Society/Culture Australian Property Prices to Crash?

[Mofra]

Macquarie has been growing their retail mortgage book for sometime but it is still a responsibly small part of what they do.

To put it into perspective, the year Alan Moss was paid $33.5m (including bonuses), his brother Bill Moss (as head of securitised lending) was paid $31.5m including bonuses.
That's not all residential for sure but it was a huge contributor for them. Weirdly someone had the great idea of starting a taxi business as part of that portfolio pre-GFC (Lime Taxis). It's a weird company.

 

[rdhopkins2]

As long as there is large scale immigration creating property demand (purchasers and renters), there will be no doomsday.

 

[Bombermania]

As long as there is large scale immigration creating property demand (purchasers and renters), there will be no doomsday.

Property could still crash with immigration at high levels, its less likely but the rules of supply and demand and access to credit are still at play.

 

[its free real estate]

Property could still crash with immigration at high levels, its less likely but the rules of supply and demand and access to credit are still at play.

Exactly. House prices are a function of credit.

 

[Leeda]

credit is a function of house.. these things don't grow on trees...

 

[CheapCharlie]

Interesting article from Bloomberg on Apartment prices in Australia

30% Apartments resold at a loss in Brisbane
45% Apartments resold at a loss in Perth

 

[kranky al]

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

By rudds cash splash, i can only assume that you mean the money spent on stimulus that saw us continue without a recession whilst almost every other country in the world endured the most savage recession since the great depression - that was particularly brutal in countries that went with austerity programs.

That cash splash?

Which unlike the plasma bonuses lil johhny used to bribe the electorate with their own money - instead of putting that money in a future fund - was used to stave off an impending consumer confidence crisis.

In short lebbo think plasma bonus good economics - stimulus spending bad.

Ug

 

[Lebbo73]

By rudds cash splash, i can only assume that you mean the money spent on stimulus that saw us continue without a recession whilst almost every other country in the world endured the most savage recession since the great depression - that was particularly brutal in countries that went with austerity programs.

That cash splash?

Which unlike the plasma bonuses lil johhny used to bribe the electorate with their own money - instead of putting that money in a future fund - was used to stave off an impending consumer confidence crisis.

In short lebbo think plasma bonus good economics - stimulus spending bad.

Ug

Both bad. Btw, have you ever heard of China?

 

[kranky al]

w

Both bad. Btw, have you ever heard of China?

So you think that the stimulus spending was bad?

My brother and i owned a chain of mobile shops in sydney and canberra when the gfc hit.

Once a month we had a meeting in sydney with 3 and outlined sales targets and discussed the last months sales.

All the shops had hit 1/3rd or less of their targets.

I showed them a video of me walking around an a class shopping centre for 15 minutes on a sunday and the only other people i saw were people in uniform who were making their way to other shops for work.

People had s**t themselves - the difference between a recession and not having a recession is often consumer confidence - the stimulus spending had an immediate effect on confidence - people came out and started spending money which averted us putting off all our casuals - which averted them stopping spending. Ripple effects.

Yes we had china - but the us is australias 3rd largest trading partner. The us is chinas largest trading partner.

There is no doubt in anyone in retails mind that the stimulus spending got us over the line.


If you look at other countries that have similar trading levels with china who also have iron ore their major export to china - ie brazil - that had no stimulus spending - their economy suffered a contraction - whilst ours continued to grow.

 

[Mofra]

By rudds cash splash, i can only assume that you mean the money spent on stimulus that saw us continue without a recession whilst almost every other country in the world endured the most savage recession since the great depression - that was particularly brutal in countries that went with austerity programs.

That cash splash?

Which unlike the plasma bonuses lil johhny used to bribe the electorate with their own money - instead of putting that money in a future fund - was used to stave off an impending consumer confidence crisis.

In short lebbo think plasma bonus good economics - stimulus spending bad.

Ug

Henry and Stevens (both Howard era appointees) were largely the architects behind the scenes of it.
Treasury estimates that is supported the unemployment rate by a staggering 1.6% in the short term, with the obvious ongoing benefits to consolidated revenue via higher tax receipts / lower welfare costs.

It's one of the very few things Rudd got right.

 

[medusala]

If you look at other countries that have similar trading levels with china who also have iron ore their major export to china - ie brazil - that had no stimulus spending - their economy suffered a contraction - whilst ours continued to grow.

The stimulus avoiding recession argument is incorrect for three reasons

1) per capita basis - we had a recession
2) stimulus money came after neg gdp quarter so wouldnt have affected the quarter that would have technically defined a recession
3) Chinese money stimulates was many times the magnitude of Swans spending.

 

[medusala]

So property prices are falling in Oz and a number of countries

Seems like a brilliant time to dramatically raise CGT rate and get rid of negative gearing not to mention bringing in rental laws like Vic govt.

What could possibly go wrong?

 

[Crankyhawk]

So property prices are falling in Oz and a number of countries

Seems like a brilliant time to dramatically raise CGT rate and get rid of negative gearing not to mention bringing in rental laws like Vic govt.

What could possibly go wrong?

Will be able to buy soon... for the kids.

 

[Deliverance]

A nice crash would be great. I'm ready to buy again.
Ant
Grasshopper

 

[Craven Morehead]

If Labor get in, (which seems a certainty), and implement the policies they've published you'll see a crash in rural property values which has never been seen before.
There'll be a lot of twitchy foreign and multi-national investors, let alone locals, squirming in their seats.

 

[Nuggs Bunny]

If Labor get in, (which seems a certainty), and implement the policies they've published you'll see a crash in rural property values which has never been seen before.
There'll be a lot of twitchy foreign and multi-national investors, let alone locals, squirming in their seats.

Why? What rural land is overvalued?

 

[Craven Morehead]

Why? What rural land is overvalued?

In a lot of cases, yes. As a general rule of thumb, livestock prices dictate land values to a large extent.
The main trigger will be the banning of live export and the impact that will have on cattle prices overall.
A lot of conglomerate purchases are made with tens of thousands of head included.
With the inevitable downturn, (some are predicting a crash), in cattle prices, farms will be way less viable and hence less valuable.
There is going to be a lot of pain.

 

[Poor Form]

Feeling ok with this overdue crash/correction, prices were well and truly out of control in Melbourne and Sydney. I think the figure I've seen thrown around of 9.1% from November 2017 (i think?) is unders, anecdotally but with some investigation i think the drop is actually closer to 20% in Melbourne inner south east. I am looking to buy now so a good result for me to be sure

I do feel like we've already seen the sharpest part of the decline as there is still money out there just very cautious atm (including credit and private savings) waiting to try pick the bottom.

 

[Messenger]

So property prices are falling in Oz and a number of countries

Seems like a brilliant time to dramatically raise CGT rate and get rid of negative gearing not to mention bringing in rental laws like Vic govt.

What could possibly go wrong?

The ALP will definitely bottle it and produce some diluted version. The lack of capital appreciation over the short to medium term will likely discourage those who were in for the tax minimisation.

There’s a reckoning on the horizon for those leveraged to the eyebrows for a chain of units. Won’t be a bad thing if a correction yields a transfe to residential owners.

I’ve just sold and bought in this market and the quality of housing stock on the market has deteriorated significantly.

 

[its free real estate]

I’ve just sold and bought in this market and the quality of housing stock on the market has deteriorated significantly.

What do you mean? More people bailing out and selling below average property they were holding?

 

[Benny78]

1. Sell before ALP win election
2. ?????????
3. Profit

 

[Poor Form]

1. Sell before ALP win election
2. ?????????
3. Profit

2. ??????? = wait for anti business and investment policies to take effect.

But tbh i don't expect things to be as bad as some doomsday prepers make out with regards to labor policy effect on the market.

 

[Bollox]

As always, the concern is the ALP would spend the money expected to be derived from their housing policies before they've earnt it. Before they can even quantify it. If the s**t does hit the fan they may be forced to back down on all of it anyway...due to it being utterly irresponsible and contributing to extended negative growth.
It is already looking that way to ratings agencies and offshore investors who are looking long term as always. They see slowing growth worldwide and falling house prices everywhere. Then they see what the ALP is proposing and must be wondering, WHY ?

 

[Messenger]

What do you mean? More people bailing out and selling below average property they were holding?

We followed the market fairly closely for about 12 months before we sold, visited plenty of homes, etc.

Our view was that within the price band we were looking at the quality of homes was falling over a 12-18 month period.

Perhaps our tastes were changing, perhaps some were holding onto their properties.

 

[medusala]

Will be able to buy soon... for the kids.

If you had told someone 20/30 years that vast numbers of 30 and even 40 year old people on good incomes couldnt get on the property ladder you would have been laughed at.