Housing Bubble Officially over?

jrt2020 on 06/06/2017 - 19:07
Last edited 06/06/2017 - 19:08

http://www.heraldsun.com.au/business/bank-may-have-called-en…

Hope this is true and finally people can get into the market

ONE of Australia’s top banking analysts thinks Bendigo and Adelaide Bank may have called the peak of the housing market.

Jonathan Mott, an analyst at investment bank UBS, says the timing of a decision by Bendigo and Adelaide to change the way it accounts for some mortgages is “unusual”.

It coincides with a slide in house prices in the biggest capital cities over recent weeks, Mr Mott notes.

Shares in all the big banks dropped yesterday and again today in the wake of Bendigo’s move.

The regional lender announced it was changing the way it values houses in the portfolio of properties that it calls Homesafe.

Financial

Comments

  • airal3rt on 06/06/2017 - 19:49

    Doesn't matter if it's happening now or in the next couple of years, it's definitely imminent. Many people who purchased property in the last 3-5 years will see some depreciation, the mid-late 2000's was the time to get into the property market.

  • Butt Scratcher on 06/06/2017 - 20:12
    +1

    Wat! housing bubble over? I don't think you know what a housing bubble is.

    But yeah, hopefully house prices do start to come down because there is certainly a house affordability issue at the moment

  • Halo375 on 06/06/2017 - 20:25
    +5

    Nope. It's just winter and prices are still ridiculous. When you see stories of people losing their homes, interest rates exploding and low clearance rates then you'll see what a real bubble explosion is.

    • whooah1979 on 06/06/2017 - 20:37
      +2

      Nope. It's just winter and prices are still ridiculous.

      wait six months and we'll be back at it.

  • [Deactivated] on 06/06/2017 - 20:46
    +2

    Technically, a bubble is over, when prices drop … no signs of a drop in Syd/Mel.

  • owli on 06/06/2017 - 21:02
    +2

    Suburbs in west Sydney have been compounding at 15%-18% p.a. for 5 years.
    You have some of the finest investment minds in the planet who can't make those returns, and yet we have fibro shacks doing it on leveraged bets.

  • dcep on 06/06/2017 - 21:05
    +1

    so when is it gonna drop by 50% ?

    a mere 10% correction won't cut it if the current median house price is 1mil.

    • [Deactivated] on 06/06/2017 - 21:11

      Would need multiple shocks - interest rate rise, unemployment rises, global downturn

      These forces need to be strong enough to overcome government intervention, ie allowing foreign ownership, increasing immigration, tax incentives for locals, bank guarantees.

      Black Swans do happen frequently enough :)

      • echelon6 on 08/06/2017 - 10:01

        Good. Ready for it when it comes.

        • [Deactivated] on 08/06/2017 - 10:54
          +1

          Ready for what? Picking the bottom is just as tough as picking the top.

  • [Deactivated] on 06/06/2017 - 21:09

    Ask Steve Keen he would agree…

    hzttp://www.abc.net.au/news/2010-02-16/economist-keen-to-walk-canberra-kosciuszko/333138

    And again…

    http://www.abc.net.au/news/2016-07-29/australia-headed-for-r…

    High prices are here to stay, 4-5 million more people added in the last 15 years that all want to live near Australia's coast, because most of the rest of the country is too hot and dusty.
    I left London 20years ago because it was too expensive, now it's ridiculous expensive… In general I believe Australia will be the same

    • [Deactivated] on 06/06/2017 - 22:36

      Happy sold your house too early anniversary, Steve Keen.

  • El Grande on 06/06/2017 - 21:16
    +2

    I don't know what people are talking about. Went to an auction on the weekend. Had 8 different bidders and 100+ people showed up. Property sold $250k over vendor bid and a new record for that pocket of Melbourne. It was a house built in early 60's so go figure.

    • eagleoftheeast on 06/06/2017 - 22:57

      I agree, I wait to several auctions the last couple weeks in Melbourne and and people are still paying 100K over the listing price.

      • El Grande on 06/06/2017 - 23:37
        +1

        100k? My friend went to buy an apartment in the city thinking apartment prices are coming down because people are dis-investing the first bid went past his maximum for that property and it sold $150K over the first bid.

      • jjjaar on 07/06/2017 - 08:34

        Well that's partly because the listing price and the reserve have no connection whatsoever.

        • El Grande on 07/06/2017 - 19:39

          First bid was above reserve. The agent said they were looking for 650-700k going into the auction. First bid was 700k.

        • tomclancy on 07/06/2017 - 21:41

          @El Grande:

          The agent said they were looking for 650-700k going into the auction.

          Who trusts what the agent says? They consistently underquote and it's a known strategy for getting more potential buyers to the auction.

        • El Grande on 07/06/2017 - 21:52

          @tomclancy: Yeah I know. But my friend wouldn't believe me. He reads too many newspapers and thinks a dip is coming. He has started going to 2-3 auctions on the weekend hoping for a bargain. Good on him I hope he finds something but doubt he would.

        • tomclancy on 07/06/2017 - 22:00

          @El Grande: Some people can't be convinced. Mind you, you can't find a bargain unless you are looking for one :)

  • Cluster on 07/06/2017 - 01:47
    +1

    The average house is said to cost well over $1M in Sydney today. The CBD still needs plenty of minimum wage retail, service, and hospitality workers. Does this mean all those workers are sharing houses with several others just to get by? How do they start a family? Or are these workers commuting 30, 40, maybe 60km one way every morning to go to work? if people spend 3 to 4 hours of their lives on public transport every working day, how long before they declare 'f$%k it, I quit' and the CBD is devoid of essential workers? The employers sure won't pay any more.

    Part of me wants to see that happen. It would be a fascinating experiment. What happens when the cleaners, McDonald's burger flippers, and junior restaurant staff are not there anymore?

    • whooah1979 on 07/06/2017 - 06:35

      What happens when the cleaners, McDonald's burger flippers, and junior restaurant staff are not there anymore?

      get a better paying job?

      • Cluster on 07/06/2017 - 12:14

        Those individuals can get a better job, but the positions still need to be filled by poorly paid workers.

        • whooah1979 on 07/06/2017 - 12:25

          These jobs are meant to be short term work. One, two or three years at most while at uni/Tafe and a graduate job. Anyone that takes jobs like this as lifestyle choice to live in or close to the cbd has been watching to much tv. Sydney or Melbourne isn't New York.

        • Cluster on 07/06/2017 - 12:51

          @whooah1979: My post stated the people who take these low paying jobs can only afford to live in cheap housing, or shared with quite a number of people to defer costs. If Sydney prices keep rocketing upwards these low paid workers will need to commute to CBD work for 3, 4, or maybe more hours per day. How long before this travel time becomes untenable and the workers refuse to show up?

        • whooah1979 on 07/06/2017 - 12:56
          +2

          @Cluster:

          the workers refuse to show up?

          These low paying cbd job has higher than usual turnover rate. There are plenty of fresh workers coming of age every year.

  • [Deactivated] on 07/06/2017 - 13:18

    Apartments will drop yes

    Houses no

    Land will never lose value

    • Kommyht on 08/06/2017 - 12:11
      +1

      Unless its land thats contaminated but the report is withheld to ensure property prices remain lofty

  • Chubbsmcfatflabs on 07/06/2017 - 16:00
    +1

    Im only going to comment on Melbourne as thats where I live.

    I think that in some locations the market will cool, but not in locations that have always been desirable. Eg within 8kms of the CBD.

    It seems that Apartments in the CBD have an oversupply, but not within that inner ring of suburbs so there will still be some moderate growth based around development of single dwelling locales into MDU's.

    There is a lot of property holders ( like myself) that bought in those areas 15 plus yrs ago that will do really well when it comes time to sell.

    My wife and I got into several properties before we got married ( 17 plus yrs ago..)and they are now worth 8-10 times what we paid, so happy days for us. The market would have to atomic bomb style implosion for us to not be in a good position come sale time.

  • redfox1200 on 09/06/2017 - 16:29
    +1

    theres been news articles every week for the last 15 years saying we are in a bubble….

    • mit on 14/06/2017 - 09:33

      This. I wish we were more like reddit and you could send this to the top.

      Even if there is a bubble to burst, in the longer term you'll gain more than what you lost. You only have to worry if you don't have a longer term to wait around for.

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