Latest news with #overvalued
News.com.au
16 hours ago
- Business
- News.com.au
Revealed: The suburbs where Aussie house prices are way off the mark
Australia's most undervalued and overvalued suburbs have been revealed, exposing areas where prices have either overshot the mark or remain lower than they should be and are due 'catch up' growth. Research from SuburbData showed most the overvalued and undervalued suburbs had varying history, but they were characterised by recent changes in supply and demand. This was coupled with major price differences between neighbouring areas with comparable housing. SuburbData analyst Jeremy Sheppard said overvalued suburbs offered a higher risk of new homeowners having to wait years to get growth on their investments, while those buying undervalued markets may get imminent equity growth. 'It may take a while till you get any growth on your investment in an overvalued suburb,' he said. 'Usually prices will level out over a few years but buying at the peak of a fast moving market could even mean, in extreme cases, that prices soon fall.' Mr Sheppard said knowing which markets were undervalued or overvalued was important in the current climate given how significant prices had become. Undervalued and overvalued suburbs differed across our major capitals: Melbourne as a whole was declared 'tremendously undervalued' and was due for stronger citywide price growth. Some of the most undervalued pockets of Melbourne included suburbs where prices had been kept down over many years by a slew of investment property sales from landlords exiting the market. Sales turnover has since slowed and the balance of demand and supply has changed – with areas like St Kilda West now among the most undervalued and beginning to pick up again. Whitefox chief executive and The Block judge Marty Fox said the relative affordability, especially the six-figure gap between St Kilda East and neighbouring areas, wouldn't last long. Other undervalued suburbs were Doreen, in the outer north, and Noble Park in the Dandenong area, along with a mix of suburbs in the Hume region and northwest Melbourne. Mr Fox said Melbourne as a whole was bouncing back. 'The gap between what buyers think property is worth and what it should be worth is the widest I've seen in years SYDNEY Prices in Sydney's most 'overvalued' suburbs were up to $250,000 higher than nearby, similar areas – often after years of rampant growth that outpaced the rest of the surrounding market. Such price gaps were unsustainable, according to the SuburbData research, with buyer demand now showing signs of dropping while the supply of available properties was soaring. Areas ranked among the 20 most overvalued Sydney markets were a mix of suburbs spread across the greater city area. They included developing suburbs around the coming Western Sydney airport, along with pandemic-era boom markets like the upper northern beaches and outer suburbs dominated by acreages and semirural properties. The Adelaide suburbs to target for future growth, and where to avoid to reduce the risk of overpaying, were a sharp contrast. The most undervalued, the report highlighted was Thebarton, with a median house value of $837,000 – about $132,000 below its neighbouring suburbs. Oakbank, Broadview, Clovelly Park, Camden Park, Cumberland Park, Brompton, Tonsley, Hove and Lightsview rounded out the top 10 most undervalued. LJ Hooker Mile End/Woodville agent Thanasi Mantopoulos said he felt Thebarton still had plenty of room for growth. 'We've seen houses in neighbouring Mile End and Torrensville now consistently break the $2m mark … the current record in Thebarton is $1.64m for a three bedder.' Vista, in the Tea Tree Gully council area, on the other hand, was identified as SA's most overvalued suburb, ahead of Woodville, Taperoo, Leabrook and Wayville and others. BRISBANE The research showed buyers could save over $400,000 by moving their home searches just a few suburbs away, in some cases. One of the suburbs offering the lowest prices relative to neighbouring areas was Fortitude Valley. Other undervalued suburbs were Alderley, Clayfield, South Brisbane and Hamilton. Areas were deemed undervalued if prices were lower than in neighbouring areas – without a reason explainable by geographic differences, such as a lower lying location or a lack of coastal access. Many of Brisbane's most overvalued suburbs were premium lifestyle suburbs that neighboured locations still undergoing gentrification.
News.com.au
16 hours ago
- Business
- News.com.au
Revealed: Sydney's most overvalued and undervalued suburbs
Explosive property market inflation has created pockets of Sydney where house prices have become 'overvalued' and at risk of soon falling as buyers seek out cheaper, comparable homes elsewhere. This has coincided with the emergence of contrasting city areas where the opposite conditions have emerged: prices are undervalued relative to neighbours, demand is picking up and 'catch up growth' is imminent, new data shows. The SuburbData analysis exposed varying levels of suburb price imbalances when comparing neighbouring areas offering similar houses, amenities and infrastructure. Undervalued suburbs were deemed good areas to buy in because prices could soon grow, while overvalued areas posed risks for new buyers, who were in danger of overcapitalising on their purchases. The research showed prices in the most 'overvalued' suburbs were up to $250,000 higher than nearby, similar areas – often after years of rampant growth that outpaced the rest of the surrounding market. Such price gaps were unsustainable, according to the SuburbData research, with buyer demand now showing signs of dropping while the supply of available properties was rising. These factors pointed to a coming market adjustment that would result in prices stagnating for many years, or even falling, raising risks for new buyers, the study revealed. SuburbData analyst Jeremy Sheppard said a suburb being undervalued or overvalued was down to market cycle timing and the balance of supply and demand, among other things. 'Buyers are continually searching for value for money,' he said. 'One of the big mistakes people make is assuming growth will occur at a consistent rate over many years. 'It doesn't work like that. Real estate moves in cycles. Buyers spot an opportunity to get better value for money in an (undervalued) market and that drives a feeding frenzy. Prices then go up sharply. 'Rises will continue until buyers reach the stage where they no longer see value … It's at that peak when the market is generally overvalued.' Areas ranked among the 20 most overvalued Sydney markets were a mix of suburbs spread across the greater city area. They included developing suburbs around the coming Western Sydney airport, such as Rossmore and Bringelly, which have attracted ample speculative investment over recent years. Overvalued suburbs also included outer suburbs dominated by acreages and semirural properties, such as Mulgoa and Orchard Hills, south of Penrith and Ellis Lane, in the Camden area. Prices in these fringe areas were elevated during the pandemic due to increased buyer demand for spacey properties, but these areas have historically appealed to more niche buyers, with recent indicators of demand beginning to fall. There were also parts of the Pittwater region in Sydney's upper northern beaches deemed overvalued, including Great Mackerel Beach, Whale Beach and Clareville. These too were hot markets during the pandemic and the years that followed, attracting a string of 'lifestyle' buyers wanting more space and quieter coastal settings – only demand has now dropped and property supply is rising, suggesting prices may have peaked. Undervalued suburbs, where growth has been stunted over a few years and conditions have since picked up, included a string of relatively affordable areas around Strathfield and Greater Parramatta. The suburbs were Homebush West, Dundas Valley, Wentworthville, Liberty Grove and Granville, among others. Parts of the south were also considered undervalued, such as Sutherland Shire suburb Jannali and, in the southern Canterbury-Bankstown area, Revesby and Revesby Heights. Buyer's agent Andrew Hancock of My Property Pro has sourced deals for numerous families wanting to purchase in these southern areas and said most were coming from more expensive regions like the inner west. 'There is a perception that there is better value on offer and these buyers often have higher paying jobs and bigger budgets and that's pushing up the prices,' he said. 'An area like Revesby has homes that are a lot cheaper than suburbs further to the south like Kirrawee, but they offer something a bit similar. It is undervalued and these types of areas do catch up.' Other undervalued suburbs were in the inner west, including Campsie, Newtown, Alexandria and Petersham. Adrian Tsavalas, the director of inner west agency Adrian William, said Newtown was particularly good value at the moment. 'It's always been a popular area and it has had various growth spikes in the past but when you compare it to other inner city suburbs like Glebe and Annandale, its excellent value,' he said. 'Units are a really good entry point into the area because they've remained really good value for the past five years.'
Bloomberg
3 days ago
- Business
- Bloomberg
Everyone Says Equities Are Overvalued, So They're Piling In
We're in the unusual situation where fund managers almost uniformly say US stocks are overvalued, yet everyone is piling in. This disconnect, as the S&P 500 Index sets repeated all-time highs, is the market's biggest vulnerability going forward. At the first sign of trouble — for example if tariffs do ultimately lift consumer prices and derail expectations for Federal Reserve interest-rate cuts -- they're liable to sell. And it's a risk the market may have to contend with in the next few months. To get a sense of the latest positioning, look at the most recent Bank of America Global Fund Survey results.
Bloomberg
4 days ago
- Business
- Bloomberg
BofA: Record Number of Investors Find Stocks Overvalued
00:00 Bank of America with its August Global Fund manager survey showing investors are the most bullish since February, with a record 91% calling U.S. stocks overvalued. Joining us now to discuss this and a scholar of Bank of America analysts. Welcome to the program. Let's just talk about that 91%. So a lot of people seem to think many. In fact, the overwhelming majority believe the US stocks are overvalued. How many are. Sure. How many are underway at the moment? Hey, John, look, I mean, clearly, that's that's a very important question to to to our investors and clients, because the valuation and the perception of the global stock market valuation was really a highlight in this month's Global Fund Manager survey, which was not really a decisive survey, not like the survey that came out in April, which was a clear moment to buy of the survey from about December 2024, which was a great moment to to to sell the market. But this month, the highlight was really the perception that global equity markets are overvalued. The highest share of investors saying they think the global equity market is overvalued. Since 1998, when we first starting started asking this this question. The share popped. Even the highs observed during the Internet bubble in 1999 2000, or the everything bubble in 2021. And of course, the perception that global equity markets are very rich, overvalued is driven by the US equity market with here as well. 91% of famous participant saying that they think the US equity market is is overvalued. Definitely valuations are very important for long term equity investors. In fact, that is the one factor that matters when you invest in terms of on on on stocks over the course of a of a ten year period. However, this has not been an element that that caused major concerns because investors continue to rotate towards the US equity market that were very underweight in April. This underweight is being cut progressively and despite the very high perception of of overvaluation, other firms positioning in terms of US equities remain net underweight, which is really a silver lining for US stocks. And so any is the way you see things is that this negative reservoir of pessimism that we can keep feeding on in the months to come, can we continue to see that grind higher? I think, you know, this negative reservoir of pessimism is really what emboldens the bulls right now, because when you look at the results from the infamous survey this month is that the bulls will really focus on the macro pessimism that in fact, in Greece versus where it was in in July, macro sentiment worsened a little bit. But also the bulls refocus focus on the fact that global equity exposure stands below the historical average net. 14% of our famous investors said they were overweight. The global equity market, the historical historical average since 2000 is roughly 25%. So is this based on these two metrics, the bulls will say there is further room to go in terms of positioning. However, there is also some substance to embolden the bear narrative and in particular, the fact that the average farmer's cash level remains at a low 3.9%, which historically has been a strong signal to say that global risk assets are toppy as now is a good time to retreat or hedge your your position.
Yahoo
5 days ago
- Business
- Yahoo
BofA Poll Shows Record Number of Investors Say Stocks Overvalued
(Bloomberg) -- A record share of fund managers see US stocks as too expensive after the sharp rally since April lows, according to a monthly survey by Bank of America Corp. Sunseeking Germans Face Swiss Backlash Over Alpine Holiday Congestion New York Warns of $34 Billion Budget Hole, Biggest Since 2009 Crisis Three Deaths Reported as NYC Legionnaires' Outbreak Spreads A New Stage for the Theater That Gave America Shakespeare in the Park Chicago Schools' Bond Penalty Widens as $734 Million Gap Looms About 91% of participants indicated that American stocks are overvalued, the highest ever proportion in data going back to 2001. While investor allocation to global equities climbed to the highest since February, a net 16% were still underweight the US, the poll showed. Overall sentiment improved to the most bullish in six months, since before President Donald Trump's sweeping tariffs roiled financial markets and stoked worries about a recession. BofA strategist Michael Hartnett said investors now see the lowest probability of a hard landing since January. US stocks have scaled record highs on signs of a better-than-expected corporate earnings season and optimism that the Federal Reserve will lower interest rates as economic growth slows. That's prompted market forecasters including at Citigroup Inc. to turn more optimistic about the S&P 500's trajectory in the second half. Still, some strategists such as BofA's Hartnett have warned the rally risks overheating into a bubble given a potential easing in both monetary policy and financial regulation. The bank's August survey showed cash levels as a percentage of total assets remained at 3.9%, a level that is consistent with a so-called sell signal for stocks. Other highlights from the poll, which was conducted from July 31 to Aug. 7 and canvassed 169 participants with $413 billion in assets: About 68% said a soft landing is the most likely outcome for the global economy in the next 12 months; 22% say no landing, and just 5% predict a hard landing A net 49% say EM stocks are undervalued, most since February 2024 Inflation expectations rose to a three-month high, with a net 18% expecting a higher reading of the global consumer price index Biggest tail risks: trade war triggers global recession (29%), inflation prevents Fed rate cuts (27%), disorderly rise in bond yields (20%), AI equity bubble (14%), dollar debasement (6%) Most crowded trades: long Magnificent Seven (45%), short dollar (23%), long gold (12%) The Game Starts at 8. The Robbery Starts at 8:01 The Pizza Oven Startup With a Plan to Own Every Piece of the Pie Digital Nomads Are Transforming Medellín's Housing It's Only a Matter of Time Until Americans Pay for Trump's Tariffs Russia's Secret War and the Plot to Kill a German CEO ©2025 Bloomberg L.P.
