House Prices: Sydney Australia vs. Vancouver BC
A lot has been made recently of this article in the australian press reporting on a house in Sydney selling for 42 percent less than it sold for three years ago. Housing market bears are quick to point to this article as evidence that “yes, actually real estate prices DO go down, sometimes drastically”, while people more bullish on the Vancouver market point to the fact that “this is only one house out of many and the real decline in house values overall has been closer to 15 percent or so, besides vancouver is different because the olympics are coming and I’ll sell just before the crash anyways”.
But I say you’re BOTH wrong, and you’re not looking at the big picture. You’re forgetting one very important fact, and that is that Syndey Australia is on the other side of the world from us. This point is illustrated above and is the cause of a common but major misunderstanding regarding australian housing market data. First off lets look at a graph of that house price:
Looks bad doesn’t it? You might look at that price drop and get a bit freaked out about the possibility of prices dropping in Vancouver just after you buy that shiny new $400k condo right? But that feeling is caused by one common amateur mistake- you are failing to make hemispere adjustments to that data. Australia is on the other side of the earth, which is why we refer to it as ‘down under’. Before you attempt to interpret any Australian real estate market data you need to make one major adjustment, like this:
There! That looks a lot better doesn’t it? Look at that rise- It’s bold, steady and strong. Just like the Vancouver market!
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August 24th, 2006 at 10:45 pm
August 24th, 2006 at 10:48 pm
August 24th, 2006 at 11:56 pm
August 25th, 2006 at 8:34 am
What was I thinking?
August 25th, 2006 at 8:44 am
August 25th, 2006 at 1:49 pm
August 25th, 2006 at 2:04 pm
thank you, thank you, don’t forget to tip your waitress.
Hey freako, do you ever sleep?!? you seem to be all over the blog-o-sphere 24/7. How do you do that?
August 25th, 2006 at 2:23 pm
August 25th, 2006 at 2:32 pm
Uh, nevermind.
August 25th, 2006 at 2:53 pm
No one can tell you if or when there will be a correction, but we’ve had two years of price increases and even realtors are expecting a correction in the condo market.
August 25th, 2006 at 3:17 pm
August 25th, 2006 at 4:49 pm
I am considering it for, what I thought, obvious reasons. Those are: 1) the market getting away on me and (2)we are seeing signs of a ‘correction’ but will there be a significant change in prices? For those reasons I am debating the purchase. FYI - it’s been on the market for almost 2 months. Units in this particular building do not stay on the market for over 2-3 weeks.
1) The market got away on you (all of us actually) two years ago…
2) The correction has barely started. Next spring you can probably get that place for 225K, and next fall, for 150K.
Try offering them 200K - along with the links to this site, VHB, AFB, and a few others.
I am getting tempted to start making offers on things at 50% of asking price - just to give these optimists a heads-up to what is coming.
If that place has been sitting for a couple of months, don’t even think about it. Make an offer for at least 10% off asking, and tell them that your next offer will be 20% off, and so on.
August 25th, 2006 at 8:30 pm
August 25th, 2006 at 8:33 pm
August 25th, 2006 at 8:50 pm
The reversing of the poles doesn’t change the nature of my argument, one of us is still upside down in relation to the other.. not to mention look at this bright side: If our market crashes AND the poles flip all of our graphs will be upside down so they’ll go up again! hoo-ray for the power of nonsensical positive thought!
August 27th, 2006 at 4:27 pm
Cheers!
August 27th, 2006 at 11:40 pm
August 28th, 2006 at 12:43 am
August 29th, 2006 at 9:29 pm