It's taking longer to double your property price

It's taking longer to double your property price
It's taking longer to double your property price

Almost everyday there's a new contradictory report backed up with data and opinion on Sydney's anticipated price direction. Who to believe? The spoiler or spruiker? What to do with your life?

The likelihood is no-one really knows, especially given the negative gearing doubt, but owner occupiers should thoughtfully proceed with caution in this low interest rate environment, while investors will continue t weight up their chase for yield without emotion.

Estate agent John McGrath recently advised that at the end of housing booms, buyers can get a bit obsessed with timing.

"They often hold off believing (or rather, hoping) prices will fall and this delays their purchase," he said, suggesting it comes at a potential cost.

He says after being in the game for 32 years that buying the best property you can afford, when you can afford it; and holding it for the long term is always the best play.

"Believe me, time in the market is much more important than timing the market when you buy," he suggested.

True, but overpay and then sell during the dips Sydney has periodically recorded in recent years, and it's a costly loss. 

Recently $2.62 million secured a Woollahra terrace that sold at $2.7 million in 2007, which provides delicious conversation at the home buyers' house warming.

At Rose Bay, a Harry Seidler-designed penthouse sold last week for around the same $5.6 million price bought it for a decade ago.

The 2/20 Ian Street, Rose Bay apartment sold on Friday ahead of a planned auction through 1st City agents Alexander Gold and Rod Fox.

 

There are plenty of near backward prices undermining another adage that Sydney property doubles every seven years.

The more recent housing cycles have necessarily seen this adage adapted to every 10 years.

But I saw a Macquarie Street, Sydney CBD apartment sell recently at $2 million, having been bought off the plan in 1999 at $1.01 million.

Nationally only 32 percent of homes are currently reselling at double or more than their purchase price, typically owned for 17 years.

Cameron Kusher at CoreLogic RP Data did some research on the decade to January 2016, finding home values across the combined capital cities increased by 72 percent which suggests values aren't doubling over the decade.

If we look at the split between houses and units, house values are 73 percent higher compared to 64 percent increase in unit values.

Although combined capital city home values haven’t doubled over the past decade, the previous decade was quite a different story.

Between January 1996 and January 2006 combined capital city home values increased by 151 percent with house values up 159 percent and unit values 110 percent higher. B

Taking a look at value growth across individual capital cities shows a diversity in results as Melbourne was the only capital city housing market where home values doubled over the past decade.

Home values in Sydney and Darwin have each recorded increases of more than 75% over the past decade.

Brisbane, Adelaide, Perth, Hobart and Canberra increased by less than 50%. 

But over the 10 years to January 2006, home values more than doubled across every capital.

It all suggests the days of rapid value rises are behind us, or or at least for most of us.

This article was first published in the Saturday Daily Telegraph.

 

 

Jonathan Chancellor

Jonathan Chancellor

Jonathan Chancellor is one of Australia's most respected property journalists, having been at the top of the game since the early 1980s. Jonathan co-founded the property industry website Property Observer and has written for national and international publications.

Tags: 
Property Prices Property Growth

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