Sydney Property Bubble

[newbie11]

I will put my neck out and add that Sydney will be hot this year. And don't blame foreigners as they can only buy off the plan which does nothing to current equally red hot secondary market. Whatever high prices they paid do not affect valuation now.

[Boon]

Vacancy rate is only at 1.7%.......................
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Spotlight
Sydney Residential
January 2015
Savills
http://pdf.savills.asia/asia-pacific-res...4-2014.pdf

Highlights
- The overall vacancy rate for Metropolitan Sydney increased to 1.7%, up 0.1% compared to the previous year
- Total dwelling approvals for New South Wales has seen a sharp decline of 30.1% (seasonally adjusted) the last 12 months
- First home buyer activity in NSW has increased by 30.9% in the 12 months to September 2014; and decreased by 0.2% nationally
- Median prices for houses increased by 15.4%, whilst unit prices increased by 13.3% in the 12 months to June 2014
- Value of construction work done for ‘New Units’ has increased by 20.4% over the last 12 months, and is up 36.6% on the 10 year average
- Australian first time buyers will now take 4.1 years to save a 20% deposit for a house, up from 3.9 years in 2013

[Boon]

Bubble.......no bubble.......too early for bubble........the debate continues.....................
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Housing boom tipped to 'get bubbly' as mortgage rates fall

February 10, 2015
Stephen Cauchi

http://www.smh.com.au/business/property/...3aftd.html

[greengiraffe]

Sydney’s 12pc surge sets pace on house prices
THE AUSTRALIAN FEBRUARY 11, 2015 12:00AM

David Uren

Economics Editor
Canberra
Residential property prices.
Residential property prices. Source: TheAustralian
HOUSE prices are rising more than twice as fast in Sydney as anywhere else in the country and the Reserve Bank’s latest rate cut, bringing mortgage rates down to their lowest level in 50 years, is ­expected to keep the market booming.

Sydney prices have risen 12.2 per cent in the past year, ­according to the Australian ­Bureau of Statistics. Although this is down from the 16.2 per cent growth recorded in the year to March, it compares with an average price increase across the rest of the country of barely 4 per cent.

The housing market presents the Reserve Bank with a dilemma, as the January National Australia Bank business survey confirms the central bank’s view that economic growth is slowing and unemployment is likely to rise.

HSBC chief economist Paul Bloxham warned yesterday that Sydney house price growth was unsustainable and at risk of becoming a “bubble”.

The Reserve Bank has foreshadowed it will closely monitor the reaction of house prices to its rate cut and will work with the banking regulator, the Australian Prudential Regulation Authority, to control any risks. APRA issued new guidelines for mortgage lenders late last year, aimed at constraining lending to investors. However, Mr Bloxham noted that historically such efforts have been a lot less successful than the use of interest rates. His modelling shows that at current mortgage rates, house prices in Sydney will increase by between 9 and 10 per cent over the year ahead and between 7 and 8 per cent nationally.

The NAB business survey shows conditions are subdued in most industries. Idle capacity is at a record high in the manufacturing, mining, transport and utility sectors. The number of companies ­reporting trading conditions had improved in January was only 5 per cent higher than the number saying conditions were becoming more difficult, down from a 9 per cent majority in December.

NAB chief economist Alan Oster said the survey suggested unemployment would reach 6.6 per cent by the end of the year.

He forecast that the Reserve Bank would have to cut rates again by May in response to falling commodity prices, and he put a 30 per cent likelihood on one more rate cut after that.

Although housing prices remain hot in Sydney, they are cooling elsewhere. In Perth, the 12-month rate of house price growth has dropped from 8.3 per cent to just 1.2 per cent in the past year, while in Melbourne it is down from almost 10 per cent to 4.5 per cent. After Sydney, Brisbane had the fastest price growth this year, reaching 5.3 per cent, however prices there had been marking time since before the financial crisis and are only up by 7.1 per cent since late 2009. Sydney prices have soared 39 per cent since then, while Melbourne prices are up 16 per cent.

[Boon]

Ha-ha! Interesting remarks on supply-side constraints from the RBA........................
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RBA waves red flag over 'very concerning' Sydney property market

DateFebruary 13, 2015

A week after cutting interest rates to historic lows, Reserve Bank governor Glenn Stevens faced a House of Representatives committee on Friday and told them affordable housing has become a "major" social issue in Australia.

But he could not do much to bring house prices down, he said, because supply-side constraints had to be removed for that to happen and the Reserve Bank could not do much about them..........

http://www.smh.com.au/business/rba-waves...3eakh.html

[newbie11]

Bureaucrats language. . Supply side constraints had to be removed. Simpler said is increase supply la

[Boon]

The RBA’s Sydney real estate bind

PUBLISHED: 25 Feb 2015
http://www.afr.com/p/personal_finance/po...HnHDweI7QO

[specuvestor]

It's amazing how policy makers finally state the obvious after being asleep at the watch, with plenty of precedents to learn from as well... when ideology clash with reality:
-"Yes, foreign investment has been very, very good for Australia but it's got to be the right foreign investment... and it can't disadvantage Australian home buyers," he added.

0.5%-1% fee is not going to cut it, the herd instinct that is... which some still don't realise it is not rational. There will be more coming. It's not about being nationalistic ie protecting their citizens... it's about making sense

https://sg.news.yahoo.com/foreigners-pay...nance.html

... we've seen so many boom and busts in the REGION. Why would this time be different for Australia with rising unemployment, declining commodity prices and economy boosted by housing FDI which is unsustainable?

http://www.valuebuddies.com/thread-5501-...#pid107152

[BlueKelah]

Elections coming 28th march for nsw state which sydney is in. Just some last minute policy to show locals they care and hoping to get re elected.

Probably end of the line for them as sentiment change in qld and victorian states have shown

-- via Xperia Z1 with tapatalk

[greengiraffe]

House listings dry up in pricey Sydney
Larry Schlesinger
408 words
25 Feb 2015
The Australian Financial Review
AFNR
English
Copyright 2015. Fairfax Media Management Pty Limited.

A combination of record high auction clearance rate and jittery vendors is pushing down property listings, most notably in Sydney, creating the conditions for further surges in house prices.

Figures from CoreLogic RP Data show Sydney new listings are down 8 per cent on last year. Total listings are down almost 10 per cent to under 18,000 properties compared with a 4 per cent decline in the capital cities.

Biting into Sydney listings have been surging auction clearance rates that touched a record 88 per cent this past weekend and have been above 80 per cent over the past four weeks. The result: Sydney's larder of housing stock is looking bare.

"Markets like Sydney have been so strong for the past two-and-a-half years that they have exhausted the number of people selling compared with those looking to purchase," said CoreLogic RP Data senior analyst Cameron Kusher. "There's plenty of desire to purchase, but there's just not enough stock coming to market."

Sydney's most prominent estate agent, John McGrath, said listings on realestate.com.au were down 10 per cent on the same time last year and attributed this to vendor concerns about selling and then not being able to get back into the market "because it has been rising at a 45 degree trajectory".

"I think if there is a more modest growth pattern going forward that will entice more people back into the market, [but at the moment] everyone is worried about being caught without a home and that if the market goes up another 10 per cent it will cost them money," he said in an interview on Sky News.

Mr McGrath said the "biggest issue" on the horizon for the property market was the unemployment rate and whether it would continue to rise. "Even if you are employed, if you are worried about rising unemployment you may be deferring a decision to buy or sell."

Real Estate Institute of NSW president Malcolm Gunning agreed that many would-be sellers were sitting on their hands, concerned at the lack of choice in the market.

"Last year, many people chose to cash in and move up or down that property ladder. But this year stock is significantly down because upgraders or downsizers are concerned that if they sell first, there may not be able to find anything to buy."


Fairfax Media Management Pty Limited

Document AFNR000020150224eb2p0000o