When Australian House Prices Will Crash!

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[LucasBenjamin-hvsk]

Back in the day, when I purchased my first home to live-in; that was Perth in the early 1990s, first mortgages with rates of 8 to 9% and 9% to 10% were typical. People will have to accept the possibility that we won't ever return to 3%. If sellers must sell, home prices will have to decline, and lower evaluations will follow. Pretty sure I'm not alone in my chain of thoughts.

[jurassicnev]

I can't stand clickbait titles where the content is the exact opposite. However, I got well informed through the comment section so it worked out for the best for me anyway.
It's a shame you live in a world where people are more concerned about selling stuff to people instead of caring about people.

[andrewbroome]

Answer- NEVER..
As long as banks are allowed to lend against unearned and untaxed paper equity/capital gains, perpetual growth will continue

[Contemplator]

I disagree with much of what you said. Australia's economy is literally one of the least diverse in the world for a start - we do not have great "economic fundamentals" at all. The largest sector of growth in the Australian economy is the ever expanding, bloated public service while our private sector languishes and withers away. We also do not have competent or "effective" government at any level and the RBA has made catastrophic bungle after catastrophic bungle - their predictions are usually wildly wrong. Lastly, our banking system is a joke and is massively overexposed to property in that that's the only kind of lending they really do. Our banks do minimal lending to business start-ups and expansions etc because all they care about is riding the property bubble to safe, record profits year after year. Australian mortgage holders hold the highest levels of debt in the developed world which does not equate to your position of Aussie banks being "well regulated".

You're a mortgage broker so you have a clear agenda in trying to convince people that Aussie property is different and can only ever go up in price. The house of cards Australian economy and the monstrous housing bubble it's built on is a disaster waiting to happen. Nothing goes up forever mate. All speculative financial bubbles burst eventually.

[JedPotts-jvux]

politicians want house prices to continue rising and they know they can force it to happen by keeping immigration higher than housing construction.

thats something a lot of people don't understand, it doesn't matter how many houses we build because immigration will always be adjusted to compensate.

if we cut all the barriers to housing construction and double the amount of houses we build each year, politicians will just increase immigration and we'll be right back where we started.

politicians choose what they want house prices/rent to be, and they make it happen. the ONLY way housing supply and housing affordability can be "fixed" is by tying migrant intake to housing avaliability so that politicians can't use immigration to interfere with the housing market like they have been for the last 30 years.

there is something truly horrifying about hearing "our government is doing everything it can to ease cost of living pressure" when they're 100% responsible for the current housing crisis.

[santiagokiwi]

I purchased my house and land package in Perth July last year for my first home. It's just been finished and final valuation came in at 46% more than what I paid for it. Absolutely shocking. Good for me but....not good overall.

[shixingong]

Australia is visibly going downhill, and is becoming less and less friendly to the ordinary middle class. Housing prices and living costs are extremely high, similar to those in Northern Europe. Domestic garbage is only collected once a week, and there are no decent industries except mining. With the influx of immigrants, the workplace is becoming more and more competitive, and it is normal for hundreds of people to compete for positions without special skills. Infrastructure is even more messed up, and there is no subway in the Olympic City.

[craigduffield]

I think it will go sideways for several years with some distressed sales.The government will adjust immagration and interest rates to stop prices from falling too far.This is what has happened in the last 2 recessions anyway.

[jobyjob_memoriesof]

Mate, it just runs due to an artificially created favourable conditions... The official system is eager to setup a dysfunctional society by making people invest in properties which would be purchased by someone else so as to make the seller more rich with support of govt. Have you heard of such a manipulated system anywhere else ? If you do proper work/business you need to pay hefty taxes.. but if you invest in a ponzi scheme (money chain) and reap undue profits by artificially created supply-demand imbalance, that capital gains will receive a 50% exemption from tax.

Why there is such a purposefully set dumb system ?

Also, no one knows the source of funds coming from overseas boosting up the prices of crappy tomato boxes.

[raminsadri]

politicians never let this happen. The economy is designed to have inflation in properties (specially houses)

[llobj]

Drivers for increased house prices are immigration and house shortages...

Unemployment (peoples ability to pay their mortgage and not lose their homes) is the massive risk to our property market.

[ll-dqij]

Probably never unfortunately.. Australian property has so many influencial supporters eg. the banks, the government, big developers etc etc that's it will never fall to any great extent..maybe 5 to 10% at maximum.. And the squeels are heard long and loudly until government steps in to correct it..

[DriftLibrary]

It will crash in Australia but South East QLD will be the least affected.

[SalamNaser-ch]

No there is no shortage at all, the supply was much more from 2013 until 2020. The problem is from speculation. Canada and Australia escape 2008 correction but they will not escape 2024/2025 correction. New immigrants and new generations will not work hard to give old generations easy money.

[rodwilliamson]

The only reason prices have risen the extent they have is due to a 35 year decline in interest rates to effectively zero. As interest rates dropped, people could afford to borrow more therefore increasing credit demand which flows into asset prices. Interest rates cycle last approx 35-40 years. Well we are now on the change from lowering to rising interest rate period. Good look keep the bubble going with rising interest rates.

[llobj]

Prob fact check your comments on a diverse economy... We have one of the most uncomplicated economies fully reliant on mining and then gass exports... The rest is service related and or indirectly depended on mining so our economy is depended on global demand and growth as this effects commodity prices.

Unemployment is reliant on the credit cycle / CBA fund rate. Simply saying unemployment is not a risk because it is low suggests to my you need to look at these cycles and historic connections between the two.

My suggestion is you look into this so you are open to the drivers to look out for leading to changes in the market...

[techsuvara]

Given QE is going to happen again in the USA, and Interest rates will likely fall by the end of this year. Asset prices will most likely keep climbing.

[KSlcs]

Total clickbait title then you say the opposite....house prices will crash....no they wont.

[davidbrayshaw]

While I have to say, I almost always agree with you supposition with regards to many aspects of the Australian economy, to describe Australia as having "robust economic foundations" couldn't be further from the truth. Our economy has continued to narrow for decades. Along with it, so has our productivity, the proof of which is in nearly two decades of falling per capita GDP.
The only thing mitigated the fallout of the last two major economic downturns was excessive government spending accompanied by excessive levels of public sector debt.
And the only growth in Australia's economy has been driven by housing and immigration for the best part of three decades.
Mining and agriculture are tiny employers. Collectively they employ fewer people than the building industry! In the case of mining, most of the profits from digging up Australia's resources
go into the hands of multinational companies with Australia receiving peanuts due to the inherently useless or corrupt governments that we've grown to accept as normal.
Manufacturing is a shadow of its former self, employing less than half the people that it did when Howard came to power, just 28 years ago. That's even worse than it sounds when you factor in that immigration has increased Australia's population by just shy of 50% or nearly 8.5 million people, in the same time.
Yes, we have education, thanks to privatising our tertiary education sector. Yes, we have a healthy banking sector.
But don't kid yourself, Australia's economy is still a Ponzi scheme reliant on holes, houses and unbridled immigration. I wish I was a kid again. At least then, all we had to worry about was the global oil crisis and despite that, the economy and our real standard of living was higher than it is today.

[LeePark-wl]

Nah...the world is growing. Materials arecmore scarce. And gvt supports the market