Sydney Property Bubble

[greengiraffe]

• Nov 8 2015 at 12:40 PM 
   
  

Sydney auction clearance rate drops below 60pc

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NaN of
[img=620x0]http://www.afr.com/content/dam/images/g/k/t/a/9/v/image.related.afrArticleLead.620x350.gkthzj.png/1446969214607.jpg[/img]A home in Melbourne's Toorak sold for $1 million above the reserve. Supplied
[Image: 1426054187157.png]

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by Mercedes Ruehl
Sydney's falling auction market hit a three-year low at the weekend as buyers reacted to higher interest rates and record listing numbers.
The city's auction clearance rate dropped below 60 per cent for the first time. Domain Group's preliminary results put the clearance rate 59.2 per cent across 1011 auctions. Sydney could fall even further by Christmas, Domain Group senior economist Dr Andrew Wilson warned.
"It's not just that the market is tracking at its lowest levels in three years in Sydney but that we are also yet to find a floor," Dr Wilson said."This has been a very sharp decline, we are not seeing an orderly correction phase. But we still have around 6000 auctions to come in Sydney before the end of the year."
RATES RISE SPOOKS BUYERS
[img=620x0]http://www.afr.com/content/dam/images/g/k/p/r/g/g/image.imgtype.afrArticleInline.620x0.png/1446762964432.jpg[/img]An artist impression of the Ryvita site in Camberdown. Supplied
The big four banks have all lifted their mortgage rates, blaming market conditions and regulatory changes which require them to increase the amount of capital they hold against their home loan portfolios.
"Buyers are spooked by higher interest rates and this demonstrates how confidence can really impact a market," Dr Wilson said.
"This is despite a lot of the underlying factors for the housing market still very positive. NSW is still Australia's strongest economy and there will continue to be price growth in Sydney."
Ray White NSW chief auctioneer Scott Smith it was important to look at different regions. Mr Smith had four auctions scheduled in Sydney's northern beaches on Saturday, where clearance rates have still been above 70 per cent.


Mr Smith said of his four properties, two sold prior and the other two sold on the day. More than 50 people attended one his auctions for a three-bedroom waterfront apartment in Abbotsford. The unit at 51/12-16 Walton Crescent, which had sweeping 180 degree views of Abbotsford Bay, had four registered bidders and sold for $1.23 million, $30,000 over the reserve.
"There may be fewer bidders at auctions now but the results are not changing. Nothing I have taken to auction has not sold. Population growth is still high, there is limited supply and people need to remember the market is still good. The 90 per cent clearance rates we saw earlier in the year were not sustainable," Mr Smith said.
AFFLUENT SUBURBS EXPERIENCE SLOWDOWN
But even the affluent northern suburbs are still experiencing a slowdown, with a two-bedroom apartment in Kirribilli with views of the Opera House receiving no bids at the weekend. The 73/22 Waruda Street property was being offered through Laing + Simmons North Sydney.

Meanwhile in the outer suburbs in areas such as Epping and Baulkham Hills, where over the last couple years there have been huge price increases, clearance rates are now dropping into the 30 per cent range, which is pulling down Sydney's overall rate.
Off-the-plan sales are no longer selling out on the day either, though developers are still seeing strong interest. Ausin Group sold 80 of the 130 properties released to the market in Camperdown at the former Ryvita Biscuit Site on Barr Street Saturday. Sales for the final stage of the project, known as Urban, were valued at over $85 million with one- and two-bedroom apartments proving to be the most popular. Prices for apartments start at $659,000 for one bedroom; two bedrooms start at $1.138 million.
MELBOURNE BUYERS HOLD FIRE
Buyers were holding fire and sitting on their hands in Melbourne as well, although the city posted an auction clearance rate of 70 per cent, compared with 66 the week before. A two-bedroom property in Kingsville at 1 Dickson Street, taken to market via Compton Green, was passed at $825,000 after failing to meet the vendors' reserve price.

At the top end of town a five-bedroom home in Toorak sold for more than $1 million over reserve. The 10 Maple Grove Tree house sold for $8.35 million through RT Edgar.
David Morrell, who represented one of the unsuccessful bidders said the Maple Grove home was in a good position and was always going to go well.
"It was a very strong result but these sort of outcomes can cause angst because everyone else then thinks their property is worth $1 million more too. But buyers are becoming picky and a lot of vendors have not recalibrated their expectations off the back of that," Mr Morrell said.
For instance a townhouse, also located in Toorak at 2/13 Monomeath Avenue, was passed in on Saturday after one vendor bid of $1 million.

[BlueKelah]

its almost 2 years since I started this thread to warn about bubble in australian property markets.

Perth has busted.

Now Sydney and Melb turn coming. Perhaps FED rate increase will be the big nail in the coffin.

thanks gg for keeping us updated

[newbie11]

Let's see in 3 years time. Prediction is fun

Sent from my SM-N910G using Tapatalk

[greengiraffe]

I think everyone seems to be overwhelmed by Singapore's busted property bubble...

I personally think that a correction to a normalising trend is inevitable... always bear in mind that home ownership Down Under is so so different... its probably another day for many...

As for Perth... busted is an exaggeration...

Land values remains sky high as the size has been seriously shrunk in various areas which my mates are tracking for the similar pricing...

No worries just get on with life...

No Vested Interests
GG

[greengiraffe]

• Nov 8 2015 at 12:40 PM 
   
  

Sydney auction clearance rate drops below 60pc

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NaN of
[img=620x0]http://www.afr.com/content/dam/images/g/k/t/a/9/v/image.related.afrArticleLead.620x350.gkthzj.png/1446969214607.jpg[/img]A home in Melbourne's Toorak sold for $1 million above the reserve. Supplied
[Image: 1426054187157.png]

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by Mercedes Ruehl
Sydney's falling auction market hit a three-year low at the weekend as buyers reacted to higher interest rates and record listing numbers.
The city's auction clearance rate dropped below 60 per cent for the first time. Domain Group's preliminary results put the clearance rate 59.2 per cent across 1011 auctions. Sydney could fall even further by Christmas, Domain Group senior economist Dr Andrew Wilson warned.
"It's not just that the market is tracking at its lowest levels in three years in Sydney but that we are also yet to find a floor," Dr Wilson said."This has been a very sharp decline, we are not seeing an orderly correction phase. But we still have around 6000 auctions to come in Sydney before the end of the year."
RATES RISE SPOOKS BUYERS
[img=620x0]http://www.afr.com/content/dam/images/g/k/p/r/g/g/image.imgtype.afrArticleInline.620x0.png/1446762964432.jpg[/img]An artist impression of the Ryvita site in Camberdown. Supplied
The big four banks have all lifted their mortgage rates, blaming market conditions and regulatory changes which require them to increase the amount of capital they hold against their home loan portfolios.
"Buyers are spooked by higher interest rates and this demonstrates how confidence can really impact a market," Dr Wilson said.
"This is despite a lot of the underlying factors for the housing market still very positive. NSW is still Australia's strongest economy and there will continue to be price growth in Sydney."
Ray White NSW chief auctioneer Scott Smith it was important to look at different regions. Mr Smith had four auctions scheduled in Sydney's northern beaches on Saturday, where clearance rates have still been above 70 per cent.


Mr Smith said of his four properties, two sold prior and the other two sold on the day. More than 50 people attended one his auctions for a three-bedroom waterfront apartment in Abbotsford. The unit at 51/12-16 Walton Crescent, which had sweeping 180 degree views of Abbotsford Bay, had four registered bidders and sold for $1.23 million, $30,000 over the reserve.
"There may be fewer bidders at auctions now but the results are not changing. Nothing I have taken to auction has not sold. Population growth is still high, there is limited supply and people need to remember the market is still good. The 90 per cent clearance rates we saw earlier in the year were not sustainable," Mr Smith said.
AFFLUENT SUBURBS EXPERIENCE SLOWDOWN
But even the affluent northern suburbs are still experiencing a slowdown, with a two-bedroom apartment in Kirribilli with views of the Opera House receiving no bids at the weekend. The 73/22 Waruda Street property was being offered through Laing + Simmons North Sydney.

Meanwhile in the outer suburbs in areas such as Epping and Baulkham Hills, where over the last couple years there have been huge price increases, clearance rates are now dropping into the 30 per cent range, which is pulling down Sydney's overall rate.
Off-the-plan sales are no longer selling out on the day either, though developers are still seeing strong interest. Ausin Group sold 80 of the 130 properties released to the market in Camperdown at the former Ryvita Biscuit Site on Barr Street Saturday. Sales for the final stage of the project, known as Urban, were valued at over $85 million with one- and two-bedroom apartments proving to be the most popular. Prices for apartments start at $659,000 for one bedroom; two bedrooms start at $1.138 million.
MELBOURNE BUYERS HOLD FIRE
Buyers were holding fire and sitting on their hands in Melbourne as well, although the city posted an auction clearance rate of 70 per cent, compared with 66 the week before. A two-bedroom property in Kingsville at 1 Dickson Street, taken to market via Compton Green, was passed at $825,000 after failing to meet the vendors' reserve price.

At the top end of town a five-bedroom home in Toorak sold for more than $1 million over reserve. The 10 Maple Grove Tree house sold for $8.35 million through RT Edgar.
David Morrell, who represented one of the unsuccessful bidders said the Maple Grove home was in a good position and was always going to go well.
"It was a very strong result but these sort of outcomes can cause angst because everyone else then thinks their property is worth $1 million more too. But buyers are becoming picky and a lot of vendors have not recalibrated their expectations off the back of that," Mr Morrell said.
For instance a townhouse, also located in Toorak at 2/13 Monomeath Avenue, was passed in on Saturday after one vendor bid of $1 million.

Housing boom not over yet, says property industry survey

• AAP
  
• NOVEMBER 09, 2015 11:48AM
  

[Image: 531199-c9957bd6-867c-11e5-b028-b95d738fab63.jpg]
A recent auction in Sydney. Source: News Corp Australia
[b]The housing price booms in Sydney and Melbourne are not over yet — but probably will be within a year, according to a survey of property market professionals.[/b]
The survey by the NSW division of the Australian Property Institute in October asked a range of valuers, funds managers, property analysts and financiers how long the upward trend in prices in the two surging markets would last.
For Sydney, 44 per cent thought it would run another six months, while 33 per cent expected another year.
For Melbourne, respondents were a little less optimistic for the short term, with half expecting the rises to go for only another six months and a further third tipping them to run for a full year. But for both Sydney and Melbourne, only six per cent expected the boom to run for another two years and none predicted it to go beyond that.
The survey also canvassed opinions on whether the Sydney, Melbourne and Brisbane markets were “in a bubble”, leaving the respondents to decide for themselves how to define a bubble. For Brisbane, where the latest Corelogic RP Data home value index rose only 3.8 per cent in the past year, 70 per cent though the market was neither in, nor entering, a bubble.
For Melbourne, only 44 per cent thought the market was not in a bubble.
Prices in Melbourne rose an average of 12.8 per cent over the year to October, according to CoreLogic RP Data.
In a result that might surprise anyone watching the Sydney market, where prices rose 15.6 per cent over the past year, half of the respondents thought the market was not in a bubble.
The results follow a survey of the general public by CoreLogic RP Data and TEG Rewards last week, which showed a similar pattern of expected price rises despite a recognition of the risks ahead. That survey showed that while 68 per cent of people believe the national housing market is “vulnerable to a significant correction in values”, only 16 per cent expected prices to fall over the coming year, while 41 per cent expecting prices to rise.
AAP

[newbie11]

Media love tracking auction results. There's also private treaties sales.

Sent from my SM-N910G using Tapatalk

[BlueKelah]

I think everyone seems to be overwhelmed by Singapore's busted property bubble...

I personally think that a correction to a normalising trend is inevitable... always bear in mind that home ownership Down Under is so so different... its probably another day for many...

As for Perth... busted is an exaggeration...

Land values remains sky high as the size has been seriously shrunk in various areas which my mates are tracking for the similar pricing...

No worries just get on with life...

No Vested Interests
GG

[Deleted by Administrator: Let's focus on topic discussed, not on the person. Thanks.]

Newbie11, auction clearance in sydney and melbs are a guide for the how hot the market is. Unlike other city, auctions there are used to get the highest price for property when buyers are excited. So auction shows basically the buyer sentiment in those 2 big cities.
sent from my Galaxy Tab S

[greengiraffe]

I think everyone seems to be overwhelmed by Singapore's busted property bubble...

I personally think that a correction to a normalising trend is inevitable... always bear in mind that home ownership Down Under is so so different... its probably another day for many...

As for Perth... busted is an exaggeration...

Land values remains sky high as the size has been seriously shrunk in various areas which my mates are tracking for the similar pricing...

No worries just get on with life...

No Vested Interests
GG

No vested interest meh? u seem to post a lot of aussie update and news leh, almost everyday. also ur vested fcl and St****** are pretty much aussie related business.

But its understandable to want to hype stuff one is vested in on the forums.


Newbie11, auction clearance in sydney and melbs are a guide for the how hot the market is. Unlike other city, auctions there are used to get the highest price for property when buyers are excited. So auction shows basically the buyer sentiment in those 2 big cities.
sent from my Galaxy Tab S

Apart from my core positions, I don't have vested interests.

I read Australian papers on top of Singapore papers simply because Australia is a much bigger economy than Singapore and the journalism Down Under is much better than that of Singapore...

I don't hype. I have already crossed that treshold. $ is no longer than important to me as I merely view what I m passionate in as a game. Its a very simple game... just work hard and I always tell those who knows me... its not IF but WHEN.

I have been out of my broking game come close to 1 decade but I do have my following. My clients and those that are in close contact with me still appreciate me for who I am.

These days, I basically find out who the CON men are as there are seriously very few real businesses and businessmen. Once I narrow the focus, there is only these little that I can focus on.

FCL and St****** are the few businesses that fit my criteria.

Buddy, this investment game is seriously just a game. $ is important but what is more important is your ability to use $ not to hoard it.

To me, these forum is about WIN-WIN, not win-lose.

Over time, a real mileage horse will be discovered.

Still Not Vested
GG

[greengiraffe]

• Nov 10 2015 at 8:13 AM 
  

Six signs show Sydney's property has cooled

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NaN of
[img=620x0]http://www.afr.com/content/dam/images/g/j/k/o/u/w/image.related.afrArticleLead.620x350.gku4ic.png/1447104433771.jpg[/img]Domain's senior economist Dr Andrew Wilson offers a straight talking view on the auction clearance numbers: "It's the steepest fall in the shortest period of time that the Sydney market has ever experienced - I guess that says it all.". Dallas Kilponen
[Image: 1426114375736.png]

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by Matthew Cranston
In real estate timing is everything. So in July this year the Financial Review decided to select six signs that would help home buyers time their exit and entry in the heated Sydney housing market.
Since that time all six indicators show that Sydney's housing market which has shown the biggest capital growth of all the capital cities - has cooled significantly.
CLEARANCE RATE
One of the best indicators among the six is the clearance rate.

Since the Financial Review's story on the six signs in July clearance rates in Sydney have fallen to their lowest rate in three years at 59.2 per cent. 
When the market was red hot in May this year the Sydney clearance rate hit a peak of 89.2 per cent. 
Domain's senior economist Dr Andrew Wilson offers a straight talking view on those numbers.
"It's the steepest fall in the shortest period of time that the Sydney market has ever experienced - I guess that says it all."


In select areas of Sydney such as the Hills District, clearance rates have hit lows of just 27 per cent.
And just how far the clearance rate will go is another big question. 
"There was a more orderly environment in 2012 when clearance rates were around 59 per cent, but there is no floor here yet."
THE PRICE GAP

The next indicator is the gap between the price a house successfully sells for at auction and the reserve the vendor has on it.
This is a more subtle and harder piece of data to collect but as an example of where this is heading a small three bedroom home at 5 Boronia Rd, Bossley Park in Western Sydney sold on the weekend for $735,000. The reserve was $750,000.
Richardson & Wrench's Sam Tea, who sold the house, said this was actually a good outcome.
"The owner was realistic and understood the right price and so he was happy. Most other vendors would have gone for a reserve of $800,000. 

LISTINGS AND SPEED OF SALE
One of the key factors for vendors price expectations is supply or in other words the volume of listings.
The number of old and new listings in Sydney is up 3.8 per cent from this time last year, according to CoreLogic RP Data Property Market Indicator.
It's not quite fair to measure the number of listings compared to July because of seasonality; in winter people are less likely to be out buying property. However what might be worth assessing is the time taken to sell a property.
If you listed your home in July. it would have taken you 25 days to sell. If you listed your home on the weekend you can expect now that it won't sell for 28 days.
This shows further cooling in the market because spring is usually a time when there are more buyers and if anything the time taken to sell should have reduced.   
TYPE OF BUYER
When the Sydney housing market was hot, you know investors are making up a large proportion of the buyers. When they are exiting you know the market is cooling. 
Official housing lending figures have shown that investors have been the key borrowers for home purchases.
In July, investors accounted for 62 per cent of the NSW market, just shy of the peak of 62.5 in May and up from 57 per cent a year earlier.
However those figures have changed. 
In August investors made up 54.9 per cent of all NSW residential lending, excluding refinancing.
Furthermore, owner occupied housing loans with banks rose 1.9 per cent while investor housing loans fell 0.6 per cent. 
However some of this data can be unclear especially when the Australian Bureau of Statistics said "some banks have reclassified housing loans that originated as investment loans to owner occupied".
Australia's largest wholesale mortgage broker AFG has also noticed that new requirements for lenders set down by APRA has seen investment lending for the September quarter down from a 3 year average of 38 per cent of total loans processed, to 33 per cent.
INTEREST RATES 
Whilst regulations can have a big impact on the composition of buyers there is no greater influence than the cost of borrowing.
While the big banks have been increased their home loan rates for investors it is the moves of the Reserve Bank of Australia that are watched more closely for the cost of borrowing. 
Based on the ASX 30 Day Interbank Cash Rate Futures - a place where people bet on which way the RBA will move the cash rate - there is an 81 per cent expectation that there will be no rate cut at the next RBA Board meeting. In October there was only a 53 per cent expectation of there being no cut.
EMPLOYMENT 
The last indicator – and certainly not the least important – is employment. Jobs give people the ability to afford loans to buy homes.
There was no movement in either NSW or Australia's overall employment rate of 5.9 per cent and 6.2 per cent respectively in September. 
 

[greengiraffe]

http://www.valuebuddies.com/thread-5913-...#pid122104

In addition there is a smaller deal and less profile:

Shanghai's Dahua buys big from the NSW Government in Sydney's west

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NaN of
[img=620x0]http://www.afr.com/content/dam/images/g/j/8/6/i/x/image.related.afrArticleLead.620x350.gkuidu.png/1447055227265.jpg[/img]David Pitchford, the CEO of UrbanGrowth, says teh company has achieved a key milestone. Dominic Lorrimer
[Image: 1435810439847.png]

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by Robert Harley
The NSW Government, though its urban transformation arm UrbanGrowth NSW has sold two major land subdivisions in South West Sydney to the Shanghai-based Dahua Group.
Price has not been disclosed but the deal could be worth about $300 million.
The two sales could fast track development of about 3580 homes, and accelerate housing supply, in one of Sydney fastest growing corridors.
The chief executive of UrbanGrowth, David Pitchford, said the sale was also a "key milestone in UrbanGrowth NSW's transition out of residential land subdivision."

Urban Growth's mandate is now to focus on large-scale urban transformation projects, like The Bays in inner Sydney, where the group acts as an "industry enabler", rather than as competitor in the housing land market.
"Proceeds from the sale will be largely reinvested into new urban transformation projects, which will drive Sydney's global competitiveness," Mr Pitchford said.
Colliers International conducted the marketing campaign for UrbanGrowth NSW but declined to comment when contacted.
Dahua was founded in Shanghai in 1988 and has developed large master planned residential communities and mixed-use projects.


In Sydney, the group is developing the Sapphire apartment tower in Bondi Junction and the 2ha Sydney Water Central Workshops site, for a mixed use project, in the inner city suburb of Waterloo.
Dahua Australia General Manager, Eric Li, said his group was " very excited to have the opportunity to create new residential communities in this fast-growing part of Sydney".
Edmondson Park, which is about 40 kilometres south west of the Sydney CBD, could deliver 1280 homes for Dahua, is known as the gateway to the South West Growth Centre. Already the location boasts a new rail station and Frasers Property Australia recently paid about $100 million for the town centre site.
The Menangle Park subdivision, about 70 kms southwest of the CBD, could provide around 2,300 residential lots plus a neighbourhood centre as part of Greater Macarthur Land Release announced by the NSW Planning Minister Rob Stokes in September.

Along with Edmondson Park and Menangle Park, UrbanGrowth put two other sites up for sale, at Spring Farm and Mittagong. They are likely to be acquired by different buyers, also through Colliers International, and take the total realisation over $600 million.