Sydney property prices have gone vertical

Sydney property prices continue to soar into the stratosphere.

According to CoreLogic’s daily dwelling values index, Sydney dwelling values have already surged an extraordinary 10.6% this calendar year with prices already up 1.2% in May:

Sydney dwelling values

Sydney dwelling values have gone almost vertical!

Price momentum also appears to be growing. Quarterly dwelling value growth is running at 9.3%, which is the strongest growth since 1988:

Sydney quarterly dwelling values growth

Sydney’s quarterly dwelling values growth is the strongest in 33 years.

The strong momentum is set to continue. Sydney continues to record final auction clearance rates above 80%, which traditionally correlates strongly with prices:

Sydney auction clearance rates

Sydney’s auction market remains red hot.

Sydney mortgage growth is also booming:

Sydney mortgage growth vs prices

Sydney’s mortgage boom signals strong property price growth.

Based on this data and the current momentum in the market, Sydney could record dwelling value growth of 25% or more this calendar year.

Unconventional Economist

Comments

      • happy valleyMEMBER

        We need you back – it looks like inflation is about to d a SHTF in the US?

        • We are headed into a decade similar to 1970/80s of very high inflation high interest rates …..it’s not transitory……there is a major crisis in H2, that will push home loan rates out to 7,8,9% as credit spreads blow out, but that will settle down after the panic subsides but they won’t be 2%, it’ll be some sort of nationalisation merger etc similar to northern rock I think it was……think RBA and Gov might take ownership of the banks to stabilise our financial system

          As I’ve said we are months away ……..from a world wide financial crisis that could be 50 times the size of 08/09…….

          Banks around the world collapsing including our big 4……I’m not sure what they’ll do…

          This is going to be so big in magnitude they will definitely have to close all banks worldwide simultaneously to try and contain the speed of the derivatives unwinding….

          They’ll have to close the stock exchanges and probably freeze all financial markets

          They’ll switch off electronic online transfers

          They’ll bring in the army …….you’ll see army helicopters dropping food supplies into parks, they’ll set up huge food tents …..

          Shops and supermarkets will have to be boarded up from looting…….then they’ll start food rationing

          Most companies will be shut ….because there will be no availability to pay people …..credit just frozen

          How long does it take….my guess a few months …..they may allow withdrawals of cash from ATM with limits

          You’d be wise skipping one auction and go to supermarket/Costco and stack up on essentials, make sure you have cash ….small notes $5, $10, 20s and $1 & $ coins stacked away ….month or 2s food and I’d say 6 months of toilet paper…..etc…..

          • No way we get the sort of inflation from 70s, that was all about booming demographics & shortages, the exact opposite of what we have now. The underlying force is deflation now, it’ll reestablish itself after all this restocking & bottlenecks are sorted out this year. The banks will then be back to fighting deflation. I have little doubt there will be a financial event, but could still be decades away, who knows how long it can go, in fact an event is probably wrong term, I think we’ll probably all turn Japanese and just limp along. One of the being unknowns is Xi. When China enters it’s lost decades & people realise they will not get as rich as they thought they are going to pressure the government, there is a good chance the nationalistic fervour turns outwards rather than inwards, then all bets are off.

      • reusachtigeMEMBER

        Because of your major bout of embarrásment hey bloke? (Spambot is ruining this place)

      • If you’re wondering where I am, I’ll be biting Reus’ pillow at one of his parties.

    • happy valleyMEMBER

      And Captain Phil and Captain Wayne are rubbing their hands in glee as their Randwick and Pymble mansion prices pass the moon.

      Learning from the ScoMo playbook on what he tells us his job is, it is not their job to control house prices.

      Winners are grinners.

      • You wait,,,,..they’ll be the 2 dragged into the parliamentary enquiry and blamed

        • happy valleyMEMBER

          What for a 2-hour limp lettuce chat with Tim Wilson and other LNP shielders – what’s to explain, the 2 amigos used all care but have no responsibility because control of house prices is not their job, just as holding a hose is not ScoMo’s job but photo ops are?

    • This is the most ridiculous bubble I have ever seen – prices in western victoria have hit an average of $500k, in a s town like Robinvale here is a stock standard house that would be worth around $100-150k in the US in any moderate sized city asking $650,000.00 its completely and utterly insane what is happening.

      https://www.domain.com.au/robinvale-vic-3549-2015602090

      This country is seriously just going to collapse.

      Combined government debt of states and fends just hit around $1.8 Trillion.

      Private household debt is off the charts at well over $2 Trillion last year – this year !!!?????

      Australia has 8.3 Million households – that’s close to $500k owed by every single household in Australia.

      Next global financial crisis – we are in the middle of it right now for those wondering – will rock this country to its foundations. Madness.

      • We aren’t in the crisis yet…….you’ll know when we are

        I don’t believe the bull market is over…….stock market has a long way higher to go, AUD a lot higher, commodities much higher and DXY still lower……it’s actually getting harder for me to see, but I don’t believe the bull run is over…….bubbles run much further than anyone thinks ……and they run faster and harder the higher they go ….think this is just a correction & consolidation

        Why do these bubbles run so far

        I think people are just fundamentally greedy…..

        • Disagree.

          We were many months into the financial crisis of 2008/2009, maybe even a year before the markets responded.

          The financial crisis has happened – hence the stimulus, hence the QE, hence the debt – we are just waiting for shock wave and EMP to arrive.

          • Think it’s just volatility and panic which I guess you could say are early warning signs but we have a lot higher to go yet,,…..

            When it comes it’s more than a shock wave

            The global banking system and financial system are going to collapse

            Sharemarkets aren’t far from bottoming out …….before higher again

      • BA
        I think what I’m hearing in Sydney is the most insane I’ve ever heard
        It’s absolutely mind blowing those absolute dumps you guys are showing me in Sydney and what they are selling for
        And the stamp duty people are paying …..

        I think people must be in a trance

        Do these people know these dumps, they won’t be able to build or renovate due to material shortages and price increases

        They’ll be living in the dump

        If you are going to pay these prices buy a really fancy premium home on a small block….that you don’t need to spend a cent

        • Have you met the average Australian. As wrong and demeaning, arrogant, whatever as it is to say – almost all of them are genuinely really stupid people.

          The level of self absurdness coupled with their stupidity is a recipe for disaster – they are so totally clueless it hurts.

          • Not correct. They are not stupid people. They want a house. If they can get a loan they follow the herd which gives them comfort. They aren’t primarily investors. Banks are meant to be risk experts and they need to be responsible when things get so far removed from basic metrics of an asset’s actual income producing potential.

            Financializing a basic need might make some people rich (banks mostly) but it pretty much pure evil in humanitarian terms and benefits nobody productivity-wise.

            Maybe the herd is 90% of the population. 5% use their education and reasoning combined with want of of house and don’t buy, they call themselves smart. The other 5% buy like crazy, 4% are ponzi people and 1% know they are backed by the gov and are willing to punt on this.

            After so many years on this blog, the 5% with book smarts (myself included) really need to drop the superiority complex. The proof is in the pudding. We are poor and the rest are rich. End of story. Therefore, we are NOT smart investors. Period.

          • Yeh, point taken but most on this blog are here to smarten up and some come to help understand their investments and get them to perform better.

            From this point of view there are a lot of people you are calling stupid with multi-million dollar assets now and others here with a pocket full of dust and a feeling of superiority. Strange.

            So my point actually is “Stupid is as stupid does” and is realised through the fruits of their actions not by an academic yardstick in real life anyway, some people prefer academia so many comfortable cardigans to be worn and enjoyed.

        • happy valleyMEMBER

          Gladys and the rest of the LNP are salivating at the stamp duty rolling in, which offers heaps of opportunity for pork barreling?

      • Now what a minute. Robinvale, home to an ok golf course. And Robinvale winery – are they still selling that zany strawberry fizzy drink, man I loved that cellar door.

        It’s close to Hattah NP, Pink Lakes, Ouyen and its famous pies, Manang and it’s famous – well, um – sandscrape golf course? The lakes just north, gateway to some epic inland camping. The longest bar in the world at the Mildura Workers Club.

        Anyway, I digress, who is Black Adder? It’s not Totes, it’s not Dudley (HAHAHAHALOLOL I don’t get why he bothers if he hates Oz so much, must have lots of spare time)….

        Who could it be now?
        Who could it be now?

        • To be honest with some of the justifications I have heard for OZ property prices – a long bar seems entirely reasonable for a 3/4 Million 20 year old A.V. Jennings in the desert.

        • Lord DudleyMEMBER

          I pay attention to Oz economics because watching Australia turn into the next Argentina is like watching a slow motion train-wreck, where the train is carrying alternating cars of cattle and gasoline. It would have been much better not to get to this situation in the first place, but now that the train is speeding towards the collapsed bridge, there’s no stopping it! Nothing to do but watch. Ha ha!

          Also, I applaud Sydney’s epic increase in house prices over their even more epic house prices. You know your economy is strong when your young people can’t afford to buy shelter and no-one can afford to make or design anything there!

          • If “difficulty obtaining shelter” is a guide to richness, then indeed Sydney is one of the richest places on earth.

          • happy valleyMEMBER

            “I pay attention to Oz economics”

            A very simple economics topic – houses and holes.

  1. Frank DrebinMEMBER

    I thought no-one wanted to live in the major urban centres like Sydney because of da Cororo ?!.

  2. Niall de Santos

    Looked at another way, the value of our dollar is just dropping, it’s just asset price inflation because of money printing and artificially low rates.

    The only way the government can ever pay back its debt now is by inflating it away.

    • Jumping jack flash

      “The only way the government can ever pay back its debt now is by inflating it away.”

      What do you think everyone is trying to do lately? It is obvious.

      Scomo missed the boat. We have high house prices but traditionally house prices translate poorly into wage increases, and wage increases are what matters, hence the focus on CPI by everyone lately.

      If we get any CPI it’ll be a miracle after Scomos stimulus fumble

      • We have some of the highest wages in the word – because of house prices. So, quite the opposite.

        And inflation is not just a consequence of domestic money supply – its not the 1970’s – we live in a world where our domestic prices are set by global influences – lumbar, steel, copper, corn, beef, wheat, energy – its all set at the global level.

        Inflation is already absolutely everywhere – its just being called “transient” like some sort of hobbo who needs to just move on.

        Never mind the fact that the hobbo is sitting on skid row, there are thousands of them, stinking up the street, shooting meth and everyone is fleeing akimbo.

      • Jumping jack flash

        It will be deflationary as soon as the initial exuberance wears off.
        Debt isnt free.

        It is what happened by 2019 after the debt surge of 2015 failed to budge CPI due to the government running the CPi suppression campaign that should have been retired by 2010 except nobody in charge knew anything about anything that they were supposed to do so they just continued policy from decades ago that was only brought in as a desperate measure based on conditions decades ago.

      • Maybe because inflation is not just set by increasing the domestic money supply – this is a very 1970’s understanding, see my post above.

  3. “Sydney’s quarterly dwelling values growth is the strongest in 33 years”
    Tonight we gonna party like it’s 1989 !

    • ErmingtonPlumbingMEMBER

      The increases between 86 and 88 was much higher in Sydney and the reason why people just kept borrowing inspite of rocketing interest rates.

  4. Jumping jack flash

    Spend the super money! Leverage it into colossal debt piles.

    Once its gone its gone, only the debt remains and debt isn’t free like super money was.

    The important thing was to lift CPI, to lift wages, to expand the debt capacity so the debt can grow to infinity and beyond, powered by debt growth itself, feeding back into CPI and then wages.

    But no, we will probably not achieve this now.

    • CPI is now squeezed install a very narrow Goldilocks band, too cool & we get the current situation, too warm and we blow up hundreds of thousands of households who won’t be able to pay the hornier rates.

  5. There are so many things that I find extraordinary

    I can’t believe people are so stupid,,,,,100s at some auctions, paying the most insane prices in a complete desperation……the fixed rate home loan is 2% approximately and variable 2.5% and inflation is out of control……we are months away from aggressive interest rate hikes …..put aside my view that interest rates will blow out to 10% on bank funding costs in the greatest financial crisis ever Sept/Oct/Nov into Xmas) ……even without that interest rates will go from 2 and 2.5 to 4 and 4.5% by end of year

    I wouldn’t be surprised to see bond yields US 10 year back to 1.20/30% here first, as market is extreme short and Aussie banks will lower fixed rates again first and we have one more round of insanity

    People love buying at the top and selling at the low……people just feel comfortable following the crowd, thst psychological phenomenon will never change

    This is all going to end in absolute 😭

    Honestly if you can’t all see what I’ve been saying now,…..

    It’s so clear and obvious I can’t even be bothered writing it…..

    • Jumping jack flash

      ” the greatest financial crisis ever Sept/Oct/Nov into Xmas”

      Once the momentum stops all that will be left is the cost of the debt. It will suck everything out of the system.

      Their only hope was to inflate faster than the interest rate, and interest rates are not 0.1%, not even 2% just because the cheapest mortgage you can get is around that price. No, interest rates are closer to 5% generally speaking.

      Imagine running the CPI at 6% to counter that? It is what will need to happen to avert total collapse. Will they have the cajones to do it?

      • Yes you are correct, they will print like mad but inflation will just keep ramping higher ……they will stabilise the system but we are going to have to live with higher interest rates and higher inflation

        I said to you guys a few months back CBs are now trapped into a corner ……the more QE, the higher the inflation…

        • Jumping jack flash

          “the more QE, the higher the inflation”

          The higher the inflation *required* to counter the cost of QE.
          QE is just debt.

          Debt is dead weight, and completely unnecessary in the scheme of things, but made completely vital for everyone through the banks’ sleight of hand and the fact they were put in charge.

          The only way the debt doesn’t crush everything is by paying for itself, in part or full, through its own growth. And that’s where QE steps in, but at the end of the day it is just debt, and debt needs to be serviced.

          If they ran the economy at 6% CPI, then I’m sure that would go a ways to helping expand debt to stave off the inevitable. And this is what they’re going to try to do over the next months in my opinion. It certainly looked that way to me when Scomo announced 600billion stimulus (the amount of missing debt accrued over the past decade), and the US floated the idea of a multi-trillion dollar bailout. I mean, that’s just ludicrous.

          As interest rates increase, and they may indeed as a result, then that just means the inflation target needs to be set higher to counter the drag of the interest on the economy.

          Who will squeal first? I don’t think anyone will this time. Last time someone blinked we got 2008, and a “recovery” that had taken 11 years with no end in sight. Fortunately a global pandemic finally gave them the excuse they needed to have a crack at fixing things for once and for all, and they didn’t need to fabricate a war or anything like that, at least not yet.

    • US markets are capitulating – I can’t find anything that hasn’t tanked by around 2-3% overnight.

      Wait – sorry – 10yr Bonds went up 5%

      Oh, and of course Game Stop with all its margin calls.

      Lololololol!!!

    • It really appears that only the US is seeing inflation. What is happening over there is pretty unique. So many things are out of wack causing distortions. I dont think you will see australia raise rates at all but the US might and thats going to put pressure on funding cost here. The RBA will keep the TFF and YCC programs running.

      • FUDINTHENUDMEMBER

        Will be interesting to hear their justification for extending the tff when apparently the property market is great and everything’s all apples..

    • Ronin8317MEMBER

      2.5% is too high, you can get variable home loan interest rate with a ‘1’ in front now.

      • Current RMBS class A rates are 86bps. Tight margins with rates that low.
        Just looking at Pepper recent RMBS:
        Average loan size – 455k
        Average LTV – 71.9 with 60% above 80
        30% of loan are IO
        27% self employed
        15% loans are not income verified
        46% of loans are investors
        This is prime….

        • Ronin8317MEMBER

          I don’t care what they label it : Pepper RMBS is not ‘prime’ by a long shot.

        • Holiday In ScomodiaMEMBER

          @matchbox – Can you please show me where we can find these? TIA.

  6. pfh007.comMEMBER

    Three cheers for the good ship QE, ZIRP, TFF and all the loonies who sail with her!

      • I said-a hip, hop, the hippie, the hippie
        To the hip hip hop-a you don’t stop the rock
        It to the bang-bang boogie, say up jump the boogie
        To the rhythm of the boogie, the beat

        • VicDynoMEMBER

          That was the old lady singing, the big problem is the fat lady is getting warmed up!

  7. I haven’t been to a single Sydney auction (inner city, innner west) where the final price wasn’t 20%-30% higher than the guide (yes guides are crap…. but some have been based on mid 2020 pricing and they are still 25% higher than that).

    • The exact thing happened in 88/89 and also in 2007 …..that’s in Melb I know of
      Exact same euphoria and price action

    • Strangely i see mixed results in the east. You could argue that the east is already expensive though.

  8. Vertical house prices brought to you by the LNP, more of their misdirected spending the superior economic managers!
    (needed more long term plans for a diverse & innovative & green energy future, not so much short term win the election type stuff, though we do need some of that),

  9. These headlines are starting to read like they are straight out of bcnich’s predictions from just a few months ago.