Sydney house prices

One common trait in bull markets is that investors believe that 'this time it's different'. Especially, as Australia has not had a serious house price correction or crash in some thirty years.
Another thing to keep in mind is that historically, prices revert to the mean. If they are extended or over extended as in this case, the reversion is generally more severe. Like stretching a rubber band as far as possible in one direction and the snap back results in a devastating bear market.

The (investors) usually try to weather the storm and will point to the rental income or negative gearing maintaining their buy and hold mentality with the perception that rents will continue to go up in a climate of rising interest rates. However, when prices decline, rental yield and vacancy rates rise and rents are forced down.

Ultimately, when markets decline, there is a slow realisation (that this decline) is something other than a "time to buy another house opportunity". As losses mount and the banks come knocking, the related anxiety rises until individuals seek to avert further losses by selling.

Putting a time on it is the Million Dollar question!

Well it took a couple of weeks this time but we're just a few off 400 for sale. Ker razeee

Human emotions are strange and unpredictable. In fact, I could be wrong about the last word, what I should have had said is "predictable unpredictability". I think I got myself all tangled up in words now !

Let me use the share market an an example. It is unpredictable for sure. But there is a high degree of predictability as well, it being people goes with the mob. And fears and anxieties are only some of the ingredients to make matters even worse.

Take my friends for example. In Melbourne, with low to middle income, trying unsuccessfully to buy their own home. That is obvious as the prices kept going up. So they waited and more waiting until wait no longer. And they bought a 3X1 in an outer suburb of Melbourne for nearly $400,000.

$400,000 ? I told them it was way too much. No. They argued that within a month, similar houses in the same area has gone up by $20,000 ! So there you go...it is the fear and anxiety. Fear of not being able to buy one anymore. So if everyone thinks like this, wouldn't it push the prices higher and higher ?

I'm going through the list of stuff sold and checking the previous buy date and price, and there's a bunch of (what appears to be) rental stuff thats being sold for only 30,000-ish more than when they bought, and a couple being sold within 12months. Even if they spent the minimum on maintenance and had some rent income, would these sellers break-even taking all taxes into consideration? Compared to 3% bank savings account interest, would it be worth the hastle/stress/effort with or without a loan?

Gold Coast real estate market is dead. I know because it's where most of my money is, albeit all paying for itself.

Sydney has shot up because fully half of its population was born overseas. Especially recently the influx of money from overseas can't be ignored, except by politicians.

I reckon that has to eventually overflow into other parts of Australia, and historically that has been the Gold Coast near the top of the list.

I think the games next year will give the GC a lot of exposure nationally. We'll see what happens.

This is on the ABC News.

www.abc.net.au/news/2017-09-11/500b-dollars-of-liar-loans-in-australia-ubs/8892030

It is not really surprising that people are desperate to get into the thick of it for the fear of missing out. Perhaps a recurrence of "low doc loans" ?

Buying a shoe box in inner Sydney for a million is nuts. But that's what cash up baby boomers are spending.

When have they ever fallen in sydeny realistically .?
Because if they had it wouldn't be so expensive now.

Can anyone provide some examples of a bubble that didn't burst?