Property in Australia

[alsoknownasDean]

Prices here in Melbourne and in Sydney are down around 10% year on year. I guess the question is 'how much lower it will go'.

I've heard people say it's about to start/started increasing, and reports saying that the prices look to continue to fall.

I wonder how many of the more bullish publications rely on RE advertising heavily for revenue or have substantial investments themselves?

I'll start looking again in a couple of months. Should be fine but just need to wait for the right place to pop up.

I will say though, in plenty of the 'sold' sections of the RE sites, the prices are shown as 'contact agent'. Presumably the agents don't want to reveal the pricing because it's below what they expected originally.

[Little Aussie Battler]

We also have to keep in mind that RE agents don't really care about the price. They just want high churn, so will tell buyers and sellers whatever they think helps them achieve that.

[bigchrisb]

I'm watching the market with a passing interest - would consider upgrading PPOR if the right place came along at the right price.  In the areas I'm looking (Canberra), things are getting less competitive, but prices themselves are only slightly moderating so far.   I also suspect that the next recession will be ugly for housing.  As to when that will be, no idea.

[Alchemisst]

Since Australian property is quite expensive I have been trying to figure out whether it is worth buying or continue renting and put the deposit/ rent saved into index funds. Seems much easier to buy in places like the U.S where you can buy for cheaper than renting and even make money renting out the spare room etc..

[mrcheese]

The house next door to me is up for sale for 70k less than it was purchased for 5 years ago. Seeing as it is basically identical to mine, I'm feeling a little bit depressed...

[Fresh Bread]

The house next door to me is up for sale for 70k less than it was purchased for 5 years ago. Seeing as it is basically identical to mine, I'm feeling a little bit depressed...

That sounds like a massive drop. What location are you MrCheese?

[itchyfeet]

The house next door to me is up for sale for 70k less than it was purchased for 5 years ago. Seeing as it is basically identical to mine, I'm feeling a little bit depressed...

Which city?

[mrcheese]

This is in Perth. I'm guessing they want a quick sale.

[marty998]

The bank just lopped $80,000 combined off the valuations of my properties last week.

I am still well up overall on them, but that was not a nice feeling. My net worth "growth" for the year is suddenly -$2000.

[arebelspy]

IDK how it works there, so can you explain to me why the bank was evaluating the value of them at all?  (For us, it would only be done when selling, refinancing, etc.)

[chasingthegoodlife]

I’m also curious about that?

I’ve just been using On The House, and for the unit other sales in the block, to get a rough idea.

Have been meaning to ask some REAs for estimates but haven’t quite got around to it.

Curious to know how others track their valuations?

[marty998]

IDK how it works there, so can you explain to me why the bank was evaluating the value of them at all?  (For us, it would only be done when selling, refinancing, etc.)

@arebelspy  My Bank (through its app and online banking system) has a function which is basically a net worth calculator - it knows all your transaction, savings and loan accounts, and the property assets used as security. You can manually add your shares not held through the Bank's brokerage arm, or any other assets and loans and voila, a net worth spat out for you.

The Property valuations are sourced from a combination of RPData and CoreLogic which is the local property industry's companies that track all sales and purchases (your equivalent of Zillow(?)) and are updated whenever new data is input - generally 2-3 months after enough recent sales have occurred in the area to re-calculate an estimated value.

The Big 4 banks here control about 85% of the entire home loan market, so they basically know everything about everyone anyway. Not too dissimilar to certain tech companies in that regard, although much more highly regulated...

[Fresh Bread]

I love the data on On The House for the history. My neighbour bought their place for $83k back in the day :) They've just sold it for over $2m and should have a pretty nice retirement (moving to a cheaper area). I reckon they have achieved about 10% down from if they'd sold in the crazy peak, maybe 15%, but you just wouldn't care after 35 yrs, would you, it all seems like crazy money.

[marty998]

I love the data on On The House for the history. My neighbour bought their place for $83k back in the day :) They've just sold it for over $2m and should have a pretty nice retirement (moving to a cheaper area). I reckon they have achieved about 10% down from if they'd sold in the crazy peak, maybe 15%, but you just wouldn't care after 35 yrs, would you, it all seems like crazy money.

Yeah I've always found On The House quite useful, but I've noticed lately its estimated property value ranges are becoming wider and wider.

It's never an exact science I'll admit, but I don't want to have to say my net worth is between a several hundred thousand dollar range :)

[Ozstache]

Yeah I've always found On The House quite useful, but I've noticed lately its estimated property value ranges are becoming wider and wider.

I use On The House too, but last month it was way off the mark saying our house price dropped $135K in a month and that my MIL's place increase by over $100K, with both houses being in a relatively flat market at the moment. Big grain of salt with estimates from this site lately.

[itchyfeet]

Whilst I do look at On The House and other online valuations of my specific properties (which are quite different from web site to web site), on a month to month basis, I have little faith in them.

In practice I use the Core Value Index for Sydney and Brisbane to approximately track changes in value of my houses. I also monitor sales most weeks and from time to time there is a sale that is a very good reference to my places, which might result in me making a judgemental change to the value I carry them on my spreadsheet. I try to stay on the conservative side with my valuations.

Currently on my house in sydney, Ia showing a value in my spreadsheet that is $100K below ON The House.

[Fresh Bread]

On the House is only useful for history and looking up what your neighbour sold for when the other sites say "price withheld" ;)

[happy]

On the House is only useful for history and looking up what your neighbour sold for when the other sites say "price withheld" ;)

Allhomes is useful for this too

[alsoknownasDean]

Mixed reports around. Some are saying the downturn has further to run, yet auction clearance rates in Melbourne and Sydney are trending up and are around 60% now.

Together with whatever the RBA decides on Tuesday, it'll be interesting to see what happens.

[Bloop Bloop]

Suspect downturn still has a bit to run, assuming Labor gets into power, cuts out negative gearing, and its tax hikes hit high-income earners. All those things will hurt demand.

[deborah]

Everything I read says it has further to go, no matter who’s in government. But no one seems to be very good at gazing into a chrystal ball these days. When they were predicting the downturn, they all seemed to be saying it would last three years.

[marty998]

Suspect downturn still has a bit to run, assuming Labor gets into power, cuts out negative gearing, and its tax hikes hit high-income earners. All those things will hurt demand.

Wonderful.* Perhaps then Property investments will stack up on their merits like they do in the US, rather than require help from the taxpayer to make the investment case work.

Also wonderful, in that I might be able to buy a house without having to pay lottery winning type money to do so.

*Note I am the target subset of the population who will be slammed by the proposals, but, at the end of it all, I'll still be better off than others, because I won't throw my toys out the cot like a baby and sell everything. I'll continue to invest where it makes sense.

[Bloop Bloop]

I hope property stays stagnant for a while but ideally I don't want governments trying to help FHB over investors - I've never seen housing as anything but an investment asset. I think the ideal of everyone owning their own house is a little outdated.

[marty998]

I hope property stays stagnant for a while but ideally I don't want governments trying to help FHB over investors - I've never seen housing as anything but an investment asset. I think the ideal of everyone owning their own house is a little outdated.

I don't see it that way. Owning a house outright and having a job/income is the best antidote to poverty. Too many people, women especially, enter retirement with neither a home, nor a nest egg to their name.

You can't rent in retirement and be on the age pension in Sydney. Surefire way to homelessness, and the consequences of taxpayers picking up the bill for that are much worse.

I can see you sit on the side of not using taxpayer dollars to help anyone. I'd rather the government spend a little now to help people into the housing market, and save a hell of a lot more money in future in not having to pay for things like rent assistance and other welfare benefits.

[Bloop Bloop]

Although I don't disagree with what you said, I have two major objections to the current state of gov't intervention:

1. The smattering of FHOG/FHB stamp duty exemptions do nothing other than push up property prices. In other words, they're inefficient and don't help the people they're intended to help.

2. Whilst I sympathise with the need to give people a nest-egg in retirement, the current system is actually overly generous to retirees, because their PPOR is not counted. This means the government is effectively subsidising the passing on of property from one generation to another - by paying people a very generous pension despite them owning a property. There is no justification for this, and it leads to all sorts of distortions.

[marty998]

Although I don't disagree with what you said, I have two major objections to the current state of gov't intervention:

1. The smattering of FHOG/FHB stamp duty exemptions do nothing other than push up property prices. In other words, they're inefficient and don't help the people they're intended to help.

2. Whilst I sympathise with the need to give people a nest-egg in retirement, the current system is actually overly generous to retirees, because their PPOR is not counted. This means the government is effectively subsidising the passing on of property from one generation to another - by paying people a very generous pension despite them owning a property. There is no justification for this, and it leads to all sorts of distortions.

I agree with both of these points (quite strongly in fact). The challenge is if you don't provide direct assistance to the first home owner then some of the concessions afforded to the seasoned investor need to be wound back.

The extent to which those concessions should be wound back is a debate without an answer I feel, because the circumstances of every property market in Australia is different.

[alsoknownasDean]

Given the recent issues in Sydney with structural issues in apartment buildings and subsequent evacuations, I suspect the values of many apartments have plummeted. I certainly wouldn't buy one.
p

[alsoknownasDean]

Anecdotally there seems to be an awful lot more people at inspections lately. Slightly annoying as I'm ready to buy now haha.

[Wrenchturner]

As a Canadian I find this thread fascinating.