Hi all,
I have done some analysis on property price trend and I would like to share with you all. I hope that this could trigger some discussion and I welcome your comments.Suburb: NSW/about 35km west of Sydney
Data source: From internet. I am not sure if I can name the web site here. Anyway, according to this web site, it claims that the data is gathered from NSW Department of Lands Database.
trx Date range: sales dated from Nov, 2006 to Aug, 2008
Volume: 484 deals
Data items: Data items include addresses, sales price, sales date, land size, and property type (they can be residence, vacant land or blank)
trx type: Over 85% of the property types are classified as residential or vacant land. The remaining is blanked. However, according to the address, I can assume that they are residence type and non-commercial deals.
Scope:
I discarded deals of vacant land (15 deals).
I also discarded deals with land size over 1500m (7 deals). I believed that they are larger scale development projects or in more remote area. I assume that they belong to another market and I am not interested in it. If I have time, I will add another section on it.Assumption:
1. There are quite a number of the deal has no land size specified. According to the address (format is like 2/119), I assume that there are villa or townhouse.Numerical analysis:
table 1 : House sales (Sorry cannot put a grid table due to formatting.)Comment:
1. no. of deals and volume in $ dropped since mid 2007 but remain steady for whole last year.
2. There is a seasonal factor in Dec. (it is around 80% of the quarter followed)
3. Avg land size per deal has been dropping significantly last year
4. Most surprisingly, the avg $ per deal do not drop. As a result, land price is moving upwards!Table 2 Villa and Townhouse sales (Sorry cannot put a grid table due to formatting.)
Comment:
1. No. of deals and volume in $ remain quite steady for the last 2 years.
2. There is a seasonal factor in Dec (it is around 85% of the follow quarter)
3. The avg $ per deal is also shown steady.Conclusion:
1. In this suburb, the property market remains steady on no. of transactions and money put in.
2. Land is a scare resource and its price is gonna going up ever. This might affect your investment strategy.
3. Something happened in mid 2007 and the volume of house sales dropped significantly but it has no impact to villa or townhouse. Who can remind me what’d happened?Interest rates, pause before an election etc.
Let me post table 1 and 2 which contain some hard figures
table 1 house sales
period
Deal count
land area
$m
area per deal
$per deal
$/sqm
Jun08 to Aug08*****36**********18273.00***11.57*****507.58********321370.39***633.1382
Mar08 to May08*****39**********21449.00***11.89*****549.97********304921.79***554.4291
Dec07 to Feb08*****32*********20892.00***9.62******652.88*********300656.25****460.5112
Spe07 to Nov07****38**********21153.00***11.59*****566.66*********304947.37****547.8183
Jun07 to Aug07*****38*********23420.00***12.43*****616.32*********327113.16****530.7558
Mar07 to May07*****59*********34220.00***18.36*****580.00*********311139.64****536.4477
Dec06 to Feb07*****43********25046.00****13.99*****582.47*********325383.72****558.6321
Nov06(1 mon)*******20*******12051.00*****6.57******602.55*********328500.00****545.183table 2 villa and townhouse sales
period
Deal count
land area
$m
area per deal
$per deal
Jun08 to Aug08*****25************************5.15**********************206118.00**
Mar08 to May08*****21************************4.15**********************197823.81***
Dec07 to Feb08*****18***********************3.85***********************213625.00****
Sep07 to Nov07****24************************5.72***********************238368.72****
Jun07 to Aug07*****19************************4.22***********************222052.63****
Mar07 to May07*****22************************4.62***********************210181.82****
Dec06 to Feb07*****19************************4.62**********************243315.79****
Nov06(1 mon)*******9************************1.97************************218388.89****If you disregard Jun 08 – AUg 08 in table 1, prices are effectively stagnant on a slightly diminishing land area (this can reflect several factors – blocks are getting smaller, they are being sold with newer houses, they may be better located to facilities etc) – likewise Dec/Feb 07 has similar negative bias.
Whereas villa sales may be more directly related to the improvements being sold, completion of projects (new stock) or other factors.
There is no conclusive evidence indicating price movements (are you comparing only 3 bedroom houses/town houses, excluding new or resales etc)? Both Dec 06/Feb 07 houses and townhouse stats had the highest or second highest deals.
You will need to do more legwork to see what has sold and how it compares to the numbers generated.
Quality housing options, mega townships and SEZ projects, resurgent demand and a strong GDSP growth will be the highlights this year. There is no looking back as the housing stock continues to grow to replenish the thriving demand of the middle-income-group (MIG) and higher-income-group (HIG) demographics segment. The year that will shape up as the most challenging year for investors as only wise-minded will step into realty pie. Stubborn decision making seems to be the motto for this year as panic has no room. Outlook for 2007 looks promising in the housing sector. However, the commercial sector seems to be in for some tough times ahead. Drivers that will directly impact the shaping of the realty market this year.
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I have heard that the government plans to cut 20000 positions. Looks like a rumor but it also makes sense as the government is running out of surplus. And it is certain that the tax income is going to drop tremendously too.
The hesitation of banks to cut mortgage rate prove that the banks have not been doing good. The steep cut in interest rate from reserve bank has a positive impact to the markets, however, why we need a steep cut? I don't think the government is trying to make the property price goes up, if it is, the government is overdoing it.
People said that we are lack of land and houses. Yes, but imagine in Sydney region (the most crowded region), 6 or less people living in a 200m house with 3 bedrooms and 300m of yard. Such properties can always accommodate more people. A lot of older people even living alone in a big house. Of course, more crowded means lower quality of living. however, mind set gonna change. We have a lot of buffer! (A friend of mine is living in 70/F of an apartment with only 50m area but costs 1 million AUD in Hong Kong. Yes, 70/F, not a typo) While we cannot compare with the extremes, it is very true that we have buffer.
People scatters and thus public transport don't earn much money.
I still believe that the land price will go up. All regions should become more crowded. Houses pull down replaced by a few storeys apartment. If you see the figures, people don't make much money on such project. What if the land price doubled or triple? Building companies need to build a larger scale project (say, a 7 storeys building) in order to make money.
Lower mortgage rates and stability in property prices are likely to bring in liquidity into the market, thereby properties may be more affordable.. This is what experts predict. What do you all have to say???
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Property To LetI think all these are just mind games. Property price will go up when people are not panic any more.
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