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House Prices Falling

Discussion in 'Real Estate' started by crc_error, 29th Nov, 2007.

  1. crc_error

    crc_error The Rule of 72

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    Looks like house prices are finally starting to fall.

    Medium price for St kilda in Sep was $711,500, however October its $468,000

    House Prices Australia from MYRP - Australian Property Prices

    South Yarra has the same story.

    Sep 1,080,000; October is 727,000

    House Prices Australia from MYRP - Australian Property Prices

    12 month growth for south yarra is -0.8%

    with another interest rate hike around the corner.. we can only presume more downward pressure on house prices. This is good news, as I'm looking at entering the market hopefully in the next couple years!

    Will be interesting to see the November medium price!
     
  2. DaveA

    DaveA Well-Known Member

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    Yeah but its hard to take the median prices in sales. One year you can sell 10 propertys very different to the following years 10 properties and its always going to skew the results. The south yarra one i believe but does anyone really believe suburbs are dropping 30-40% in 6 months. I surely dont....

    Remember interest rate rises only effect certian subjects. Do you think the people in Pymble or Syd's North sure care about the interest rates. A one bed unit in manly is like $600k. Thats like 50k interest a year and their would need to be a combined income of over $150k for interest to be less than 30% of their wage.

    Dont get me started on the bloke who bought something (residential) for $29m only to knock it down and rebuild
     
  3. crc_error

    crc_error The Rule of 72

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    Dave, I agree, this is why really we will need 3 months of data to confirm if prices have actually dropped. Property prices are generally hard to follow..

    I doubt the price did fall 30-40% but it does show a downward movement.. once we have nov and dec medium prices, the picture should become more clear.

    In saying that, two suburbs which I watch (st kilda and south yarra), have actually shown down trend..
     
  4. MJK

    MJK Well-Known Member

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    I find the best way to check price movements is to regularly visit for sale websites in the areas you are interested in and follow the prices of private sales. In Victoria where sales are predominantly auctions you need to get out to the auctions or check prices in the paper at auction results.

    Homepriceguide has its value but needs to be read in conjunction with your own research.

    Having said all that I suspect there may be a little plateauing going on in Brisbane and Melb who have has stellar runs this year.

    MJK:D
     
  5. MichaelWhyte

    MichaelWhyte Well-Known Member

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    Hi crc_error,

    Nope, the Sydney areas I'm looking at are holding up nicely thank you very much. In fact they're booming ahead at 10%+ pa growth rates.

    http://www.domain.com.au/Public/Art...Index&headline=Sydney++39;s split personality

    I'm a Northern Beaches investor, so Avalon and Seaforth in that article best represent my market. But the title says it all. It really is a tale of the affluent vs non-affluent suburbs and their differing performance of late.

    And in reference to the Northen Beaches:

    Cheers,
    Michael.
     
  6. crc_error

    crc_error The Rule of 72

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    According to RPData, Avalon results are:

    2007 -1.2%
    2006 -7.2%

    Seaforth

    2007 +14.2%
    2006 +10.15%

    Current Medium of Seaforth is 1,365,000, whereas October 12 months ago it was 1,305,000 so really looks like 2008 results are going to be flat. Last couple years results have been good for seaforth.
     
  7. MichaelWhyte

    MichaelWhyte Well-Known Member

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    crc,

    Seeing as you have access to RPData, could you let me know what Mona Vale and North Narrabeen have done over the last few years? Mona Vale is my IP and North Narrabeen my PPOR.

    Although, you've got to be careful taking those results as gospel due to the potential for a statistically invalid sample set. There may be not enough sales to be statistically viable. Can anyone remember the absolute minimum sample set for statistical viability? Was it 100 odd, more? The results can be skewed when there's too few to make for a representative sample.

    Still interested in Mona Vale and North Narrabeen though. ;)

    Cheers,
    Michael.

    PS I see negative or flat as a good thing as it shows its shaping for a nice boom when it goes. Property prices are like a stair case. Sharp jumps then prolonged flats while it rebalances.
     
  8. crc_error

    crc_error The Rule of 72

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    Mona Vale

    2007 +6.7%
    2006 +11.1%

    current medium 2,200,000

    Sep 07 medium was 780,900 so this result looks a little skewed.

    Oct 06 was 900,000
     

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  9. crc_error

    crc_error The Rule of 72

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    North Narrabeen

    2007 +3.4%
    2006 +1.7%

    current medium is $720,000 Sep 07 1,315,000

    October 06 $830,000 Nov 06 $645,000
     

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  10. Apprentice

    Apprentice New Member

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    CRC,

    The REIV website has StKilda at a median of $755,500 for the Sep 07 quarter up from $750,000 for the June 07 quarter. Even so they indicate that even their data may be statistically skewed as there wasn't more than 30 sales for the quarter. Perhaps relying on a few sales within a month is even less reliable.

    Cheers

    Apprentice
     
  11. crc_error

    crc_error The Rule of 72

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    I don't consider the data REIV publish. REIV data is what realestate agents choose to submit to them, hence agents will only submit their 'better' results.

    RPData I believe uses data submitted to the lands office.. so they use every sale in their results.. not what agents submit to them.
     
  12. MichaelWhyte

    MichaelWhyte Well-Known Member

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    Yep, a bit skewed indeed! ;)

    I guess that's the point I was trying to make about using these statistical medians as a benchmark for how that market is actually doing. If Mona Vale reverts to the mean around 800,000 then that will show as a huge percentage drop won't it! :eek:

    Thanks for the numbers though. All looking good...

    Cheers,
    Michael
     
  13. Dr Lobster

    Dr Lobster Well-Known Member

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    What's a median ?
     
  14. samaka

    samaka Well-Known Member

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  15. Dr Lobster

    Dr Lobster Well-Known Member

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    Sorry, the net isn't so hot for transmitting sarcasm. Perhaps I should have used this guy :rolleyes:
     
  16. samaka

    samaka Well-Known Member

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    Lol - either that or a grammar nazi one. :D <- just to show I'm kidding!
     
  17. crc_error

    crc_error The Rule of 72

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    Looks like this news.com article is supporting my view:

    Property investors bide time | NEWS.com.au

    INVESTORS are marking time as nationwide demand for properties fell by 7 per cent during the third quarter of 2007.

    Tasmania had the biggest percentage fall, 48 per cent, while Queensland had the largest drop in numbers, 80,000, which represented a 36 per cent drop over the period.

    Victoria and South Australia/Northern Territory were marginally lower by 2 and 3 per cent, respectively.
     
  18. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    They said that demand had fell - not that prices had fell. Pretty simple explanation really - everyone always waits for an election result before making a decision like this ... happens every election.

    I expect demand to pick up again now that the result is known.
     
  19. crc_error

    crc_error The Rule of 72

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    lower demand = lower prices.. hence why some suburbs I pointed out had a lower October medium.. it well may pickup again.. only time will tell..

    plus I hardly think anyone will put off buying a house because of a election.. typically spring is the busiest months of the year for realestate.
     
  20. samaka

    samaka Well-Known Member

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    If you believe that the outcome would affect interest rates - then surely it would.