I moved away from Brisbane, partly because of unemployment rising. Doesn't matter how cheap it is if people can't get jobs.
The Mother of All Booms is Coming??
- Thread starter sash
- Start date
I moved away from Brisbane, partly because of unemployment rising. Doesn't matter how cheap it is if people can't get jobs.
There's always buyers......for the right price that is.
Sydney is an ever growing City. Realistically, when construction stops, it will put more & more pressure on rents, pushing prices up, and tenants will have no option to either pay more, or move further from the City.
As rents & housing prices move at a different time, we will see a 'boom' in rental prices, so yields will move on up to a more acceptable level.
Hope rents do go up Skater, the stagnation in rents in Sydney (Bris and Melb included) the last 3 years has been getting to me. But I s'pose rental growth and record low interest rates at the same time is too much to ask for.
Unfortunately I can't see any trigger in the near future for rents to increase.
It was the same last time around.
I'll talk bread & butter low income properties, because, hey, they are the ones that are more inclined to struggle when money is tight.
So.....last time around, I was getting around $170pw for a cheap 3 bedder, (down from it's previous high, of around $200pw). This was at, or near the peek of the boom. Prices stayed at that level for a couple of years, and then, almost overnight, the rents went up, up, up. Every 6 months we were able to increase prices by around $20pw. Those same properties are now renting for in excess of $300pw.
It's all down to supply & demand. If there's no new housing stock, and lots of extra residents coming into an area, there is only one direction that rents can go.
So I guess the trigger is a couple of years off. The new builds have to stop, or slow down, & then, sit back & watch what happens.
my thoughts exactly. I am looking at returning to London, the 2 bed apartment I sold has gone from $500k to $2m but you get that, the jobs and money are there so you just pay it
So I guess the trigger is a couple of years off. The new builds have to stop, or slow down, & then, sit back & watch what happens.
The trigger could be before then and it won't be a case of increasing rents.
There are currently construction cranes all over Sydney so as those new builds become rentals and PPOR's, there will be pressure on rents and property prices.
Couple the oversupply of rentals with lower demand for houses as well as rising unemployment and let's see what happens
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The trigger could be before then and it won't be a case of increasing rents.
There are currently construction cranes all over Sydney so as those new builds become rentals and PPOR's there will be pressure on rents and property prices.
Couple the oversupply of rentals with lower demand for houses as well as rising unemployment and let's see what happens
I have to disagree! Yes, initially there will be oversupply, but unless they put a stop to new immigrants coming into the country, this is only temporary. The new stuff will get absorbed into the market, and we will start to see pressure on rents. Of course, this won't happen over night, but it will happen.
The cycle for rents has always been at a different time to the cycle for property growth. As we near the end of the property growth, so we near the start of the growth in rents.
If unemployment keeps on going up they'll probably have to reduce the numbers of skilled migrants
And if pigs fly, we'll probably see the Sydney median at $3m by the end of the year.
Look, I don't have a crystal ball. You say IF, and PROBABLY, but you don't know anything for sure.
All anyone can say with any real certainty is what has happened in the same situation in the past, and I've seen a few cycles & so far they have all done the same thing. AND yes, I know that just because things have happened a certain way in the past, does not guarantee they will happen the same way in the future.
Besides reduce does not mean cease, anyway.
Yes, when the interest rates start to go up, it won't be pretty, but again, this will put upward pressure on rents, as people default & have to sell (at a discount), they still need to live somewhere, so will need to rent.
And you do?
A reality check is always good.
What makes you think that migration will continue in large numbers?
Unemployment is going up and as far as I know the boats have stopped coming.
Many Engineering and maintenance businesses are light on work right across the east coast.
Mining companies no longer have shortage of workers.
At the same time Abbot is trying to cut costs further so they will be offering redundancies...
Sydney is not immune either and you can see this on company profit reports.
Apart from housing construction I can see that there is very little construction going on, projects are finishing and new projects such as the NW Rail link and the new airport are not about to start for a long while.
The only +ve in all this negative picture is that a weaker economy means lower interest rates so people like you and I will benefit.
I am inclined to agree with BV.
Where will renters find the extra income to pay for ever increasing rents?
If they aren't going to increase dramatically then I can't see how they would be able to afford the increase you want.
You might argue that those renters would then move out of Sydney to some where affordable, only to be replaced with others who can afford to live here. But the fact is, those renters already living here are probably earning the highest incomes in the state.
Where will renters find the extra income to pay for ever increasing rents?
If they aren't going to increase dramatically then I can't see how they would be able to afford the increase you want.
You might argue that those renters would then move out of Sydney to some where affordable, only to be replaced with others who can afford to live here. But the fact is, those renters already living here are probably earning the highest incomes in the state.
This may be the case but logic doesn't always play out this way, think 87-89 or 02-03. BN had another spike in 07- early 08 and only this one I think could be said to correspond with any mining boom. You could make an argument that it underperformed relative to other cities throughout much of the mining boom.
Maybe BN is in another 1990s type market situation with a extended period of low growth or relatively flat before rising again. Unemployment was higher for much of the 90s than now from memory?
How?
By cost cutting?
IMO now is the time to borrow when money is so cheap
so they should be increasing spending and not reducing it.
When are they going to borrow?
When interest rates are high?
If they need more money they should increase taxes.
Employed people can pay taxes, Unemployed ones can't
Are you forgetting the growth of last year was caused by one off factors. FHBG, lowest interest rates in 40 years, massive stimulus, Govt bank guarantees etc etc.
Thats all finished now and rates are rising fast, how can you be so sure we are the start of a boom?
I reckon prop and sash head to head for spruiker of the year award. With daylight a distant second.
Id love just for once to hear some unbiased commentary.
Looks like the 'biased spruikers' and 'vested interests' were right again.
Originally Posted by sash View Post
. I think you will see this once the Newman govt is voted out and Southerners again move to Brissie.
now thats an odd combo
ta
rolf
geeze your implication of people racing to brisbane to support the new temporary minority government driving prices over the last 90 to 180 days is probably hard to support with data......................
ta
rolf
. I think you will see this once the Newman govt is voted out and Southerners again move to Brissie.
now thats an odd combo
ta
rolf
geeze your implication of people racing to brisbane to support the new temporary minority government driving prices over the last 90 to 180 days is probably hard to support with data......................
ta
rolf
OMG!! Is your sole purpose in being here to spruik negativity, because you are doing a great job of it?
I said that I don't have a crystal ball, you even quoted it.
The fact is that you can suppose all you want to about how bad things can get, but I've heard it all before during other cycles, and each time the same thing has happened.
So, yes, this time it might be different, but I doubt it.
It's not the increase I want. I don't drive the market. The renters will, themselves, push the rents up via supply & demand.
Have you not rented? Did you not get rental increases? The cost of living goes up, wages go up and rents go up. Nothing stays the same. It's the same argument as saying that housing prices can't go up because people can't afford it.
Where will homeowners find the extra income to pay for ever increasing house prices? See, same argument! The only thing that has changed is that it is homeowners instead of renters.
A classic example of how supply & demand works is with houses selling by "Offers Over". You put in your best offer, but someone else is willing to pay much more, so they get the house. I've got first hand experience with my recent sales on this. When asking the Agent what they thought the final selling price would be the reply was "Well....I think the property is worth around X, but to be honest, we have absolutely no idea of what someone will be willing to pay for it."
Sash probably gained a lot of followers with this post. Wonder how his other post calling out into the future for a fall in Sydney in 3 years time will pan out. Time will tell
It's hard for newbie like myself to read what I want to read, hear what I want to hear, as there are many opinions from different background. This thread reading from start to finish over a year period gives me some good information to get better at reading people.
It's hard for newbie like myself to read what I want to read, hear what I want to hear, as there are many opinions from different background. This thread reading from start to finish over a year period gives me some good information to get better at reading people.
