Property prices set to fall until 2007?

Hi Michael,

In my view the CG’s at the northern beaches has been way too hot over the last few years. I put it down to the baby boomer phenomenon. Well off north shore people are selling up and buying units/ townhouses down there for cash mainly (with a little bit left over to “party” with). These people are less affected by interest rate movement so talk of interest rises are less of a concern to them ……….more demand.

If you owned a freestanding house there you were sitting on a goldmine, as the developers would offer you just about anything to secure it. The suburbs median sale price was severely distorted too as developers would pay double the street value to get stock to develop! If you were doing your usual DD this suburb would look incredibly good hence even more demand ensued. Unfortunately where there is huge demand the developers soon create an oversupply. This is what’s happening now. Nothing like oversupply to curtail and further CG’s.
Although, don’t get me wrong, I still believe in the Northern Beaches ……….long term.

Real case of my brother will show you the price volatility (and CG’s) of this suburb:

House purchased 1992 (fibro dump on 1000sq m) for $212k

Best developer offer late 2003 2.3 mil

Today approx $950k and probably take a lot of time to shift!

Stick to the EAST side of Pittwater Road and you’re laughing.