We are talking about Sydney because Australia`s future is in Sydney. Google did not consider Melbourne`s generous conditions. When the construction plan for its headquarters was destroyed twice by human factors in government, New York Province, Google still bought TV Station No. 7 to save the country. I also confirmed that Sydney is Australia`s economic leader, and that money is the only way to save the country. Business and the future are here.
Sydney`s real estate is now going through a very low time, with all the headlines reporting that Sydney`s houses have fallen, the Royal Commission of Inquiry repeatedly investigating banking wrongdoing, and overseas revenues being scrapped. Loan industry has been rectified, loans rejected by banks have become a new normal. Many developers to promote the project of the real estate companies have lost people, the performance of the phenomenon of sharp decline. For ordinary investors, banks` policy of requiring both principal and interest rates to be repaid has also tightened cash flows.
Waiting for a few more years, waiting for leaks and future housing prices to decline and slow down has become everyone`s tacit consensus. Can I still buy a Sydney house? Can I still buy a high-priced house? How should we invest in the future? I will not, like some employees, insist on telling you that the house will rise in the future and just buy it. Because hard-mouthed, chanting slogans, fighting chicken blood can not solve the problem, nor build confidence, we still use data and history to guide our next action, as we did in the last article.
According to historical data on mid-level prices in Sydney, home prices have been rising and falling, with Year Nineteen Eighty-nine buyers in Sydney property history released only in 1996, and buyers in 2004 and 2010. The sea is not flat, the house long-term rise, but short-term rise and fall.
The second thing this chart tells us is that when Sydney fell, other cities were not alone, and there was also a decline, so anything that tells you about the real estate cycle theory, investing in different regions in different cycles, When Sydney fell, it was SB, that bought Brisbane because of the synchronism of the gains in major cities, and Sydney was the leader in the gains.
Third, real estate has a long-term upward trend in terms of population and economic growth, and short-term adjustments are unpredictable, you can`t predict when they happen, and you can`t predict when they end. It is also impossible to predict how long the intermediate cycle will be. There has been no adjustment in the decade 1971-1981.
1982-Year Nineteen Eighty-nine, with only two years of adjustment in the middle. If you just bought a house in Year Nineteen Eighty-nine,
Well, your release time was in 1996, but if you bought the house in 1988, the house price was almost unchanged for you, and it was almost rising all the way.
This formed the core of my own strategy:
First, real estate is only available in big cities where populations are flowing, with Brisbane and Perth losing completely to Sydney and Melbourne.
The second point is that as long as you have the ability, any time is a good time to enter the market, the best way to not want to buy at the highest point is not to try to predict the cycle and increase of house prices, but to buy one a year, sharing costs, because no one can predict the future. The Year Nineteen Eighty-nine at the turning point of the Australian housing market and 2004 were both very flat years, without any major economic events, the year in which major events occurred, such as the US stock market crash in 1987 and the financial crisis of 2008. The price of the house is rising instead. The reality is that prices always fall or rise first, and then the media try to find the trigger for events from outside, giving reasons for so-called price movements.
Third, in order to maximize real estate returns, long-term ownership is the right rule, from $18700 in Sydney in 1970 to $1,124,000 in 2016,
Property has risen 60-fold in 46 years, which does not include rent growth. If we assume that the rental rate at that time was 5%, and now it`s 3.5%, that`s from $935 a year.
Rent returns of $39340 a year in 2016, a 42-fold increase.
My final conclusion is that long-term ownership of real estate is the most profitable way to return profits, and I think that all short-term real estate buying and selling strategies, such as decoration, development and distribution, provide you with sufficient working capital, Help you buy more real estate and hold longer cycles, because that is the real wealth, the cornerstone of the industry.
While we are still bullish on the Sydney market, the next step is to pick out from hundreds of areas of Sydney what can be invested in the big black horse, which is called a strong segment in the stock market. In the first piece of Sydney Real Estate Pride and Prejudice, I try to make a point with you that the average person`s understanding of real estate is wrong, right, all wrong.
We often think that if we want to buy a good district, we will buy a hospital, a subway and a shopping mall, which is close to the city. The house there must be the most expensive, and the reality is that when we take the Northshore,
Subway lines do case studies. That`s not the case at all. On this train line, it`s a little further away from the City, with fewer areas, such as Killara, Roseville.
The middle price is even higher than the complete Chatwood. The same thing happens on other train lines, where prices in some areas are directly against the mid-range prices of the previous areas of the train line, and are very arrogant. The reason for this is because people have their own innate prejudices, and the old aborigines of the city see their reputation, but the new immigrants look at the value of money, the distance, and the matching, and they will eventually become subversive to the region. Completely refresh people`s impression of this area, this is our choice of plate methods and principles, using other people`s wrong impressions and perceptions, to buy the cheapest, the most cost-effective areas.
In the last post, many people questioned this point of view, such as the following online message
Many people have similar questions, and think that the analysis of the mid-price is too subjective. House still depends on factors such as buildings, plots, development potential, and so on. I agree with this point. But from a macro point of view, you can`t find a better way to analyze and compare regions than mid-price. For example, this friend said that the Chatwood plot is generally too small, probably because he hasn`t paid much attention to the real estate for too long. Let me give you a few recent examples.
The house covers an area of 750 square meters. Take a look at the next case. It`s all recent.
The house covers an area of 834 square meters
As for the house that the addressee said, I also found it. The address should be 11 Claude street chatswood.
Let`s not say that this house is a double brick plus luxury decoration, the location of the house is an extreme location, whether walking to the shopping center or train station, is within a kilometer. So this example does not represent the average of the entire Chatswood.
So we still use the House mid-price analysis in this analysis, which is the simplest and most accurate analysis method we can find so far.
Our analysis is mainly based on two data. The first is that our Sydney regions mark the House prices of these areas in 2009, and I still use the data from realestate.com.au. Second, we will mark the mid-price growth rate over the eight-year period from 2009 to 2017 at the top of each region. As shown below
Chatswood`s mid-2009 price was 1,075,000, and we will mark 1075k on the map, compared with 2,475,000,2475 / 1075 and 230 percent growth for the chatswood in 2017.
As a result of the 2008 economic crisis, lending policies tightened sharply in 2009 until 2012, when interest rates fell, and now they tighten again in 2016, which I personally see as the beginning and end of a credit cycle. Now that our market is back in the same state as it was in 2009, we might as well look at which regions have outperformed the market from 2009 to now, and what reference does it have for us today.
In the eight years from 2009 to 2017, 90% of the regions doubled. As a professional property investor, I have read the vast majority of real estate investment books on the market.
1. Buy a real estate at a medium price because everyone can afford it.
2. Buying rich areas is a place where locals live, because the next wave of rich people will pick up.
3. Buy the Chinese district with train station, the high price depends on the Chinese.
4. Buy the lowest-priced areas of the poor, high rent returns, the lower the price is easier to rise.
5. Buy the urban-rural fringe, gamble on the government development plan
6. It is convenient for people to go to work if they buy something close to the city centre.
Sydney`s House was priced at 544,000 at that time. If you invest in real estate, which one do you think is the right one? Choose your approved point of view, now we reveal the answer, congratulations, all wrong.
The growth rate is 200% (double) pass, the growth rate is more than 225% is excellent, the following contestants are finalists
North:
Chatswood
1075k（230%）， Wahroonga 940k（ 229%）， Asquith 538k（258%），Dee Why 744k
(229%)， Ryde 725k（240%）, West Ryde 688k (253%), Epping 792K(229%),
Gladesville 915k( 229%), North Ryde 753k(226%),Longueville 2075k
(232%)，Hornsby590K( 225%)， cherrybrook655k （225%），Thornleigh
602K（225%），Carlingford 616K(300%) 。
North District champion: Carlingford 300%, second runner-up Asquith 258%,
North West:
Dural
700k（234%），bella vista 742K（235%）， ST mary 250K（239%）， Penrith
310k（230%）， Kenthurst 1060K（248%）， westmead 492K （288%）， Parramatta490k（
266%）
Northwest value-added champion Westmead-288%, paramatta (266%)
Sector South:
Riverwood
480k(229%)，Rockdale 550k(245%), Caringbah South 750k（ 230%）， Arncliffe
549K(243%),Kogarah 666k(225%)， Banksia 512k（237%）
Growth champion Rockdale-245%, Arncliffe 549K (243%)
Narcy:
Ashfield
690K （229%），Burwood 900k （246%）， Homebush 686K (324%), Campsie 570k
(244%)， Lidcombe 525K （252%）, Marrickville 640k ( 234%), Erskineville
625K (228%), Belfield 605k(240%),concord 900k(228%),
Cabarita1272k(237%), Russell 995k (233%)，Lewisham 640K（266%），Kingsgrove
600k（225%）
Growth champion Homebush 324%, runner-up Lewisham 266%
Southwest:
Villawood
345K （237%）, Macquarie field(233%), moreebank 363K (259%), Liverpool
350k(234%) Minto 272K (244%) , Campbeltown 275K (239%), Warrick farm
295k(255%)
Rezone: Austral 1060K (373%), Rossmore 1105K (311%), Middleton Grange260k (307%)
Growth champion: Moreebank 259%, Warrick farm 255%
Eastern region:
North
Bondi 1300k （247%）， Coogee1277K（243%）， Rosebrrry 742K（236%）， Botany
672K（226%）， Chifley 765k（236%）， Eastlake680K（250%）Surry Hill(225%)
Growth champion Eastlake 250%, North Bondi 247%
Let`s take a look at the selection criteria that people have just made:
1. Buy a real estate at a medium price because everyone can afford it.
With the exception of the mid-market price of Asiquith, the mid-market price of all houses exceeds that of Sydney by more than 20%. The mid-price of the Chatswood has already doubled that of Sydney and is still out of the market average, especially in Nexi.
2. Buying rich areas is a place where locals live, because the next wave of rich people will pick up.
Northwood 2480k (123%), Vaucluse 3693k (126%) is the worst in the middle price. Don`t you believe me, don`t you tell me there are tens of millions of photos of all the luxury houses there? Let me show you an example of Australia`s former finance minister.
The house was bought in 3.5 million in 2004 and sold for more than 7.5 million in 2018 and less than 8 million in 2018. It has only more than doubled in 14 years. How do you feel?
3. Buy the Chinese district with train station, the high price depends on the Chinese.
Hurstville is the most concentrated Chinese area, 733K (222%) has no excess returns, and Eastwood does not have 681K (213%).
4. Buy the lowest-priced areas of the poor, with high rental returns, the lower the price, the easier it is to go up.
Blacktown340K (218%), mount druitt 316k (221%), these poor areas also did not beat the market.
5. Buy the urban-rural fringe, gamble on the government development plan
A lot of rural areas are planned for residential use, but how do you know the place you buy can be planned into a residential area by government, for example, if you buy it in Emu plain383k (187%), nothing happens and you lose the market?
6. Buy people close to the city center. It`s convenient for people to work.
If the city adds value, how do you explain the St Mary growth rate at 239%? Penrith by 230% and campbeltown by 239%?
You can support any of these theories by finding the results you want, so many brainwashing lectures come up with one-sided data to support one-sidedness. But you want to be exclusive, deny others, I`m sorry, no way, poor areas are rising, rich areas are also rising, near the city center, the remote areas are also rising.
Objectively speaking, the following phenomena have occurred in these star regions:
1. There has been a massive density increase in the area, and many House have been changed by government to be able to build apartments, such as Lidcome, by changing the nature of the land.
Homebush, Roseberry,lewisham,Hornsby sum
Price increases in Asquith, areas are likely to be fueled by acquisitions by developers. These regional prices are not the same, the distance from the city is not the same, the local matching is not the same, so it is difficult to see any law, Rezone can not be met.
2. The region is planned as a local employment and development centre, such as the Science and Technology Park in North Ryde, the new industrial park in small CBD, Burwood, Bella vista in Chatswood, and the new airport in Liverpool
These two are difficult, but it`s not impossible to look back. I found a few maps in Sydney government`s 2005 urban planning manual, 2005 (City of Cities: A Plan for Sydney`s Future), which can be used for reference.
This is about the infrastructure map that government is working on, so let`s take a look at a map of government`s urban employment development.
Several areas with good gains were named by government in 2005.
The third and most important thing I think is that these areas reflect the arrogance and prejudice of Sydney`s real estate, which are inexplicably cheaper and cost-effective than the surrounding areas.
For example, closer to City, with a more complete set of Dee why mid-price 794K, even farther than it comes with fewer Warriewood 809k, Mona Vale 805k cheap, I just want to ask why?
In 2009, the Chatwood 1075k was even more expensive than the next lane cove 1160k, and there was a 40 percent price gap with its next two-stop Linfield.
There are train stations, there are shopping malls, the West Ryde 688k is even cheaper than the next Denistone 805k, but also cheaper than the Ryde 725k without a train station. With train stations, hospitals and universities, the westmead 492k is even cheaper than the north rock 605k, which has nothing at all.
The east side Eastlake is priced at 680 k. it`s only half the 1129k of the side area kingsford, and Erskineville is even farther away than it`s Dulwich
Hill costs 690k. With complete support, the campbeltown 275k of the train station is not even further away, and the more desolate Camden costs 380k.
And there`s no neighbor, Leumeah..
Buffett said that other people are greedy, he is afraid, he is greedy, and he is greedy. In fact, what everyone understands is that ordinary people price assets according to their personal emotions and preferences, and our professional investors only look at the value of the region itself. We know how to use the irrational sentiment of the market to buy undervalued assets, waiting for the return of value.
The old money no longer ridicule our new expensive do not understand your taste, can not understand the dignity of the East side, there is no aristocratic tradition. I`m sorry, your reputation, whether it`s the lot, the purple pot, the art, the red wine, or the golf, we don`t pick up this plate, we turn over the table and come back, just like Silicon Valley and Wall Street are on a par with each other. We need to define what is truly noble and stylish by our values, and you can continue with your arrogance and prejudice.
