Well here on the distant outskirts of Sydney property values are...

Well here on the distant outskirts of Sydney property values are much the same as they were in 2003. There has been no boom or bust in between, just fairly moderate changes.

There is a desperate shortage of rental accomodation, vacancies under 1%, and agents are reporting people are sleeping in cars and caravans because they can't find a rental, perhaps because there has been so little construction in the past 8 years. Properties that rented for $200 a couple of years ago are now renting closer to $300. Although the official figures say yields are 4 - 5%, it is pretty easy for investors to find yields of 6%+. But not many are investing in residential property at the moment.

Residex is forecasting further declines in most states except NSW over the next year. Sounds about right. I think the smart money is buying positive cash flow properties in NSW. And of course resource stocks!