Sydney Property Bubble

(10-02-2014, 10:45 PM)Dividend Warrior Wrote: Oh no......

AIMS AMP and Suntec REIT have acquired properties in Australia recently!

Haha better reconsider those 2 REIT then.

Australia previously had interest rates hitting >10%, imagine what would happen to the bottomline for any debt related investments.

If an increase 120k in median house price in sydney in one year is not a bubble I dunno what is then.

I reckon the bubble is mainly in the resi sector, hv nt spread to comm sector.

(11-02-2014, 01:57 PM)BlueKelah Wrote:

(10-02-2014, 10:45 PM)Dividend Warrior Wrote: Oh no......

AIMS AMP and Suntec REIT have acquired properties in Australia recently!

Haha better reconsider those 2 REIT then.

Australia previously had interest rates hitting >10%, imagine what would happen to the bottomline for any debt related investments.

If an increase 120k in median house price in sydney in one year is not a bubble I dunno what is then.

Singapore housing loan interest was 12% in early 80. But we have yet to see this repetition.
Property, especially apartment prices was on uptrend since 18 months ago , already a bubble or just the beginning is anybody's guess.

(11-02-2014, 03:37 PM)Stocker Wrote:

(11-02-2014, 01:57 PM)BlueKelah Wrote:

(10-02-2014, 10:45 PM)Dividend Warrior Wrote: Oh no......

AIMS AMP and Suntec REIT have acquired properties in Australia recently!

Haha better reconsider those 2 REIT then.

Australia previously had interest rates hitting >10%, imagine what would happen to the bottomline for any debt related investments.

If an increase 120k in median house price in sydney in one year is not a bubble I dunno what is then.

Singapore housing loan interest was 12% in early 80. But we have yet to see this repetition.
Property, especially apartment prices was on uptrend since 18 months ago , already a bubble or just the beginning is anybody's guess.

With interest rates at 50 years low down under and likely to stay flat owing to mixed economic outlook, the search for yield will continue. while we are unlikely to see similar rise in asset prices like they did in 2013, I do not share the pessimism of doom sayers out there. My theory always hold - 7 years of tough bull and 3 years of sharp bears. The time for bears ha yet to arrive.

This is the latest property overview by heads of property bigwig Down Under - appears to me that Chinese fund flow is quite similar to that of Japanese during the late 90s but on a much bigger scale that includes residential on top of merely commercial and resorts. With Chinese population being one of the largest in the world, the optimism is not simply plucked from nowhere.

China wave to keep flowing
GREG BROWN THE AUSTRALIAN FEBRUARY 15, 2014 12:00AM

Stockland chief Mark Steinert. Source: News Limited
THE wave of Chinese money flowing into Australia’s housing market will continue unabated, according to Mark Steinert, managing director of Australia’s biggest residential developer Stockland, who said Australia’s homes were cheap compared with most cities around the world.

With an upmarket six-storey townhouse on 250sq m of land up to 60km from the centre of Shanghai costing between $US5 million ($5.5m) and $US6m, Chinese buyers would continue to look at Australia, Mr Steinert told a Property Council of Australia lunch in Sydney yesterday.

Jones Lang LaSalle global chief executive Colin Dyer said the rising Chinese middle class and Chinese companies would increase their investment in Australian real estate, with the Chinese government encouraging companies to move offshore.

Mr Steinert and Mr Dyer were joined by Charter Hall joint managing director David Southon on a panel discussion on the national property market.

“So this money that we’re seeing coming is going to keep coming because (of the) the quality of life, the quality of education, the quality of housing (in Australia). (These) things are highly desirable attributes in the context of Asia and the rest of the world.”

On the office markets, Mr Southon said landlords would have to deal with high incentives of up to 30 per cent until at least 2016 when economic growth reached trend levels and supply was soaked up.

“We need to see positive net absorption. It’s all related to economic growth and we need to see that flowing through in to the labour markets and ... to white collar growth.”

“Beyond 2016, when we start to see the 3 per cent (economic) growth coming through and the impact of that, then I think that we’ll start to see those incentives (pull) back once the supply is taken up,” Mr Southon said.

Prices are going up but vacancy rate remain low ! No worries, she'll be right, mate !
_________________________________________________________________________________________________________________________________________
Sydney rental accommodation eases in January14 February 2014

Sydney residential vacancy rates continue to be tight despite a slight rise in availability, according to data released by the Real Estate Institute of New South Wales.

The January 2014 REINSW Vacancy Rate Survey saw the number of properties for rent rise 0.1 per cent to 1.9 per cent.

“The middle* suburbs led the rise with an increase of 0.4 per cent in availability to 2.3 per cent,”
REINSW Deputy President John Cunningham said.

“This rate was last seen just over 12 months ago in December 2012.”

Availability in the inner* suburbs remained steady at 1.8 per cent, while the outer* suburbs rose 0.1 per cent to 1.7 per cent.

“Sydney has not seen significant rises in recent months and there is a great deal of pressure on the residential property market. We must make property more attractive to investors with the appropriate incentives, especially during a time of low interest rates and a volatile share market,” Mr Cunningham said........................................

http://www.reinsw.com.au/Sydney-rental-a...fault.aspx

Residential Property Prices in Sydney: Some Observations
October 2013

http://economics.hia.com.au/media/Reside...202013.pdf

So hot money is welcomed down under then... no worries mate until of course when the tide goes out

Sydney homes on track for 20 per cent growth in 2014
Nick Lenaghan
537 words
17 Feb 2014
The Australian Financial Review
AFNR
English
Copyright 2014. Fairfax Media Management Pty Limited.
Sydney's eager buyers are paying up to secure homes before they get to auction.

Contracts were signed on a four-bedroom Cammeray house on Sydney's North Shore on Friday night, a week before it was due to go the block.

Recently built on a 503 square metre block, with a pool at the rear, 5 Alan Street sold for $3.39 million.

It was snapped up after three weeks on the market, 90 inspections, eight contracts issued and four parties showed interest.

"These people didn't want to wait for auction. They had a time frame and they just wanted to move quickly and do the business," said Jane Garwood from Belle Property Neutral Bay.

"The market is very strong. Cammeray was bit of an unrecognised pocket and now it has become sought after. There's very big demand, especially from young families."

What's true in Cammeray is also true for Sydney. The clearance rate nudged past 80 per cent over the weekend across 596 auctions on RP Data figures. Melbourne was more subdued, with clearances near 71 per cent from 785 auctions.

Nationally, there were 1650 auctions in the capital city markets, with a preliminary rate at almost 72 per cent – the highest since October last year.

Sydney house prices have gained 14.2 per cent in the past year. Melbourne had added 11.0 per cent.

SQM Research managing director Louis Christopher said Sydney's ­market had clearly made a strong start for the year. Clearance rates at this time were usually in the high 60 per cent range.

Mr Christopher is now even more comfortable with his forecast of late last year for Sydney homes to win another 15 per cent to 20 per cent in capital growth this year.

"We're feeling very confident that forecast is going to come in," he said.

"For clearances to start straight off in the late 70 per cent to low 80 per cent range implies there has been no softening in market conditions since we finished off last year.

"There is strong confidence from buyers out there that the capital gains are likely to continue well into this year. There is a sense of 'we'd better buy now before we miss out'."

Low interest rates, strong demand and historically low listings are driving the pace in the Sydney market.

"There is very little stock out there and plenty of buyers," Mr Christopher said. "That spells one thing: higher prices."

In Melbourne, buyer advocate Mal James is preparing for better things to come. Mr James's team calculated a 73 per cent clearance among the 26 $1 million-plus auctions they covered.

"In footy parlance, this weekend is a bit like the pre-season competition," Mr James said. "But things are charging back into the big time next week, with February 22 and the following week, March 1, both looking like being Super Saturdays."

One of the most expensive Melbourne homes to change hands was 9 Asling Street in Brighton. Set on a 1300 sq m block, the five-bedroom Victorian sold for $2.966 million, by RT Edgar.

(17-02-2014, 12:30 PM)specuvestor Wrote: So hot money is welcomed down under then... no worries mate until of course when the tide goes out

Australia can always choose to open its gate for immigrants. They still have vast land undeveloped to cater for much higher population. Of course, the government has to make the right decision when the day comes.

If small Singapore can host millions of people, Australia can host 100 million without a problem. how many new apartments are required for it?