.

Cheers
r

<<<surfing the net – you can get a brand new 3 bedroom 2 bathroom house at point cook for 340k>>>

I dont know about you guys, but for first home buyers thats still a bloody lot of money.

I remember when I started out back in 1995, a $85k 2 bed unit on beach rd in Parkdale was alot of money for a newly married couple. Houses in Aspendale were $130k. Now they are $350k.

And my income has not really gone up all that much in that time. In fact its the same, as my wife now does not work to look after the kids.

I would hate to be a first home buyer now having to come up with a large deposit or a huge home loan.

So I still reckon we have a bit more to go before house prices are equitable with incomes. When interest rates rise again, you will see further falls in property prices.

Thats my 2 cents.

I’m with u Yack … but what about Sydney, a friend of mine (valuer) has had 30 morgagee vals in the last 2 weeks, his prediction is its going to get a lot worse (from a valuer???)

With rates as low as they have been in 35+ years why r people getting into soooo much debt, something has to give !!!

Around Carnegie most people’s limit for houses is approx $500k. Yet 12 mths ago renovated Edwardian weatherboards went for $570-580k.

A just built 3br semi-detached on half a block (but very little backyard) attracted no bidders at opening of $470k, with only vendor bids up to $500k before being passed in.

Surely if you’re going to pay $500k, you’d want a whole house, and the market agrees.

The main success has been a tackily renovated but extremely tiny 1br flat sell for $180k. Prices for these have been around the $150-180k range for about the last 12-18 mths.

Auction attendances seem to have picked up in the last month or two but often no one bids and the property is passed in.

Peter

That sounds pretty much on the money aussie, you have observed correctly!!! Although some suburbs within this radius have fallen further than 15% and by as much as 20-25% so how knows, you may get your desired 30% drop after all. Time will tell. [blink]

Cheers,

Jo

Wilandel,

Smart investors would not be buying for immediate capital gains in this current market, they would be buying because the percentage drop allows them to pick up deals “at bargain basement” prices, and with methodically researched strategy, should be able to secure a well reduced property price with future CG potential.

It’s all part of the correction; nothing to be too alarmed about. It’s happened before, and I daresay will do so again in future years to come….think of it as the “calm before the storm”.

BTW increased popularity for properties further than 20km to CBD is attributed to several factors, one of which of course is affordability, however, it also has to do with a recalculation of things like “average travelling time (to work)” which years ago was approx. 30 mins, whereas today it has extended to approx. 60-75 mins.

It’s all a part of change, which is always needed, but rarely welcomed by most. [blush2]

Cheers,

Jo

I am no economist – but think i know enough to be dangerous.

I believe in markets and how they do over time find their natural level.

We are at historical low interest rates. Incomes have not gone up much. So to get back into a natural balance where incomes can support property prices in relation to the interest rate – property prices must fall.

On the northern Beaches of Sydney, house prices have definately dropped.Some mates of mine who are selling, can’t attract people even to inspect their houses.Buyers are just not interested.
When one did receive an offer, the offer was ridiculously low. Claims he would rather burn the bloody thing to the ground before selling at that offered price.
I’m sill waiting for the market to bottom out. I believe it still has a way to go.

bruham. [withstupid]

<<<<<It amazes me how people who bought a home for $40K 20 years ago talk about making a loss if they sell the home for $500K rather than their asking price of $540K! How does that work!>>>>

Its probably got something to do with compounding and the time value of money.

And $40k is a years salary for many people.