Swerv-o

It's been pretty stagnant here in Sydney since I arrived - When I touched down in 2006, there was lots of talk of a massive impending crash which never came. Then along came the GFC - I signed my house contract 3 days before Lehman Bros went under - and it still didn't really dent the housing market.

It will be interesting to see if proper recessionary type pressures start to push house prices down. Availability still remains a key issue in Sydney, and there are lots of people earning huge amounts of money that seem quite happy to pay above the odds, particularly if they are locking in low interest rates for a number of years.


S

Zen10

This will be interesting to watch. We're seeing the start of that process now, with a slowdown in China, and possibly a hard landing there as well. I have written before about the foolishness of allowing the mining sector to grow so large, and now that will become more obvious I think. We're also seeing companies like Ford shut down and move out, with the loss of thousands of jobs plus an impact on the parts industry as well.

bcworld

Around here almost everything sells at auction. The market seems a bit hot again as well.

We have been looking around and anything that is quoted with a range sells for way over that...probably the ranges being deliberately misquoted in the first place which I thought was against the rules.

Some examples I have seen recently:

Quoted 780 - 850 : Sold for 940
Quoted 720 - 800 : Sold for 880
Quoted 680 - 740 : Sold for 895!

The last one was just silly. Someone really paid over the odds there!

KJCherokee

In Brisbane the council rates are based on the 'unimproved' valuation of the land whereas in Adelaide they are based on the 'improved' value i.e. including the value of the house built on the land.

The Brisbane model is fair enough in the suburbs where most blocks have a single house on them, but it means that city dwellers in blocks of flats pay very low rates as the multi-million land value is shared amongst the 100+ apartments in the block.

And to answer Zen's initial question, we paid the asking price in 2004 - it had just been reduced by around 10% as the owners needed a quick committment otherwise they would lose the retirement home package they had signed up for.

Beoz

Have seen the same recently. Seems to be the older generation pumping their retirement funds in property. Older people going at it at auctions, until all is nearly done, then enter the random Chinese man waiting in the wings.

Zen10

And with the cut in rates you've already referred to this just means more money going into property for various reasons. As the economy goes south we can expect to see rates go all the way down to the wire.

Swerv-o

That's fine by me! My mortgage payments are getting smaller and smaller on a monthly basis!


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Zen10

It's good news for me as well, for a number of reasons, but it does mean, more broadly, that the economy is weakening and that could have implications for all of us.

Swerv-o

Yes, it does. I am only contracted until December 6th, so it is possible that it will be a double edged sword for me...


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chris955

We paid about 5% under when we bought in 2001 then the seller knocked another $1000 off after we had agreed to speed things up.
When we sold last year we got roughly 5% less than asking price but its 'value' had increased threefold in that time.

Zen10

Well thanks to all who have contributed so far. Very interesting and helpful. Looks like around 5% is the most common figure. Be interesting to see what happens to property next year when it;s obvious the wheels have come off the economy, although I'm in the camp that says they'll do literally anything to keep prices up like they did in the UK.

EvannTel

Bought 2007 at 100% of asking

Sold 2011 for at most 93% (hard to say as lots of DIY done in difficult market so asking already reduced)

Bought 2011 at 73% of asking.
Should say, that asking was 81% of original sale value 2 years previously. Someone took a bath, a big bath at that

OzSheila

Melbourne auction prices realised are nearly always about 10% over the quoted range. This is what we were told back in 2005 when we were looking and true to form is exactly how our purchase panned out.

KJCherokee

Unless you desperately need the money I would always keep the repayments the same as the interest rate goes down: that way you will knock several years off the loan term. Also if you need a chunk of money in the future (emergency operation, trip to visit sick parents, etc), with most home loans you can redraw your excess payments.

It also gives you a good buffer for when the interest rates go up again.

jackieh23

My thoughts exactly when I read Swerv-o's post. When rates go down, borrowers' should endeavour to maintain the level of repayments pre rate change. It is amazing how quickly equity will increase...

Our neighbour's house was listed on Friday 26 July for offers over $440K, home open Sunday 28th and they had 5 offers, accepting $470K on the Tuesday...

The mid range market here is exceptionally strong and anything going on the market is being snapped up. A duplex pair down the road sold after the first home open too, at the beginning of July for 15% over asking price.

We sold in January 2011 - range $440K - $460K and accepted $450K. We are contemplating purchasing again next year and I am keeping a reasonably close watch to see what houses are listed at and what they are eventually sold for.