Society/Culture Australian Property Prices to Crash?

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Madas

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Aug 16, 2020
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The problem now is all of the long term rental stock is being swallowed up by Airbnb and other short term rental options. Why have a family living in your house paying you $4 or 500 a week in rent when you can jam it full of beds and rent it out for $1,000 a weekend and be able to use it yourself when you want?

I live on Phillip Island, there are currently 3 rentals available in Cowes where I live and only 7 others on the rest of the island. Families are posting almost daily on the local fb buy, swap and sell pages, desperate for a rental for them and their families.

I see stories almost daily from WA, NSW and Qld about a massive rental shortage.
This is very true and same where I live
This Pandemic has just created the perfect storm
Everyone traveling nationally so chewing up all holiday accomodation
Then they decide they want out of the cities so sell up and move .
Once they find a place they need to wait till a build happens , chewing up rental accommodation.
Meanwhile investors taking advantage of low interest rates are buying up left right and centre trying to take advantage of this rental squeeze .

This stupid pandemic has got a lot to answer for .
 

Opine

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Aug 30, 2018
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I guess it will really only affect them if they want to sell.
That too. My other concern is that prices escalated so much so quickly that without parental assistance many first home buyers have to borrow alarmingly high amount to get into the market. This is going to have enormous consequences on relationships, family, children and health. Young couples may have less real choice about selling.
 

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Herne Hill Hammer

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This is very true and same where I live
This Pandemic has just created the perfect storm
Everyone traveling nationally so chewing up all holiday accomodation
Then they decide they want out of the cities so sell up and move .
Once they find a place they need to wait till a build happens , chewing up rental accommodation.
Meanwhile investors taking advantage of low interest rates are buying up left right and centre trying to take advantage of this rental squeeze .

This stupid pandemic has got a lot to answer for .

WA shutting their borders to eastern state fifo workers and telling them that if you want to work in WA then you need to move here, the locals were cheering for this. So a lot did relocate to WA and took all the rentals and the locals were screaming about it.

Be careful what you wish for sometimes.

Also a lot of people returning from overseas and moving back into their homes all over the country.
 

Number37

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WA shutting their borders to eastern state fifo workers and telling them that if you want to work in WA then you need to move here, the locals were cheering for this. So a lot did relocate to WA and took all the rentals and the locals were screaming about it.

Be careful what you wish for sometimes.

Also a lot of people returning from overseas and moving back into their homes all over the country.

IMO, when all those people remember why they left in the first place and return to wherever they went (when the pandemic is over) ...that exodus will trigger the collapse of the housing market because it won't happen over years it will be a sudden thing.
 

Madas

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IMO, when all those people remember why they left in the first place and return to wherever they went (when the pandemic is over) ...that exodus will trigger the collapse of the housing market because it won't happen over years it will be a sudden thing.
I don’t reckon
IMO we are going to get our doors beaten down by immigrants from all over the world wanting to move here.
It’s proven the safest place for a pandemic and is a land of opportunity and prosperity.
Imagine the stories that immigrants that have moved here in the last 5 years are telling the folks back home
“ yeh we just arrived in Sydney , bought a house in ........... for $500,0000 next thing we know it was worth $1 million , you’re not gonna believe this place. Get over here !”
 

Number37

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I don’t reckon
IMO we are going to get our doors beaten down by immigrants from all over the world wanting to move here.
It’s proven the safest place for a pandemic and is a land of opportunity and prosperity.
Imagine the stories that immigrants that have moved here in the last 5 years are telling the folks back home
“ yeh we just arrived in Sydney , bought a house in ........... for $500,0000 next thing we know it was worth $1 million , you’re not gonna believe this place. Get over here !”

That's a possibility.
IMO the exodus will be swift.
The mass immigration can only happen over time.
 

Forever North

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Too many vested interests and fingers in the pie within governments, banks, developers, investors, elites etc for any large scale housing collapse. Our economy/banking system is largely based on housing, whether ownership or investing. Just have a look what’s happened the past 18 months, a global pandemic, countries shutting down, massive disruption everywhere, huge uncertainty, the worst event in our lifeline, probably since WWII. In theory all the hallmarks and factors for a massive housing collapse but bizarrely enough the exact opposite has occurred. If the past 18 months hasn’t seen prices drop wtf will? Banks with the encouragement of government have done their bit by keeping the official rates at record lows (for the foreseeable future as well) to keep the market stimulated and have been flexible with customers regarding repayments, loan deferals etc. Fed govt has thrown plenty of money around via jobkeeper and jobseeker. Without this I’d say a lot more people would have lost their homes sending the market and confidence downward. I know quite a few people that took advantage of the low rates and purchased properties up in Queensland, Noosa, GC, Sunshine Coast etc. Prices have jumped around 30% over the past 18 months in those regions. They aren’t likely to come down either given that a lot of people are moving up there for work/lifestyle/fed up reasons. There’s bugger all rentals available up there further inflating the market. Eventually pretty much overseas migrants will replace those that have left Vic and NSW once borders re open keeping housing on the up in those states. One issue I can see is housing materials shortages and world wide supply chain issues slowing down construction of new dwellings. This will probably create an illusion of scarcity futher driving prices up. Great for owners and investors, sh*t for those that want in.
 

Kwality

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Any way you look at the property market, it remains tough to get into:
'An exodus of property investors has resulted in the largest shortfall of homes being bought to lease out in seven years, increasing the pressure on an already stretched rental market.
Smaller returns, tighter lending policy and a jostling between landlords and tenants for rights has caused many mum and dad property investors – who provide the majority of Australia’s rental stock – to sell and look elsewhere.
Over the past five to seven years, a clear trend has emerged nationally showing the portion of investors buying into the market is not keeping up with those selling, despite investor levels rising over the past six months.
This has inevitably caused the number of properties available to tenants to shrink.'


..... real estate offices were being told by landlords that they were fed up with “over-zealous” new rental legislation imposed by state governments.
“One can’t expect to meet rising demand requirements by constantly discouraging those capable of providing the rental supply. It’s not rocket science.”
 

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Kwality

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interpolate? My point is there’s a whole load of dross published in this space

Like it or not there are any number of interested parties in the space. Those looking to get on to the property ladder to people wanting a rental property to build a nest egg etc. All with different takes, thats why helping yourself to 'sort the wood from the trees' ...

Where you can live for work/life balance adds pressure for some, not others. Same applies to public transport links focussed on the CBD.
 

ElectricG

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I remember reading reddit threads on this topic in around 2011. I wonder how many people have been “holding out” for the crash.
 

Frank Grimes

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I remember reading reddit threads on this topic in around 2011. I wonder how many people have been “holding out” for the crash.
I have been hearing people saying property prices were too high and wait for them to come down back in the early 00's.

I even remember some economist in the mid 00's spruiking that house prices are going to fall 40% and had a bet to walk to Mt Kosciuszko (which he lost). He was so certain he even sold his house expecting to buy into the market when the crash happens.

That was back in the mid 00's where I think the average house price was something like 350k~400k. That just looks incredibly cheap now.

A house next to me was sold for $1.1 million the other week. It is a 3 bed house in the outer east suburbs on a 600sqm block. It is in very good condition, but nothing like a fancy mansion and about 25 years old. That price is insane.
 
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Madas

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We are just so lucky we live in a strong economy that seems to defy Obstacles like the GFC and now the Pandemic.
The GFC correction was probably only about 10-20% on average even though the pre GFC boom pushed everything up 30-40% .
The momentum behind the current boom will likely see demand sustain for a couple more years yet, followed by probably another 10-20% correction .
( Note - don’t put your life savings down on my opinion, I’m probably wrong )
 

FRUMPY

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I have been hearing people saying property prices were too high and wait for them to come down back in the early 00's.

I even remember some economist in the mid 00's spruiking that house prices are going to fall 40% and had a bet to walk to Mt Kosciuszko (which he lost). He was so certain he even sold his house expecting to buy into the market when the crash happens.

That was back in the mid 00's where I think the average house price was something like 350k~400k. That just looks incredibly cheap now.

A house next to me was sold for $1.1 million the other week. It is a 3 bed house in the outer east suburbs on a 600sqm block. It is in very good condition, but nothing like a fancy mansion and about 25 years old. That price is insane.

haha fall by 40% - yeah dont think he was good at his job, not even close.

Do people expect if/when there is a downturn that $1m properties will be available for $600k? If so, then ive got bad news for you
 

HirdsTheWord

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Too many vested interests and fingers in the pie within governments, banks, developers, investors, elites etc for any large scale housing collapse. Our economy/banking system is largely based on housing, whether ownership or investing. Just have a look what’s happened the past 18 months, a global pandemic, countries shutting down, massive disruption everywhere, huge uncertainty, the worst event in our lifeline, probably since WWII. In theory all the hallmarks and factors for a massive housing collapse but bizarrely enough the exact opposite has occurred. If the past 18 months hasn’t seen prices drop wtf will? Banks with the encouragement of government have done their bit by keeping the official rates at record lows (for the foreseeable future as well) to keep the market stimulated and have been flexible with customers regarding repayments, loan deferals etc. Fed govt has thrown plenty of money around via jobkeeper and jobseeker. Without this I’d say a lot more people would have lost their homes sending the market and confidence downward. I know quite a few people that took advantage of the low rates and purchased properties up in Queensland, Noosa, GC, Sunshine Coast etc. Prices have jumped around 30% over the past 18 months in those regions. They aren’t likely to come down either given that a lot of people are moving up there for work/lifestyle/fed up reasons. There’s bugger all rentals available up there further inflating the market. Eventually pretty much overseas migrants will replace those that have left Vic and NSW once borders re open keeping housing on the up in those states. One issue I can see is housing materials shortages and world wide supply chain issues slowing down construction of new dwellings. This will probably create an illusion of scarcity futher driving prices up. Great for owners and investors, sh*t for those that want in.

I mean you are absolutely right.

The government has over the period of 20 years allowed housing to now be worth in excess 9 trillion dollars. Let that sink in. 9 TRILLION dollars. This is almost 5 x our national GDP for gods sake.

It is worth more than the ASX and Superannuation combined and better yet there is ZERO Housing policy in relation to affordable housing. Let that also sink in. There is effectively zero policy from State and Federal ensuring housing affordability for people in 10, 20, 30 years time. Australia biggest monetary value has ZERO bus driver.

It is absolute insanity what is occurring and you are 100% correct that vested interests are at play. Any common sense country would be making this issue numero uno yet here we are with the Australian Government doing absolutely sweet fu** all about it, if anything they are actively ensuring it continues to increases.
 

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