Society/Culture Australian Property Prices to Crash?

[CheapCharlie]

Prepare contingency plans': OECD warns Coalition government on falling house prices
The Australian economy could be dragged down by a house price crash so widespread the federal government would have to prop up some of the nation's biggest banks, the OECD has warned.

In a major departure from its past assessments of the Australian economy, the Paris-based think tank has cautioned the Morrison government to start planning now for a house-price induced downward spiral that would end the nation's unparalleled run of growth.

 

[EasternTiger]

Might be a good election to lose.

Let the Labor party bear the brunt.

 

[M Malice]

This will be good for smart operators.

My son and his wife have been holding off getting into the home ownership lifelong debt burden, maybe this will be their chance as well.

 

[Espe]

The Aus housing market has nearly all the exact indicators of foreign housing downturns.

Liar loans
sub-prime loans (in our case, interest only)
Foreign investors pulling out
"Our market is different" "house prices only ever go up" bullshit
Ever increasing mortgage stress
Aus household debt among the highest in the world.
Already low interest rates

The only difference is that it will be coming from the middle/upper class vs starting from the bottom.

The dominoes are set. You can already see a huge amount of for sale signs around the suburbs with the listing to sale time getting longer and longer.

 

[The Edukator]

why the the doomsday spruikers never mention immigration levels?

 

[Seeds]

Prepare contingency plans': OECD warns Coalition government on falling house prices
The Australian economy could be dragged down by a house price crash so widespread the federal government would have to prop up some of the nation's biggest banks, the OECD has warned.

In a major departure from its past assessments of the Australian economy, the Paris-based think tank has cautioned the Morrison government to start planning now for a house-price induced downward spiral that would end the nation's unparalleled run of growth.

Lets hope so. 50 percent please.

 

[Seeds]

why the the doomsday spruikers never mention immigration levels?

Cos immigrants help boost prices. Not lower them.

Foreign investors can cause the bubble to burst cos they can pull their money out. But immigrants support both house prices and boost rental yields.

 

[Seeds]

The Aus housing market has nearly all the exact indicators of foreign housing downturns.

Liar loans
sub-prime loans (in our case, interest only)
Foreign investors pulling out
"Our market is different" "house prices only ever go up" bullshit
Ever increasing mortgage stress
Aus household debt among the highest in the world.
Already low interest rates

The only difference is that it will be coming from the middle/upper class vs starting from the bottom.

The dominoes are set. You can already see a huge amount of for sale signs around the suburbs with the listing to sale time getting longer and longer.

Yep. The only thing that could possibly stop it is a massive QE program. The Rba is gearing up.

Whatever happens the australian dollar is going to crash.

 

[Espe]

why the the doomsday spruikers never mention immigration levels?

Do you honestly believe the current high immigration levels are because we are just such a nice accommodating country?

By the looks it, whatever government is going to get in will be lowering immigration. Again, puting more pressure downwards. So what's your point?

I love how any criticism of the housing market you're a 'doomsdayer'. I personally don't want to crash as out economy is will be up s**t creek and I may not have a job. But the reality of the current market in Melbourne and Sydney is slowing unraveling.

 

[twotooto]

There's a fair bit of dramatic speculation going on around the traps at the moment. Personally, I'm in Perth(Perthonally?) where there's been a bit of a decrease on median prices over the last couple of years. I think it's probably just about bottomed out/maybe a slight decrease to come. Not sure about the rest of Australia.

One thing I have noticed over the years is that no matter how well we're going, there's always an element spruiking the "market is going to crash" narrative. With the advent of online news, social media and monetised YouTube channels, this has gotten worse because as we all know, nothing sells like drama.

Anyway, thought this was a fairly good, reasoned and rational article regarding this supposed crash that's on the cards.

https://www.livewiremarkets.com/wires/will-australian-house-prices-crash

With all of that said, I'd still be holding off signing up for a mortgage in the near future. Can't hurt to play it safe, as it's very unlikely that median prices will increase markedly in the near future.

 

[its free real estate]

why the the doomsday spruikers never mention immigration levels?

What about them? Record highs, with full employment, and Sydney still down 10%.

 

[its free real estate]

There's a fair bit of dramatic speculation going on around the traps at the moment. Personally, I'm in Perth(Perthonally?) where there's been a bit of a decrease on median prices over the last couple of years. I think it's probably just about bottomed out/maybe a slight decrease to come. Not sure about the rest of Australia.

One thing I have noticed over the years is that no matter how well we're going, there's always an element spruiking the "market is going to crash" narrative. With the advent of online news, social media and monetised YouTube channels, this has gotten worse because as we all know, nothing sells like drama.

Anyway, thought this was a fairly good, reasoned and rational article regarding this supposed crash that's on the cards.

https://www.livewiremarkets.com/wires/will-australian-house-prices-crash

With all of that said, I'd still be holding off signing up for a mortgage in the near future. Can't hurt to play it safe, as it's very unlikely that median prices will increase markedly in the near future.

Perth is a bit different to the big eastern capitals in that it actually has a substantial industry that is separate from property. The property market decline in Perth is related to the pause in the mining boom, but the good thing is that this isn’t self reinforcing.

In Melbourne and Sydney the drivers for growth are property related, so a downturn in property can create a negative spiral. Sydney especially is incredibly geared around financial and property services, from mortgage lenders to residential construction and everything in between. A downturn in Sydney is something that could easily feed on itself.

 

[CheapCharlie]

There's a fair bit of dramatic speculation going on around the traps at the moment. Personally, I'm in Perth(Perthonally?) where there's been a bit of a decrease on median prices over the last couple of years. I think it's probably just about bottomed out/maybe a slight decrease to come. Not sure about the rest of Australia.

One thing I have noticed over the years is that no matter how well we're going, there's always an element spruiking the "market is going to crash" narrative. With the advent of online news, social media and monetised YouTube channels, this has gotten worse because as we all know, nothing sells like drama.

Anyway, thought this was a fairly good, reasoned and rational article regarding this supposed crash that's on the cards.

https://www.livewiremarkets.com/wires/will-australian-house-prices-crash

With all of that said, I'd still be holding off signing up for a mortgage in the near future. Can't hurt to play it safe, as it's very unlikely that median prices will increase markedly in the near future.

That article is over one year old
Conditions have changed since then

 

[twotooto]

Perth is a bit different to the big eastern capitals in that it actually has a substantial industry that is separate from property. The property market decline in Perth is related to the pause in the mining boom, but the good thing is that this isn’t self reinforcing.

In Melbourne and Sydney the drivers for growth are property related, so a downturn in property can create a negative spiral. Sydney especially is incredibly geared around financial and property services, from mortgage lenders to residential construction and everything in between. A downturn in Sydney is something that could easily feed on itself.

Fair enough.

That article is over one year old
Conditions have changed since then

Ok. My bad.

 

[CheapCharlie]

 

[_Mike_]

Crash is a subjective term, whilst house prices will drop in some cases it’s not going to be the burst of the imaginary bubble. Nothing we haven’t heard before, the GFC ten years ago was supposed to have seen a burst of the housing market. The graphs plot a reaction to a number of factors, but people are still buying on emotion and artificially popping up the prices of houses. Not only can the Perth housing market be attributed to the downturn in mining, the current Strata Titles reform is also having a significant impact on the Pert economy as a result of the unsustainable urban sprawl.

Melbourne & Sydney, especially, have always been priced at the higher end of the market and more susceptible to manageable drops in price, but you’re not going to see prices in either capital drop by 50%.

 

[Leeda]

always bank on the lowest number then you won't be depressed.. c'mon you know it makes sense.. just don't be greedy..

 

[Gralin]

more likely to be a correction than a crash, depends if the banks continue to keep the purse strings tighter on loan applications as that is the main driver currently

there is enough bubbling away that it could turn ugly

 

[Benny78]

Who cares. The economy needs the property boom or we all die. Prices go down too much and rates will get cut and prices go up up up!

 

[Lebbo73]

Yep. The only thing that could possibly stop it is a massive QE program. The Rba is gearing up.

Whatever happens the australian dollar is going to crash.

QE would be economic suicide. Rudd’s cash splash has only laid the groundwork to make this upcoming crash even worse.

 

[Espe]

Crash is a subjective term, whilst house prices will drop in some cases it’s not going to be the burst of the imaginary bubble. Nothing we haven’t heard before, the GFC ten years ago was supposed to have seen a burst of the housing market. The graphs plot a reaction to a number of factors, but people are still buying on emotion and artificially popping up the prices of houses. Not only can the Perth housing market be attributed to the downturn in mining, the current Strata Titles reform is also having a significant impact on the Pert economy as a result of the unsustainable urban sprawl.

Melbourne & Sydney, especially, have always been priced at the higher end of the market and more susceptible to manageable drops in price, but you’re not going to see prices in either capital drop by 50%.

Australia survived the GFC because of the mining boom and the Rudd government, otherwise we would of followed most countries. Had nothing to do with the usual "our market is different" "have heard it all before" lingo.

But yes, people are buying on emotion, as well as investors having the opinion that property is 'easy money' alongside foreign investment due to the capital gains. That is the definition of a bubble.

 

[Seeds]

QE would be economic suicide. Rudd’s cash splash has only laid the groundwork to make this upcoming crash even worse.

Well it looks like its happening if there is another 5-10 percent fall in sydney and melbourne property prices.

 

[Admiral Byng]

Things is that talking about it too much can make it worse. Like many markets, it relies upon confidence. Once confidence is lost people behave differently.

 

[The Edukator]

Australia survived the GFC because of the mining boom and the Howard government, otherwise we would of followed most countries. Had nothing to do with the usual "our market is different" "have heard it all before" lingo.

EFA

 

[Maggie5]

EFA

You left out, Howard government selling assets and our gold reserves at bargain prices.