Real Estate Cooling down

I have been following real estate trends for the last 12 months..

I note market has cooled down a little..

Will it calm down further ??

In the market to buy our first home in Brisbane south.

Thanks in advance for your feedback

Comments

  • +98

    Will it calm down further ??

    People that try and time the bottom get stinky fingers.

    People should buy when they've money or stay forever on the sideline.

    • +28

      Not sure why you are getting negged.

      It's true, especially if you are buying a home to live as opposed to investment. If you can afford it and found a place you like and will keep long term just buy.

      • +8

        Just because you can afford it now that doesn't mean you will always be able to afford it

        • -3

          You think like that v and you've just increased your own chance of never being able to afford one. Not that I'm trying to say that is your goal, maybe you love renting, just like how those people on the NRMA ad says.

        • The problem is at the moment, people buy when they cant actually afford it. If you can actually afford it, itll get easier as you go along vs rent.
          Repayments stay the same.
          My tip, pay as much as you can to create a buffer

    • +5

      Well said! Seriously not sure why you're getting negged.

      • +2

        Probably because the expression is "people who try and pick the bottom". Was so close though and still accurate if buying a home to live in :)

    • +6

      What does OP mean by cool down?

      If OP is expecting prices to drop they may be waiting for quite a few months or even years until such time and banks are forced to significantly tighten lending standards or until interest rates rise by more than 2%. (given that banks must include a 2.5% interest rate buffer (now 3%) when assessing a persons capacity to pay the loan)

      For this to occur I suggest OP keep a close watch on the inflation rate which is surely moving up right before our eyes even though the RBA fails to recognize this or covers it up. As we all know inflation is running well above 3%. Its actually closer to 10% or even much more…smoke and mirrors!

      Looking forward into 2022 cooling down means less buyer frenzy and maybe a slow down or leveling of prices. Prices cannot keep going up forever!!!! At some stage real estate just becomes unaffordable (for most)

      Nothing more

      • +1

        I reckon any upwards movement in interest rate will spook investors and turn the tide. It probably won't cause it to drop to previous levels but don't think the current rate of increase is sustainable.

        • thanks for your input

        • -1

          Kind of what I said

      • -1

        Actually prices could keep going up forever.. and likely will… it's called inflation.

        • And its the RBA's job to keep inflation in check

          Interest rates are the first line of defense.

          Its just a matter of WHEN the RBA decides its time to COOL DOWN the economy

    • -3

      this x 100000000. The people I know who missed the boat compared to didn't make money on real estate because they bought at a bad time is inifity to zero

    • side note, the whole point of the stinky fingers is you are supposed to use the phrase 'if you try pick a bottom'.

      Cmon bra, where the double entendre at.

  • +6

    maybe

  • +4

    Where is Queensland south

    • +64

      New South Wales

    • sorry my bad… i meant Brisbane* south

  • +27

    Another 12 months at least of stupid pricing. It won't go backwards it'll just stall.

    • +2

      Agreed. If I had a house to sell and wasn't a stressed sale, if I missed the peak then I'd just hold

    • yup. I don't think they're going to get cheaper, just that the rate of increase will slow.

    • Agreed, however, sideways is not ideal - because it's actually negative with the costs of owning + you have to consider your cost of capital - ie your capital at the time is tied up in your house versus something else.

      Majority of people aren't investing their money elsewhere so doesn't matter + the adage RE trying to time the market albeit generic is sage advice.

    • +1

      The RBA will not cause a property crash
      Or if they do they will deny it was their doing
      Just like they deny this property boom is their doing
      Just like they deny inflation is running closer to 10%

      • you're confusing the role of the RBA, they only have one tool and it hasn't been working for a while at least from the time of the last governor. The guy that does have the tools just doesn't know how to use it and wasting it somewhere else.

  • +3
    • +5

      spoke to a mortgage broker yest- his words "banks are making it harder to approve loans"

      • +2

        It is but they won't make it impossible. Prices are forecasted to keep going up in 2022.

        Interstate migration into Qld and the Olympic Games outlook is gonna prop up the Brisbane market.

        • -1

          yes interstate migration is a big factor !!

          Should have bought in 2019 :P

          • @Sam Sharik: or 2009. Or 1999. But damn it, here we all are.

        • How will the Olympics impact house prices?

          • +11

            @colin5000: The North Korean team will all be looking to buy houses here after they skip the plane home!

          • @colin5000: In the lead up they'll be heaps of spending on infrastructure, stadiums, transport, doing up commercial areas etc.

          • @colin5000: Well they're making the bruce 3 lanes all the way and upgrading the rail lines between the Sunshine Coast and Brisbane. As a home owner on the sunshine coast that's pretty damn good. Especially Southern Sunshine Coast, where the more viable it is to commute to Brisbane for work, the more demand there is for housing.

      • +1

        Still easier than it was 3 years ago.

      • +2

        Pay less, pay cash.

        • You need to find a distressed seller who needs certainly of the sale going through.

          • @JIMB0: We managed that in 2019 and it was sooo lucky.

            Needs cash in hand and a tonne of luck.

      • +2

        Said the same to me when I engage a mortgage broker a year ago. I'm sure they all say this all the time to encourage you to use them…

        I fell for it, used a broker and the broker screwed everything up and I ended having to start over and do it all myself. Screw brokers, just as bad as real estate agents, really its not hard or rocket science applying for a loan and doing it yourself anyway.

      • i remember them saying that 3 years ago

      • +1

        Banks make a good chunk of their cash from home loans… they will only make it as hard to get a loan as is minimally required by APRA.

        Banks want to sell as many loans as they can, any way that they can.

        Oh, and as others have said, buy when you can, not when you want to, you’ll never win - had many a friend try and are still in apartments, whereas I bought as soon as I could out of uni and now live in a large home near the beach in Sydney in my early 30’s. I didn’t try to beat the market, I just tried to support my family. And got reasonably lucky.

      • it's actually in the best interest for banks to approve as much as they can, there's other governing bodies that make it harder for banks to approve loans

  • +18

    Doesn't it always slow down during the Christmas/New Years period?
    Lots of Conveyancing offices aren't even open.

    • +6

      Shhhh, don't tell anyone. It will destroy the media who are now playing the housing is cooling tune.

      If you tell everyone the market is cooling, guess what, it will.

  • +1

    If you plan to keep the property long term then just buy now/when you can.

    Sure you might see transient dip in price short term but in the long term its not going to make a difference.

  • Where are you looking, and what price range?

  • +2

    good luck waiting

    students / workers and international immigration / flights , are coming back this year

    • +31

      oh yes they're gonna do uber and buy every house in your favourite suburb.

      • +3

        No.

        They'll buy using money from their parents/family.

        • +17

          Dont think that is it.

          Most of the international student/workers have to struggle 5-10 years to buy a property.

          Most of them even struggle to pay their uni fees.

          • +11

            @Sam Sharik: their rent will subsidize investors interest payment of 10 properties

          • +36

            @Sam Sharik: If they're studying in Australia, many of my asian friends had cashed up families that would buy them a house/apartment straight out of uni. I feel this is where many Australian's are behind the eight ball we're they're going up against the wealthiest 10% of China (140 million people) vs 25 million for all of Australia

            • +6

              @Drakesy: Or investments. I own a townhouse in a 4 unit strata, and I'm the only owner who lives in the country.

              • +36

                @CheeseBeans: The government really has sold future Australians out.

                • +9

                  @Drakesy: so true… alot of first home buyers cant afford now… but what surprises me is they dont protest !!

                  no one says anything about the government stupid policies

            • +6

              @Drakesy: thats a minority though.. majority of the students struggle

              • +3

                @Sam Sharik: Yeah, but plenty of loaded ones too. Just walk through Melbourne or Sydney CBD. Lots of Chinese international hypebeasts decked out in Supreme, Kenzo, etc., most in my undergraduate course purchased the apartment they were living in during uni.

                • +1

                  @SydStrand: It's always easy to notice these ones, but they're the exception, not the rule.

                  I work at a university and the majority of international students are doing it really tough.

              • +1

                @Sam Sharik: I don't think a majority of (international) students struggle… a minority do. Remember these are international students, you can't be struggling if you're here paying $40k a year in fees alone.

            • +1

              @Drakesy: Exactly, not all students are struggling. Have asian friends who owned a Lexus as a student, then easily got a house in Clayton after graduation because his family was cashed up.

          • +2

            @Sam Sharik: Not sure which workers you're referring to but a vast majority of immigrant workers fall in IT, engineering, accounting and nursing professions and they are well experienced before they can come here. I doubt if they will arrive here empty handed or it will take them 5-10 years to buy a property. Your comment can be more true for international students though but not for immigrant workers who arrive here either on work visa or on permanent residency. Backpackers who come on a temporary visa or Kiwis (who can work here) are some other categories, though they make a tiny portion of the total immigrants I assume.

            • +4

              @virhlpool: On international students, some of my chinese friends were just waiting for their PR to be granted so that they can go rampant on properties
              Almost all of my friends bought an apartment of ~$1m or house within 1-2mths of getting their PR
              One girl had her parents fully pay that off on day 1 so that she never have to get a mortgage and able to splurge 100% of her pay on luxury goods
              What a life

              • -1

                @dummyboy87: Probably not within 1-2 months, there is 200-day minimum residency requirement after being granted PR to be waived the 8% surcharge.

                • +1

                  @hiaaron: Again i might be wrong - they werent waiting for the surcharge to be waived
                  They needed PR to set up some business or something so that they can bring funds out of China
                  My wife told me chinese people used to regard Sydney property prices as "bai cai jia" aka (price of a wombak at woolies)
                  Damm it I had to sell my life / soul to afford a MORTGAGE

                  • @dummyboy87: Sorry I misread it as you had to sell your wife, and I was thinking damn that’s a good wife

              • -1

                @dummyboy87: wish my parents were that rich

              • @dummyboy87: The immediate impact is from the immigrant workers and not international students. A lot of the workers arrive with PR already so they can buy the properties sooner than students would typically. Plus, the # of workers who come on PR and work visa is higher than the students who end up getting PR.

                • @virhlpool: Are immigrant workers coming to Australia with $1M in cash?

                  • @rektrading: You don't need $1m cash to buy a property. You need much less in cash and a good household income (loan eligibility) which they do.

          • +3

            @Sam Sharik: It really depends on which country they are from
            There is a post on a chinese social media app where people share their story on real estate in Sydney
            1) Most people appear to be [bragging?] about buying one property per year in Sydney and are so proud for owning at least 2-3 houses right now
            2) Most of them suggested that they work full time in Sydney - i dont buy that
            3) Chinese people seems to favour suburbs with more Aussies - eg suburbs like Gordon, Pymble, St Ives where property prices are [>3m?]

            I personally dont think property prices would go down because
            1) The fact that property prices went up when unemployment is pretty shit may suggest that funds came from overseas?
            2) People are not desperate to sell
            3) FOMO is still on rampant so people who have missed would jump on the slightest opportunity when market comes down a little

            Also, it appears that chinese student that come here will definitely not have issue paying tuition fees
            They are required to demonstrate proof of assets / wealth to be able to travel out of China

            • @dummyboy87:

              2) People are not desperate to sell

              That's not how market works. Market situations make some people sell their properties irrespective of their intent. There can be numerous reasons including fear, like how FOMO makes people buy properties too.

              • @virhlpool: Again maybe this depends on your circle of friends
                Mine definitely are quite relaxed about the fluctuation because most of their properties are paid off by parents
                Thats why I am preconditioned to think that most people would just hold on, and sell if they wanna upgrade

                Damm - i dont think they sell if they wanna upgrade, they just sell their China apartment and buy another here lol

        • +8

          I find it hard to believe… still so many people think it's caused by rich Chinese overseas buyers. Well media brainwash does work, doesn't it.
          Remember, last two years, border is closed and the price skyrocketed. Still blame the foreign investor??? Even if you do, check out the stats
          * https://www.dfat.gov.au/trade/resources/investment-statistic...
          * https://www.theguardian.com/australia-news/2021/jul/08/more-...

          • -3

            @pahuang: Did I say Chinese or are you trolling for a reaction?

            I've no interest in who buys what in Australia.

            Real estate is defined as an investment instrument and people should be allowed to trade it in an open market.

          • +1

            @pahuang: Might be totally biased here
            But the chinese numbers wouldnt have appeared in those stats
            When a chinese from PRC wants to get funds out of China, which is now extremely difficult i believe, he/she goes to an underground banker

            But i dont mind if you have other stats to show otherwise as i am really keen to find out for myself

            How is it that low interest rates can domestically drive up property prices in Sydney when
            1) No wage growth / average pay is ~$80k?
            2) Property price went up by x%, and most of them are in very expensive suburbs
            Try going to a bank with family income of 200k and i dont think you can borrow enough to afford houses in Sydney because indicatively you could only borrow $1.5m.

            • @dummyboy87: I am no expert and I don't have more stats to show but happy to discuss humbly. Here is what I think might be relevant to your question.
              1. Sydney properties are not just targets of Sydney residents. Same rule apply to cities like, New York, Tokyo, Shanghai. e.g. All of the wealthy Japanese would want to buy one in Tokyo if they can. So these cities are for entire country plus overseas investors not just one city. Local average pay is not relevant in this context.
              2. Most expensive properties are not for wage earners. Check out US stock and ASX performance in last two years.
              3. Most people don't have extra income other than wage. However there are always people who've entered the market early, is able to use existing equity to upgrade. From the stats all you can see if people are buying 2M properties with 100k salary.
              4. Currency exchange rate change. I am sure ozbargainer can figure this out. We buy stuff from Turkey, India and Argentina because their currency went downhill. AUD has also went down a fair bit.

              Government/media would tend to shift the blame to someone else because that's easy for them. As individual, IMHO, understanding the real reasons and react to it is far more useful.

      • +1

        yes , they will buy your house after getting burnt from Evergrande

  • It really depends how the fallout of evergrand goes and if it really starts to affect China and shut down their housing bubble.

    Also the investors will get cold feet if the market does start to cool, lets be honest it's overcooked a long way and guess who's pushing the surge, investors.

    When Perth first dipped, the investors pulled out and the fire quickly went out.

    I believe Perth is in for a plateau, whilst over east will plateau and decrease as interest rates start to lift.

    • I was hoping for Evergrand to blow up like GFC 2.0. That won't happen now that the CCP wants to save face.

      • +3

        and the can gets kicked further down the road.

    • Dont know much about evergrand.. alot of people are talking about it though

    • -1

      so what should be a good strategy to get in the market for first home buyer in brisbane ??

      WAIT or JUMP ?

      • +6

        Asking us if it's a good time is like asking us to read a crystal ball. Put it this way: housing prices have never meaningfully dipped in recent history, not during 9/11, the GFC, or a once-in-a-century pandemic. There are too many systems in place to protect house prices, so while growth rate might stall with increased interest rates and stricter lending standings, prices won't dip.

        You're also looking to buy in one of the few locations/states that had net positive interstate migration during covid, and as international borders eventually reopen, there'll be even more competition. If you're in a position to buy, buy. If you're hoping for a crash, it won't happen. Only wait if your intention is to keep working, but you might find the market is grows faster than you can save.

      • +8

        NEVER JUMP. NEVER WAIT.

        Buy when it is appropriate for you. It is NOT a case of "sooner the better". Things like your own job, family status, health, and other things are the factors you need to be concerned about.

        Don't worry about the market. You either can't get into it, because you were born in the wrong generation. Or you can, thanks to relatives, partner, booming career, or dumb-luck. But get out of the mindset of "timing the market" to buy-low/sell-high. That is for (profanity), I mean, property asholes (aka "investors"). A house is primarily a place you NEED to live inside it, and only secondary to that is it a store-of-value, and tertiary to that it can be an investment.

        I have two friends who have developed well, one has been living home, works hard, getting parents funded, bought a house during dip, enjoying great results. The other doesn't earn as much, rents, no parents funding, doesn't save much, and couldn't buy a house. But he has more money than the other because he put his money into investments which appreciated faster. With that said, the former is "happier" than the "latter"… and I think that is a important factor we need to consider in all things.

        • noted.. great advice

        • +1

          I'd add that when considering all things, be sure to consider one's capabilities. My folks tried all key forms of investments… shares, business and property. Lost a tonne of money on the first two due to their limitations. Had they just concentrated on the latter, they'd be far better off in life right now and not had so many health issues.

          But in saying that, my last property had serious issues with it that ended up cost me my health in the process of fixing it… and I know I do above average levels of due diligence with property already. Some defects you won't pick up till it's too late.

      • +1

        There are two ways to buy house.

        1. I need 4 bed house in this nice suburb and I believe I can easily or stretch a bit to get it. As I really want 4 bed house in this nice suburb.

        2. Here’s my budget. And I want 4 bed house in this suburb. This won’t fit in my budget. Options, I change this to either 3 bed house (maybe 2 bed) or I chose to look at another suburb and I may get 4 bed house there.

        When I bought my first house, I really had fixed budget. And I simply moved further from city to get nice 4 bed. As that was my need.

        Thing is, the sooner you get into housing, the better. Over time, property prices would increase. And hoping your income as well. These two factors would play part in getting you a house which you want now but maybe in 5 years. But you would be better off with two properties rather than one. Atb mate.

    • +3

      Also the investors will get cold feet if the market does start to cool, lets be honest it's overcooked a long way and guess who's pushing the surge, investors.

      I wish they'd invest in something else, maybe something that's productive…green energy or something. Why housing? Why compete with such a saturated market of buyers where plenty of people are just trying to find a place to live so they don't have to pay rent forever. I mean I want money as much as the next guy but there's a reason I didn't hoard up on toilet paper or buy any RAT tests…because I didn't need them and I don't want to sell it at a higher price to someone else just because.

      • @bkhm dont worry or wish for thing that are outside your control, there is nothing you can do that can change things that are outside your control

        focus on thing you can control, I can save more, I can invest in other assets, I can get a second job, I can start a business, I can increase my earning power.

        once you do that, you will find life is easier and you can really get what you wanted

        • What I want is for a better society, I couldn't care less about myself. I'm happy earning little money doing something that has a positive impact and I'm happy for forgo profits on a house if it means someone else can have affordable stability. Unfortunately, not everyone feels the same way and willing to whatever to make money. But with what I want, is determined by the actions of others and politicians.

          • @bkhm: run for a seat, becomes a politician and lobby for change, changes required actions not wishing

            Plenty of minority group get what they want because they lobby, they get up on their ass and start campaigning, they spent their cash advertising etc…

            If you do nothing then you have to accept what ever society throw at you.

  • +3

    In 2020 the experts predicted prices would drop but they got it wrong.

    They are now predicting a small increase in 2022 before a drop in 2023.

    They are bound to get it right eventually.

    • +8

      "experts"

    • +11

      These "experts" are also Real Estate lobbyists if you look into it.
      Even Banks to some extent have a hand in it. If they can pump the market and make it come across as 'expert advice' then they win out.

      It's the same 'experts' that claim Perth will run out of residential land in 3 years time

      Literally lobbyists passing off their BS as gospel

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