yep everyone take whinos advice and get out your timing lights and buy buy buy !
Quote:The days of property prices only going up are well and truly over
The housing market landscape has changed and so too has the behaviour of borrowers, lenders, developers, valuators and buyers’ agents. There are now many high risks associated with residential property including oversupply, credit restrictions, the impact of the Banking Royal Commission and imbalances in the market.
Add to that the prospect of an ALP win at the next federal election, and with it reforms to negative gearing and capital gains tax, and there is much cause for concern, especially if a blanket approach is taken with their introduction across the country.
RiskWise Property Research and WargentAdvisory’s The Impact Analysis: Negative Gearing, CGT & Australia’s Residential Property Markets report assesses Labor’s proposed reforms to negative gearing and the capital gains tax (CGT) discount, and the implications if implemented.
How behaviour has changed:
Investors have a major impact on dwelling prices. According to the RBA they can amplify credit and dwelling price cycles.
One of the reasons for this is because investors purchase more off-the-plan dwellings than owner-occupiers, meaning they contribute to larger upswings in construction leading to the risk of future oversupply, particularly of units, in some locations. Conversely, elevated levels of investor activity may amplify any subsequent downswing, increasing risks to the broader housing market, particularly in areas that carry a higher level of risk for oversupply.
Also, rental properties are not always fully substitute products with owner-occupied dwellings (rental properties are typically smaller, carry a higher price per square metre and are closer to CBDs).
This means there is inherent risk associated with them as they do not appeal to families looking for three bedrooms plus outdoor space, close to schools, transport and employment hubs.
An example of a recent change in investor behaviour can be seen in Footscray, Victoria, where a RiskWise report analysis for one private investor considering buying an off-the-plan unit showed it was extremely high risk.
The development was a 40-unit high rise and the unit had only two bedrooms with no car parking. It had a rental return of $450 per week for a property value of $575,000 and strata payments $600, plus it was in a very oversupplied area.
Currently there are a large number of high-rise properties being offered to a smaller number of investors.
This has resulted in a reduction in activity and had a major impact on the market, including owner-occupiers. The investor market share in Sydney decreased between January 2017 to March 2018 from 50.4% to 43%.
A similar trend was witnessed in Melbourne, from 39.1% to 34.9%.
In addition, Foreign Investment Review Board figures show residential approvals to foreign persons fell sharply upon the introduction of application fees and duty surcharges from 40,149 in the financial year 2015-16 to 13,198 in the financial year 2016-17.
Chinese authorities have also made it more difficult for its residents to purchase overseas.
Borrowers are by far more aware of the risks regarding off-the-plan and are changing their investment strategies, purchasing existing dwellings, particularly houses, rather than units.
A prime example of the impact of borrowers on dwelling oversupply and price reductions is units in inner-city Brisbane.
The area has experienced a high volume of apartment construction, stock listings and elevated vacancy rates, and there has been widespread evidence of price discounting and falling rents.......
https://www.businessinsider.com.au/australian-housing-market-downturn-2018-7