Australian Property Market

don't know much about it but here is a copy and paste for you:

There were some very strong Employment numbers out of Australia last night. Employment rose more than three times as expected for Nov (+36k vs. 10k). The jobless rate held at the thirty year low of 4.6%. These numbers will intensify the worker ‘shortage’ issue that they currently experience. This should increase wages and inflation short term. The AUD$ has appreciated (0.7525) as traders bet interest rates will be increased.
 
As the Australian economy is strongly influenced by resources/commodities things are currently going good. When I was there (4 years ago)house prices were rising steadily. Since then there was a short plateau and now a another rise. Location is very important when buying in Australia, Sydney is a very big city with some good areas and some not so desireable. I dont know if its changed since but in the past those without a visa or citizenship were required to get approval from the Foreign Investment Advisory(I think) Board. This meant buying at auction was difficult.
 

Hasn't been so good out there over the last couple of years. Prices have been dropping and I know a few people that bought at the height of the market who now find themselves trying to ride out negative equity in apartments that their not really that keen on. Read in an SMH article not so long ago that quite alot of people in Sydney invested in 2nd houses in the sprawl that is the West Sydney city suburbs only to take a massive hit on these properties in the last 12 months. Could this be Ireland in years to come!!!!
 


That is what I am hearing as well. Economy is doing well do so could be a good time to buy but as said above location is probably the key
 
Sunny said:
That is what I am hearing as well. Economy is doing well do so could be a good time to buy but as said above location is probably the key
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I am in sydney at present, the australian economy is very diverse;

Resource rich west coast and queensland are doing well(40% increase in property value last 12 months)

The economy in New South Wales where sydney is , is entering ressession territory. so property is pretty stuffed anywhere away from the beach.
Having left dublin a couple of years ago, its great to live somewhere where
1. Property rental is a better proposition than owning,
2. Property is not an Australian obsession
3. Poperty prices have stalled so its pretty much a buyers market

If you are thinking of investing please stay away and give us some peace
 
somerset said:
The economy in New South Wales where sydney is , is entering ressession territory. so property is pretty stuffed anywhere

If you are thinking of investing please stay away and give us some peace
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Lived there couple of years ago and probably heading back next year so not an overseas investor.

So is the sentiment in Sydney currently against buying property ?
 
phoenix_n said:
Lived there couple of years ago and probably heading back next year so not an overseas investor.

So is the sentiment in Sydney currently against buying property ?
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Anyone i know who is investing in property is buying or talking about Brisbane... they are all Irish incidently. At work, most people are indifferent.... anyone with property bought it a while ago (more than 2 years) in sydney.
I went to an auction about a month ago and more than half properties were passed in which is not unusual, with few bidders on properties that were bid on.

Talk of another interest rate rise early next year will further spook the market...

Sentiment here compared to Ireland is turned on its head. When there is no anticipated capital gain or quick buck, investment property really just looks like bricks and mortar ...and work... funnily enough.
Wonder if that will happen in Ireland?

So sentiment isnt against buying, its more wait and see... the off shoot of that is that rents are starting to climb...

Appears that yields will now increase on investment property to make it worthwhile before serious investors willget back in...

Perth incidently is the city that grew by 40% last year...

where are you going?
 
Sydney property?

Generally speaking, north shore is more prestigious, holds its value and will show some returns, west Sydney isn't and won't.
 
Iv lived in sydney here are my purchase
bought 1991 123,000 sold 1999 189,000
bought 1999 226,000 sold 2001 295,000
bought 2003 385,000 peaked 2004 440,000 now worth 350,000

it was one interest rate rise in 2004 that started the slide it was only 1/4% but it changed sediment from 2001 to 2003 propertie was all people talked about how much they made. now its all about will i have a job next week.and how expensive things are housing are still selling but people make silly offers like $50.000 below asking.different over here houses normal sell bellow or at asking very few dutch auctions
interest rates are 8.09%
 
somerset said:
where are you going?
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Probably Syndey again

Deirdra said:
Sydney property?

Generally speaking, north shore is more prestigious, holds its value and will show some returns, west Sydney isn't and won't.
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Location Location Location.....


Was about to buy myself in dec'03(eastern suburbs) but saw how inflated the prices were becoming and that the fuel that was feeding it was pure speculation.


Are you sure you are not talking about the Irish market ?
 
At the height of the aussie boom, i went to a free 'seminar' on how to be a property millionaire. Interestingly he started the seminar about being cautious. Mr Sales Man (Sydney res) gave the example of the first bit of property investment he dabbled in - 2 new build apts in Brisbane bought on whim on a viewing trip some time in the 90's. He kicked back and marvelled at the year on year increases of some 30% and decided to cash in. He went up to Brisbane to have his apts valued to cash in, and lo and behold they had dropped by 10% on purchase price, when he was expecting a >50% increase in 3 years. What happened? He paid the 'Sydney Sucker' price rather than the local price.

I've been home for 2.5 years since that seminar, and it changed my perception completely on all the 'property abroad' being flogged, and hence my complete apathy towards most widely advertised property abroad.

His seminar was flogging a course on investment fundamentals, and not to be sucked in by random figures, glossy brochures, brainwashing etc etc.

Oh the irony - 'Paddy' price anyone??
 
I'm based in Sydney and have just had an offer accepted for 2 bedroom penthouse 2km from city.

Vendor paid $625k in 2004 and our offer was $555k.

Apartment is 168 sq.meters including car space and views are spectecular.

There is a 3 bedroom penthouse for rental beside us asking $1500 pw although its' double the size of our penthouse.

Market here is depressed but rents are rising dramatically(including ours) and vacancy rates are at record lows(hence 1 reason for purchase)

Interestingly,we were able to negotiate a 5 year fixed rate of 6.79% with Commonwealth Bank which is only 2% higher than similiar Irish rate although Australian Federal reserve rates 2.5% higher than Ecb.

Hopefully contract signed by vendor before xmas so we can move in by December.

I use same rational for property as shares,buy on maximum negativity and sell on maximum market optimistic sentiment although if we get the penthouse will be very hard to leave.
 
Good news tonight-vendor signed contract so now have a nice 2 bedroom penthouse with shared pool/gym.

To give u perspective on current sydney market,vendor bought originally for $625k,apartment put up for sale originally for $605k,dropped to $585k and we put an offer in for $550 and eventually agreed on sale price of $555k.

As we're ftb,get a grant of $7k although have to pay $12,500 stamp duty due to being over $500k threshold.

The most important thing for me that we will only be paying an extra $100pw each compared to current rent although we are doubling size of our apartment .
Another factor is that housing supply is at record lows in sydney which will drive up prices in long run.

Price drop would seem to be consistent with DannyBuoys' calculations above.
 
congrats macbri on your purchase, sounds great.

I am Irish, i also have permanent residency in Australia. I am looking to buy in the new year. I know you mentioned you were 2km outside the city, can you be more specific? , which suburb?, i cannot find anything that sounds as good as what you have described for that price.

cheers
 
Hi Lucei,
I bought in Bourke Street close to Surrey Hills-I don't know if u know the Meriton apartments there.

Website is www.meriton.com.au and apartment block that I bought in is tiara which was built in 2002(also have Atarah & Jewel on website)

Apartment block is 3 years old and I think a lot of investors bought back then on 95% mortgages when interest rates were a couple of % lower.

We have rented here for 2 years and often walk into city(15 minute walk to Central & 20-25 to town Hall).

Thing about prices in sydney at moment is its' a buyers market-whatever vendor is looking 4,ask 30-50k below-we looked actively since September and apartments are currently not moving.

Best of luck in your search
 
Hi Luceyi,
Another point that I forgot to mention that there will be additional supply of property coming on market up to June 2007 due to recently announced super changes(up to June 2007,workers can put up to $1.5m into super which of course is tax free).

This will mean many would be retirees will try to sell their investment properties before June super deadline so they can put proceeds into super(will probably also cause rents to increase due to reduced supply).

A couple of useful websites for your property search are www.realestate.com.au & but 1st of all decide where u want to buy and what u can afford-remember for ftb no stamp duty below $500k.
 
macbri, congrats on your new home and thanks for sharing the info. Do you have any opinion on the development 'Aero' near Mascot? Too good to be true? Or stick to your suggestion of buying second hand investment properties? thanks
 
Congrats on the purchase......... I think the purchase of the Penthouse was a good idea. In a depressed market like Australia (just finalising my plans to head back today...cant take the winters here anymore ) it is always good to invest in an finite supply asset like penthoses or those federation style inner city houses. Interesting about the super changes. Good de-flationary move by the government. However if the investors do try to off-load their properties i think that rents may fall as the lead time to sell will be greater so properties will need to be rented before sale. Good luck in your new gaff. post a picture of the view ! Whats the market like on something like ...terrace in paddington. Are these getting below asking price aswell ?
 
Aero as u know is further out from the city and is probably located close to the airport(could be a problem when Quantas gets the new A380).

I didn't look at it primarily because of location but know prices are a little bit cheaper.I thought Meriton had sold all the apartments there(obviously I'm wrong) but if u want to buy there have a look at 2nd hand apartments in same development.If they are a lot cheaper then maybe worth considering.

On Padington nice area and closer to city than our purchase,however,price range is generally a lot higher although u might be lucky.

Property prices here have dropped the most on location(those further from city or beach have dropped the most so assume Paddington pretty immune from this although I'm only guessing)

Rents have increased dramatically here in the last 6 months and with investors facing higher interest rates,many are selling up and being bought by owner occupiers like us.As well,very few new developments in sydney which combined to super changes will lead to reduced rental supply and drive up rental value.The $1m super contribution has to be put in by 30th June 2007 so people will have to sell at least 2 months before this date.

Vacancy rates are also running currently at record lows less than 2%.
 
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