Society/Culture Australian Property Prices to Crash?

[Firestorm13]

Just on the debate about housing affordability, there is no doubt houses are less affordable now than they were in the past. I found this chart somewhere years ago and found it useful to illustrate this point. Bottom line is once upon a time a house was 3-5 times the average wage, now it's something like ten times the average wage. The chart only goes to 2010 but you get the picture.

View attachment 847031

Interest rates were 3 and 4 times higher than what they are today as well

Also you need to consider migration rates as well

 

[hamohawk1]

Will the unemployment be worse, compared to other crisis and times due to female participation in the work force?

 

[Scotland]

Unemployment will spike, but there will be a boom in re-employment once businesses get going again.

 

[hamohawk1]

We have to remember the economy was tanking pretty hard prior to the coronavirus (influenced by the bushfires and drought, but not exclusive) so i dont hold th optimism of some regarding the bounce back.

 

[Deliverance]

Yep, migration and OS buyers have been the main drivers recently. Our pissweak dollar may keep it going though.

 

[Nuggs Bunny]

The dollar being weak opens more doors for Australian businesses who export (or are looking to) and will help stem the tide of jobs being lost to overseas. Hopefully these two features will combine to keep unemployment low once this is all over.

 

[Scotland]

We have to remember the economy was tanking pretty hard prior to the coronavirus (influenced by the bushfires and drought, but not exclusive) so i dont hold th optimism of some regarding the bounce back.

Rebuilding communities is a localised economic sugar hit.

Society can't function long term as it is right now. Maybe if you are a first year uni student who votes Greens and has a Che Guevara t-shirt you think half the country sitting around doing * all is sustainable, but it isn't. Once people start going back to work the need for services, retail, hospitality etc. returns. No point having a coffee cart at the station when everyone is working from home, but it's not like when people go back outside they will stop wanting coffee etc.

 

[Evolved1]

Six month moratorium on evictions.

Good news for renters, not so good for landlords.

 

[Retzlaff]

But I’m sure you can evict them if you sell your investment property?

 

[DangerousD]

Six month moratorium on evictions.

Good news for renters, not so good for landlords.

Interesting take by the government, strange really. It seems they are removing themselves from making any meaningful policy on this.

As a land lord i hope my tenants can stay employed and if they take a hit, hopefully its one of the household and not both, if i need to drop rents, im more than comfortable and able, but id hope the banks would have to help, rather than should help.

Im not sure i like the idea of Scotty, just standing up on a podium, telling the banks to do the right thing.

 

[Evolved1]

Interesting take by the government, strange really. It seems they are removing themselves from making any meaningful policy on this.

As a land lord i hope my tenants can stay employed and if they take a hit, hopefully its one of the household and not both, if i need to drop rents, im more than comfortable and able, but id hope the banks would have to help, rather than should help.

Im not sure i like the idea of Scotty, just standing up on a podium, telling the banks to do the right thing.

Government policy is focused on the lower tiers of Maslow's hierarchy of needs for now.

I expect Scomo to bail out the banks and businesses well before landlords.

It's not a bad thing to be kind if you're not expecting to be rewarded for it. As an investment strategy, kindness wont help you. If you believe in karma, your opinion will differ to mine.

 

[Bombermania]

Government policy is focused on the lower tiers of Maslow's hierarchy of needs for now.

I expect Scomo to bail out the banks and businesses well before landlords.

It's not a bad thing to be kind if you're not expecting to be rewarded for it. As an investment strategy, kindness wont help you. If you believe in karma, your opinion will differ to mine.

The banks don't need Canberra when they have central banks pumping hard.

 

[DangerousD]

Government policy is focused on the lower tiers of Maslow's hierarchy of needs for now.

I expect Scomo to bail out the banks and businesses well before landlords.

It's not a bad thing to be kind if you're not expecting to be rewarded for it. As an investment strategy, kindness wont help you. If you believe in karma, your opinion will differ to mine.

Ive never really delved in to whether i believe in karma or not and i definitely won't be needing a bailout from the government, hopefully the banks won't need a bail out to freeze payments for a few months, if tenants can't pay rents.

Its not in the banks best interest to foreclose any loans at this time, so hopefully they start offering some solutions in the coming weeks.

 

[yodellinhank]

Rebuilding communities is a localised economic sugar hit.

Society can't function long term as it is right now. Maybe if you are a first year uni student who votes Greens and has a Che Guevara t-shirt you think half the country sitting around doing fu** all is sustainable, but it isn't. Once people start going back to work the need for services, retail, hospitality etc. returns. No point having a coffee cart at the station when everyone is working from home, but it's not like when people go back outside they will stop wanting coffee etc.

Retail was on it's knees pre covid 19

 

[Deliverance]

Jenman is not for everyone, but I quite like his style.

AUCTIONS DESCEND INTO TOTAL FARCE - Jenman Support

Even with the usual fake auction clearance rates, there was no way the industry could hide the auction disasters on the weekend.

jenman.com.au

 

[hamohawk1]

If this doesn't tank the market, i have no faith anything else will.

 

[Scotland]

It's less about what will tank the market and more about what the government and reserve bank will do about it.

Cash rate is already at 0.25%, so there's no scope for a good old fashioned interest rate slash. I reckon some QE isn't far away though.

 

[maryjames]

The market has virtually stopped. No one is buying and no one is Selling. It’s dropped 85% in sales this month.

50% of realestate workers will be gone if not already. All the PAs gone. Costly to business owners. Sales agents on retainers. Let go. It’s carnage for realestate Agents.

Even for big business it’s carnage. Owning huge rent roles is the only businesses that will not fold.

 

[Scotland]

Real estate agents add no value so if people finally wake up to how superfluous they really are that's one positive to come out of all this.

 

[maryjames]

Real estate agents add no value so if people finally wake up to how superfluous they really are that's one positive to come out of all this.

You been burnt? Someone has to list and sell homes?

Why the hate?

 

[Scotland]

You been burnt? Someone has to list and sell homes?

Someone has to stack shelves too.

When houses were $50-100k and were advertised with small black and white photos in the paper, then agents earned some of their commission. Now they get the low paid admin girl to put a bunch of nice photos on the internet and then pocket $10-15k or more from each sale.

I've used settlement agents who get a flat fee and mortgage brokers who get nothing from the customer. Both 100 fold more useful than any agent I've had to listen to tell me how it's never been a better time to buy and how many offers they have received...

 

[maryjames]

Someone has to stack shelves too.

When houses were $50-100k and were advertised with small black and white photos in the paper, then agents earned some of their commission. Now they get the low paid admin girl to put a bunch of nice photos on the internet and then pocket $10-15k or more from each sale.

I've used settlement agents who get a flat fee and mortgage brokers who get nothing from the customer. Both 100 fold more useful than any agent I've had to listen to tell me how it's never been a better time to buy and how many offers they have received...

Agents get between 35% to 60% of the total commission depending on the agency they work for.
The rest goes to the boss and if a franchise other 10% or so goes to that.
The Average agents make 60k per year. And work 6 to 7 days a week chasing people to sell there homes. And with that person selling they prob have 3 agents who go in and the best man/woman wins.
70% of agents leave the industry within 2 years... and they have a bad rap from people thinking they make a lot of money? Lol

Sounds like a tough gig to me.

 

[Deliverance]

You been burnt? Someone has to list and sell homes?

Why the hate?

You can list and sell a home yourself. No agent is needed. Would you pay someone to sell your car?

 

[maryjames]

You can list and sell a home yourself. No agent is needed. Would you pay someone to sell your car?

And could miss out on 100k. Fact. Let’s say you price it to what 3 agents said. And sell it yourself.

And get that price.

But if auctioned it and sold it for 100k more which does happen you just lost yourself 90k. Factoring commission.

Believe me agents sell homes for a reason.. they have buyers. Create competition. The seller can say no to offers. The only reason properties dont sell is coz they are over priced. Not meeting the market.
Also when people try to sell it themselves they get heaps of time wasters and people making low offers hoping to get a deal. Also hear all the negatives about the house why they don’t like it etc.

Most people who try to sell it themselves end up getting an agent. Hence the reasons I said above.

I’m a property developer for decades and deal with agents and I know my s**t when it comes to realestate.

I’ve sold and listed many properties even some myself. Your logic is way off. I understand what you trying to say but reality is sellers need agents. I’ve auction properties I’ve own and in hot markets got competition from the agent and got way more then ever dreamed of. If I sold it myself who lost myself so much money and didn’t even realise it.

If you ever sell got luck doing it yourself and negotiating the price.. I’m sure you know what to say.

 

[Deliverance]

And could miss out on 100k. Fact. Let’s say you price it to what 3 agents said. And sell it yourself.

And get that price.

But if auctioned it and sold it for 100k more which does happen you just lost yourself 90k. Factoring commission.

Believe me agents sell homes for a reason.. they have buyers. Create competition. The seller can say no to offers. The only reason properties dont sell is coz they are over priced. Not meeting the market.
Also when people try to sell it themselves they get heaps of time wasters and people making low offers hoping to get a deal. Also hear all the negatives about the house why they don’t like it etc.

Most people who try to sell it themselves end up getting an agent. Hence the reasons I said above.

I’m a property developer for decades and deal with agents and I know my s**t when it comes to realestate.

I’ve sold and listed many properties even some myself. Your logic is way off. I understand what you trying to say but reality is sellers need agents. I’ve auction properties I’ve own and in hot markets got competition from the agent and got way more then ever dreamed of. If I sold it myself who lost myself so much money and didn’t even realise it.

If you ever sell got luck doing it yourself and negotiating the price.. I’m sure you know what to say.

Or alternatively you go to auction. Buyer A thinks it's worth 600k, buyer B thinks it's worth 650. Buyer A taps out at 600, buyer B gets it for 601 and you've missed out on 49k. You never know what the top budder was willing to pay, because they don't get pushed there.
Lol, taking an agent's valuation seriously.
Selling a house yourself us a piece of piss. The only reason I use an agent is when I don't live local to the property.