Will Average House Prices Fall over The Next 18 Months?

Boogerman on 11/04/2022 - 09:43

Will Average House Prices Fall over The Next 18 Months?

Borrowers should brace for a 15 per cent fall in home prices as interest rates rise, warns RBA
"Estimates using a model of the housing market that takes into account historical relationships between interest rates and both demand and supply factors suggest that a 200-basis-point increase in interest rates from current levels would lower real housing prices by around 15 per cent over a two-year period," the FSR noted.
https://www.abc.net.au/news/2022-04-08/reserve-bank-financia…

Why Aussie house prices will fall circa 20% when the RBA hikes interest rates
When you write about bricks and mortar, it inevitably attracts a lot of hyperbolic attention: you tend to be typecast as a preternatural 'bull' or 'bear'. To be clear, we are neither: our task is to simply try to accurately anticipate what will unfold. After explaining that Aussie house prices would have to correct by 15% to 25% if—-heaven forbid—-the RBA ever lifted its target cash rate by 100 basis points or more, some readers responded that they had never seen us predict price falls before….
…Assuming rates increase relatively promptly over, say, a 12 month period, we would expect national home values to decline by 15% to 25%. It is possible that the adjustment is smaller if the RBA moves more slowly and the value of residential real estate mean-reverts partly via household income growth over the effluxion of time. But our central case would be a circa 20 per cent decline after the first 100 basis points of hikes.
https://www.livewiremarkets.com/wires/why-aussie-house-price…

Financial market consensus (happy to link proof), including every single one of the big four banks, is for the first central bank interest rate rise to occur in the first week of June (not May because of the election, for fear of appearance of impropriety, which is a BS reason personally)

I'm interested to hear what people's opinions are & if the awareness of pending interest rate rises causes house prices to fall PRIOR to the actual rise (& hence the actual hit to mortgage repayments). FYI, fixed term interest rates by retail banks have already been increased.

Poll Options

  • 23
    Yes less than 5%
  • 47
    Yes 5 to 10%
  • 22
    Yes 10 to 15%
  • 123
    Yes Over 15%
  • 96
    No they will remain flat
  • 24
    No they will rise under 5%
  • 280
    No they will rise more than 5%
Financial

Comments

  • Some Human on 11/04/2022 - 11:14
    +6

    Yes, I’m sure homeowners everywhere will be lining up to sell their home at a 15-25% loss.

    • orangetrain on 11/04/2022 - 11:46

      Investors are not homeowners if they never rent it out

      • duchy on 11/04/2022 - 12:55
        +1

        Look at the vacancy rates - they are at a historical minimum.

        • Tleyx on 13/04/2022 - 10:12

          For rent prices that doesn't cover mortgage

          • Some Human on 13/04/2022 - 14:12

            @Tleyx: There’s too many factors involved to make that judgement. When they bought it. How much they put down etc.

            • Tleyx on 13/04/2022 - 14:46
              +1

              @Some Human: We all hear how much negative gearing there is . How is that possible unless a lot of people are on negative territory after rent. People are less concerned about losing money monthly when getting capital gains. If this changes they may choose to sell and invest elsewhere

              • BartholemewH on 14/04/2022 - 20:22

                @Tleyx: There isn't a lot of negative gearing, at least not in regional Australia.

                Source: Tax accountant.

    • ALesha77 on 11/04/2022 - 14:15

      Then you would not believe me if I told you what is happening in financial markets at 20% drawdown…
      And if you think (for a second) that property is different after en-masse government-sponsored financialization of real-estate sector - think again.

    • muzzamo on 11/04/2022 - 15:28
      -1

      prices are set by those who do sell, rather than those who don't.

      Plenty of people need to sell, and in many cases will be able to buy in a deflated market as well so it's not a concern to them.

      • ALesha77 on 11/04/2022 - 16:21
        +2

        Not exactly.

        In the long-run bull market that is still rising (and most participants are already in long positions), the prices are set by the next marginal buyer who still wants to bid for a higher price. As soon as those out - the market falls until they appear.

        In the bear market that is still falling the prices are set by next marginal seller who is eager to sell at the lower price.

        This why our douche-bag (strike that), sorry, genuinely caring government is trying so hard to drive the next marginal buyer in the market with 2% government guarantee deposits, different stimulus schemes like stamp-duty exemption and now NSW douches suggesting the government will "co-buy" (seriously?!) houses.
        All this nonsense is to keep the next marginal buyer coming in the market but this is truly appalling and too low now because now they target those people who can least afford to be in financial troubles - single parents, teachers, low-paid workers who get into 30-40-50 years mortgage prison.

        • serpserpserp on 11/04/2022 - 22:11
          +1

          But just imagine when battler single parent goes belly up on their mortgage and then gets their face in the media. Soon all those "Co-buys" will become "to big to fall" from a political stand point. Then they become a free house!

    • [Deactivated] on 12/04/2022 - 07:24
      +2

      Exactly. Houses aren't goods being produced on a factory production line that must be sold.

      If prices start dropping most sellers will choose not to sell. Supply will be withdrawn.

      Some homes will be sold for a discount in suburbs where demand isn't strong.

  • Jason Genova on 11/04/2022 - 11:33
    +4

    US is already predicting rates to rise to 4% in 2023, and people here think 2% wont happen in oz.

  • Typical16-bitEnjoyer on 11/04/2022 - 11:38
    -1

    That depends if the US joins in the Russian invasion of Ukraine. 99% we join if they do. Prices will freefall.

    • orangetrain on 11/04/2022 - 11:47
      +1

      Did house prices fall during Iraq War and Afghanistan War?

      • duchy on 11/04/2022 - 12:56
        +2

        No, the opposite happened. Doesn't prevent people from posting rubbish.

        • Typical16-bitEnjoyer on 11/04/2022 - 17:04
          +1

          Sorry, I should have expanded on that post. US joins, China joins, we join, China tiptoes over from the Solomons to us = prices freefall.

          • duchy on 13/04/2022 - 16:11
            +2

            @Typical16-bitEnjoyer: We will have much bigger problem(s) than house prices if China starts eyeing Australia.

    • Gratt on 11/04/2022 - 12:56
      +3

      Freefall. Unlikely. War will/ is causing higher prices. Higher prices Equals higher interest rates. Higher interest rates lowers the affordability of real-estate resulting in downward pressure on real-estate values.

      If in world war2 the rest of the world stood up to Hitler then house prices would not of fallen as far. Perhaps he should have been stopped when he annexed Austria instead of countries standing alone and falling one by one. If he was stopped in Austria perhaps the economic outcome would have been better not worse.

      The ethics of Europe buying oil and gas from Russia giving Russia the money to wage war on their neighbours is appalling. Europe has sufficient military to counter Russia at present.

      It only proves what a waste of time teaching history is. We really don't learn much. Europe is likely to sit on their hands while their states fall one at a time like in WW2. Then we will need to become in involved again and your dream of plummenting house prices will come true. Early intervention like in the first gulf war would have a relatively modest affectnon house prices.

    • pharkurnell on 11/04/2022 - 13:58
      +1

      Prices will freefall.

      You mean nukes will free fall…

  • rektrading on 11/04/2022 - 11:41
    +1

    Is the sky falling or is it the whales that are saying that it's about to fall so that they can swallow up all the cheap assets?

    The best time to buy is when all the plebs are running for the exit.

  • dmcneice on 11/04/2022 - 11:50
    +1

    I recently just got a fairly large mortgage.

    I personally think houses will drop about 10-15% depending on the area.

    Interest rates will definitely rise - how high is difficult to say. I can't see them rising them more than 2.5-3% in the next 2 years though. I think people forget that it has flow on effects to other areas of the economy, which does limit how high they can push it, especially when wage growth isnt keeping pace.

  • Trying2SaveABuck on 11/04/2022 - 12:23
    +8

    i feel like every 2 months i read housing prices are going to crash only for the next month to have an article about how house prices are skyrocketing.

  • ALesha77 on 11/04/2022 - 13:00
    +35

    Funny poll results - majority said No, and most said prices will rise.
    This is disturbing and I see people really don't understand the market and government forces at play and how these have collided for the first time in the past 15-20 years.

    In short, there is no way out of this mess other than:
    1. rising rates and risk tripping the economy with ALL big ticket items falling in price and staples getting back in black
    2. RBA dragging their feet (as they have been) and tripping the economy through high inflation / low levels of confidence and business activity with ALL big ticket items falling in price and staples getting back in black
    3. Combination of 2 and a lot of fiscal stimulus on top of it "to alleviate rising prices pressure" which will spiral into hyper-ifnlation crashing the economy with ALL big ticket items falling in price and staples getting back in black in an even quicker and more brutal way than option #2

    Sadly, there is no good way to deal with the monetary and (lately) fiscal mess from the past 15 years of monetary easing.

    Upvote this post if you are interested in detailed explanation of the above.
    Reading through some press reaction to the RBA statement, it is all about crystal ball and "saving big dream Australian dirt-buying" emotions and no-one really explained the options that RBA and any future government will have.

    • GourmetFoodie on 11/04/2022 - 14:14
      +5

      A+ analysis.

      I agree completely. I cannot see a way out of this mess that doesn’t involve pain.

    • Boogerman on 11/04/2022 - 14:45
      +4

      If anything the pandemic has shown how wilfully ignorant people are, that experts don't matter & how they think that because they have a mouth & typing fingers their opinions equate to an expert. Ugh.
      "Anti-intellectualism has been a constant thread winding its way through our political and cultural life, nurtured by the false notion that democracy means that 'my ignorance is just as good as your knowledge." - Isaac Asimov

      • leelemon on 11/04/2022 - 14:57

        that experts don't matter & how they think that because they have a mouth & typing fingers their opinions equate to an expert.

        lol so there is this guy who drives a mustang…

    • leelemon on 11/04/2022 - 14:53

      So, with the chance of what you are saying is right - is there anything we can do to mitigate pain?
      e.g
      ~convert savings to a foreign currency
      ~sell house now and buy after it crashes
      or do we just invest in canned tuna and watch the world burn?

      • ALesha77 on 11/04/2022 - 15:07
        +5

        Can sense lots of sarcasm but that's OK if you are really interested.

        There are other markets apart from real-estate. Some people will find that out a hard way similar to what recently happened in China (and many other places before).

        If you are not good at timing the market, there is no sense in selling you primary residence.
        If you are an investor and have not existed already - you must have either a VERY LONG term investment strategy or balls of steel. I envy both (as I have none of those attributes) but would not want to be in your shoes for the next few years.

        Commodities and currencies are the way for me to play the next year but I am no "investor".

        • leelemon on 11/04/2022 - 15:24

          Apologies - I was just joking about the tuna and I am genuinely curious at what you thought.

          If you are not good at timing the market, there is no sense in selling you primary residence.

          Commodities and currencies are the way for me to play the next year

          That makes sense.

          next few years.

          So this is going to be a thing for a while… That is concerning.
          Thanks for your response. I look forward to your detailed explanation (if you are doing one).

          • ALesha77 on 11/04/2022 - 16:39
            +3

            @leelemon: Yes, I will post tonight while waiting for the US markets to open.

      • idonotknowwhy on 12/04/2022 - 11:08

        If you're concerned about the Australian economy specifically, you could invest something like ASX:VGS
        It's held in USD and excludes Australia completely.

    • ALesha77 on 11/04/2022 - 20:05
      +1

      New topic was created here - https://www.ozbargain.com.au/node/694076

    • FlyingMiffy on 11/04/2022 - 23:42
      +1

      I'm not sure I agree with your read. Market and Government forces are more than just interest and cash rates. Monetary easing is but one lever to shift supply and demand economics in an economy that is multi-faceted. Population movements, terms of trade, labour availability, environmental factors, consumer/business sentiment, taxation policy etc are all in the mix. Different permutations of these will offer quite a few more than your 3 options 😉

    • mini2 on 13/04/2022 - 08:55
      +1

      You forgot about the stagnant wage increase.

  • Drakesy on 11/04/2022 - 13:14
    +5

    And the losers out of everyone callously getting up to their eyeballs in debt and taking out the government backed 5% deposit first home owners loan?

    It won't be them
    It'll be the savers and future generations who watch their home deposit evaporate for the sake of those who thought a $1 million mortgage was a smart idea

    • ALesha77 on 11/04/2022 - 13:46
      +3

      Nah, it won't be that easy for anyone on all sides of this trade but Yes, inflation will eat up a lot of buying power if that is what you meant.

      Savers, however have been in a dog-house for YEARS now (if not a decade) - I am not sure who is their right mind keeps lot of money in their bank account?
      An this is exactly where government fiscal hit a wrecking ball on fragile balance of disinflation-inflation and huge debt on both sides will have a big role to play in what is coming.

  • GourmetFoodie on 11/04/2022 - 14:13
    +4

    I 100% believe they will fall. I literally don’t know how some people are even managing to pay what they are paying as it is. Either bank of mum and dad or they are in debt up to their eyeballs.

    • Jason Genova on 11/04/2022 - 15:22
      +1

      they bought the top

    • Some Human on 11/04/2022 - 22:24
      +3

      You would be surprised how many people don't actually care about whether or not they pay off their house. As long as they have a roof over their head that's not in someone else's name, they're happy to just pay the bare minimum. And after a few years, they can refinance the loan for another 30 years, making the repayments smaller.

      • [Deactivated] on 12/04/2022 - 11:58
        +3

        Their strategy has benefited them for the last 30 years, and now they are buying houses with all the equity that the 'responsible' ones will never be able to afford

  • El-Rhi on 11/04/2022 - 17:41

    If rates go up, borrowing capacity goes down so prices should either stabilise or fall slightly (5-10%). I personally don’t think rates will go too much above 1% before the next economic shock caused by high inflation and high debt levels hits us, in which case the RBA will drop rates back down to 0.25%

  • Lunarboogie on 11/04/2022 - 18:55

    A couple of observations. In a majority of cases, people have enough financial head room to withstand the expected rate rises without having to spark a fire sale. Any losses will be on paper and temporary. And at worst case, if there is a reduction of 10 per cent in the price of houses, for most of us, this will take us back to September 2021. I can live with that.

  • serpserpserp on 11/04/2022 - 22:18
    +3

    So many people believing RBA rate going to 1-2% in the next 12 months etc. It would be a miracle if it got to 0.5% by 2023.

  • Weezle on 11/04/2022 - 22:23
    +1

    I think they will mostly remain flat, however there may be some pockets of each market that do drop down.

  • virhlpool on 11/04/2022 - 23:05
    +3

    With nearly 65-70% home ownership in a country, what poll results would you expect to such a question? How many home owners (as a % of total) ever said in the history that price would fall even when they actually fell in the past? This question always involves a great amount of emotions and sentiments. Not many people have skills or guts to keep emotions aside and accept what's rational and likely. I or you are no exceptions, let's be honest.

    Always be wary of this type of people though (and their existence is global) - those who say "real estate prices never fall and the timing of purchase doesn't matter". They have no freaking idea. They are either ignorant and living in dreams or haven't seen enough property cycles.

    Also, if someone tries to convince you that Australian real estate market is 'different' or 'special' to those of other countries, stay away from them too. Not many people in NY or LA believed that prices can fall as much as 40% but 2009 changed their mindset for good. No country is special.

    You will find many people hitting back at you with the argument "property prices in Australia cannot fall, otherwise it will push the country into a recession". Ask any reasonable economist and they will tell you that this statement is so wrong on multiple levels. How about "War will never happen in the world because it will destroy a country or two?"

    Lastly, the favourite argument of many, "pollies and bureaucrats own so many properties, so they will never want prices to fall". Partially true, they may never want prices to fall (so do we all) but what does this wishful thinking have to do with the actual market forces? Market doesn't act in a way some people want it to. If that was possible, then property prices would never fall anywhere because pollies always own heaps of properties, ay. No matter which country.

    Highly recommend reading this write-up by @ALesha77 if you haven't.

  • [Deactivated] on 12/04/2022 - 06:36

    Houses don't go down in price, son. You're a few footy seasons short of a life experience me thinks. Try writing a really nice letter to your bank and ask them to keep a house aside for you and hold the price. It's a little know technique.

    • AlanHB on 12/04/2022 - 09:34

      In my suburb they've already gone down about 200k from their height last year.

      • [Deactivated] on 12/04/2022 - 09:50
        +1

        Unlikely. Unless they were grossly overvalued. Or a volcano popped up overnight

        • AlanHB on 13/04/2022 - 09:05

          It's what happened. Whether you consider them "overvalued" or not, the value was pushed up by demand outweighing supply - there were a lot more buyers, and a lot less houses for sale.

          Fast forward a year, many of those who were looking to buy have already bought, and there's less buyers per house. As a result, the average house sale has dropped by $200k.

          It should be noted that this $200k drop still brings the average house to about $200k above where the costs were before covid, but that's how goes.

      • nascar77 on 13/04/2022 - 00:17

        flood?

        • AlanHB on 13/04/2022 - 09:05

          Provided a response to the other comment above - less buyers per house.

  • HelpMeiCantSee on 12/04/2022 - 08:32

    I see two possibilities- relatively flat with little drop, and smaller bumps- people like the idea of being “worth” a million bucks.

    Or (what actually needs to happen) is a significant and devastating crash leaving way too many people destitute (I hope this doesn’t happen).

    • rektrading on 12/04/2022 - 09:05
      +2

      The latter is how the market separates the smart 💵 from the 🐏.

      A cascading liquidation is needed to shake out the short term 🥬 🙌 tourist speculators to reward the long term 💎 🙌 high conviction 🐂.

      I don't 🙏 for later to happen, I prefer it to happen.

  • DarkOz on 12/04/2022 - 08:56
    +1

    This is a government run ponzi scheme where the government sets the demand to be always much higher than supply. Unless this gigantic bubble bursts the price will always be steady and moving up.

  • Waltervp on 12/04/2022 - 08:58

    Wait till we have tenancy protection and tenants can get indefinite leases and be protected from rent increases beyond CPI. Then the market will slowly stabilise and we will be doing something about homelessness and home affordability. Half the homelessness is related to tenants rents going up unreasonably or tenants being kicked out and not able to find another home.

  • Brianqpr on 12/04/2022 - 09:37

    They probably will fall, given that interest rates will rise to some extent. How much is very hard to tell.

  • varunynr on 12/04/2022 - 09:40

    Hi OP,

    I didnt read through the entire comments but thought to share my views with people following the thread. I dont believe prices would fall though, not atleast in areas where one would like to buy. We were in same predicament in March 2020 when CBA predicted upto 33% fall only to realise people putting off sales and loss of houses in the market. It didnt really make a dent in price, just that the amount of houses in the market to select from were quite less. This was melbourne and we ended up buying which in hindsight was a good decision. Average median may drop down but thats averaging of lot of house in lot of suburbs. The market commentary is a bit of gimmick with everyone making guesses. I had an email from someone saying house price drop upto 87%. I dont pay attention to those click baits anymore. Anyways good luck to anyone who is buying. Thanks

    • Boogerman on 12/04/2022 - 11:34
      +1

      "We were in same predicament in March 2020 when CBA predicted up to 33% fall " - false equivalence
      A 1 in 100 year worldwide event resulted in a once in Australia's history money printing & government handout event that lead to the greatest ever addition to national debt

    • Cluster on 12/04/2022 - 21:07

      Someone is busy downvoting all posts that don't subscribe to the 'doom and gloom', property prices are about to fall world view.

      I would prefer people argue the point instead of hiding behind anonymous down votes.

  • 2esc on 12/04/2022 - 10:24

    I'm more inclined to believe prices will stablish on average. Cheaper areas to increase in value and some of the more expensive areas will drop.

    Rent is usually a percentage of the property value although that percentage value return to the landlord has dropped over the last 20 years. The actual rent paid by the tenant has increased because the overall value of the property. Both landlord and tenant are worse off than 20 years ago although the tenant is experiencing more stress.

    Some people are saying renters can just say no to paying high rents but that's not realistic if they have no cheaper options or ability to get a loan to buy a home.

    I consider myself very lucky to buy my house 15 years ago my only regret is I didn't buy 25 years ago.

  • erasimos on 12/04/2022 - 10:37

    Elections slow the market.

    If there is a threat things are going pair shaped the smart money will start dumping once Labor is in and the shit will hit the fan in a year or two.

    That was what was going to happen in 2008 except Rudd/swan created thousands of public works jobs.

  • mdavant on 12/04/2022 - 11:05
    +1

    I still see 14 year old realestate agents in suits and BMWs

    Let's see how they are going in 18 months

    • JelIyfish on 12/04/2022 - 21:07
      +10

      I've run the modelling and they will be 15-16.

  • mdavant on 12/04/2022 - 11:06
    +1

    It comes down to access to funds.

    Interest rate increases mean people borrow less so obviously prices will fall.

    A bit like how leveraged middle class welfare lead to huge increases on property prices.

  • amazonaddict on 12/04/2022 - 11:49
    +1

    I bet it will go up.

    Houses in west are sold at 1mil to 1.5mil. Loan amount would be like $700k to $1.2mil. From my observation, average income of a household in west is like $200K. Take home per month is $11K.

    Say the home loan interest rate rises to 5%, then mortgage will be $5500. Say Other monthly expenses are $3500. So, families will still have $2k savings per month. If there is massive inflation, it might eat up a small chunk of that savings. That’s all.

    I have no idea why people are expecting house prices to fall. If it should fall, It should have already happened. Buys have already priced in the interest rate hikes, and incoming migration.

    I know few of my friends with company setups, who went through mortgage brokers and got mortgages that are 90% of their income. They bought properties in Hills region and Westmead for $2mil+. (They even paid extra tax to show banks that their company is making needed money) I’m sure they will face some difficulties, but they are a very small percentage of the borrowers.

    So, prices will continue to go up another 10% this year. That’s my thought.

    • mdavant on 12/04/2022 - 13:59
      +1

      How can you borrow the money to fund a 10% increase when the banks will lend less as interest rates are increasing and wages growth is non existant

    • Jason Genova on 12/04/2022 - 14:31
      +2

      they bought the top, trying to keep up with the joneses

      will be very interesting to see what happens. my conservative prediction is 2.5% interest rates, whilst prices remaining flat

  • Myone888 on 12/04/2022 - 13:50

    It’s a mis management of economy with all these wild swing in interest rates, house prices increments and lastly govt printing tons of money.

  • Cluster on 12/04/2022 - 14:31

    Remember when the pandemic was meant to cause a 30% fall in house prices? Instead, prices in many markets increased by 30%.

    Financial forecasters are like psychics: they quickly ignore their missed predictions and really hype up the few occasions when they get something right.

    Are we going to continue seeing double digit growth over the next few years? No. But do I expect a significant fall in prices? No. Unless someone bought overpriced housing in a mining town where the mine is about to be shut down, Australians will do absolutely anything to resist forced selling of their home for less money than they paid.

  • daclaw on 12/04/2022 - 16:44
    +2

    Property has already started flatlining in Melbourne and Sydney, not sure about other markets.
    It's not going further up from what I can see, small drops to flat for the next 3 years or so would be my guess.

    • Fobsessive on 12/04/2022 - 23:58

      Reasonable guess with Sydney property prices

      • mini2 on 13/04/2022 - 08:57
        +2

        Money flowing from Melb/Syd to regional. Last I've looked at prices in Ballarat and I was like FM I should've bought some there.

  • Littlevu on 12/04/2022 - 22:30

    I wonder how many people want historical low interest rates and then complain about the rising cost of everything? Raising interest rates is to curb that inflation.

  • pogichinoy on 13/04/2022 - 01:14
    +1

    For Sydney:

    It’ll be like the GFC. Properties in blue chip areas will lose the most in nominal value, but homes in the West and lower socioeconomic areas will lose the most by percentage of the property value.

    It’s already evident that most of the West and lower socioeconomic areas have the highest percentage of home owners in mortgage stress.

    When rates rise, these will be the first to go as most people in this area cannot afford to take heavy nominal loses as they don’t have much assets as collateral for their properties. But who wants to live in these areas? I sure don’t.

    In order for me to be in trouble, prices would have to drop by 50% and rent drop by 50%. New homeowners will get hit hard first, but those who’ve had their neck in the game for a while, and haven’t over leveraged, will be fine.

    The govt will always have something up their sleeve to kick the can further down the road.

  • jaimex2 on 13/04/2022 - 06:58
    +2

    Canada just banned foreign investment for the next two years so guess where they will be going.

    • mini2 on 13/04/2022 - 08:56
      +1

      Yeah, except they've allowed PR to continue buying real estate. Would be interesting if they go the whole hog and ban PR from purchasing too.

      • bigbadboogieman on 13/04/2022 - 09:34

        Why would they ban permanent residents from buying? That would just be stupid given that most PR holders are highly qualified migrants doing well in their economy and pay their due taxes. Most of those people usually end up becoming citizens anyway.

      • rektrading on 13/04/2022 - 09:59

        People migrate to 🇨🇦 for better opportunities. Better jobs, better facilities, a higher standard of living and investment options.

        Banning PR from investing in real estate will drive them away. They'll move to where they're treated best. They'll take their skills and money with them.

        🇨🇦 will lose tax revenue and skilled workers.

        This isn't a shill for 🇨🇦. Their freedom of peaceful assembly and due process blows.

      • NigelTufnel on 13/04/2022 - 10:00

        The bigger issue is that they still allow corporations to buy homes, and done nothing about vacant housing. So all a foreign investor needs to do is set up a Canadian shell company and buy the property through that. Satirical article on the issue.

  • bigbadboogieman on 13/04/2022 - 09:31

    What I noticed when the prices went down, the good properties (that I was interested in) disappeared plus the bad ones which I wouldn't even inspect normally would have alot more competition.

  • [Deactivated] on 13/04/2022 - 10:37

    Everything me has borrowed more, unfortunately even people building where cost hikes have been passed on from the builder.

    Not everyone has put themselves in a bad position by choice, plenty have been caught up in it.

  • countingbubbles on 13/04/2022 - 10:47

    I'm genuinely surprised that almost 50% of people think that prices will increase over the next 18 months. Either recency bias from the 2020-21 melt up in asset prices more broadly or people are over invested in property (or combination of both). Interest rates are rising AND global liquidity is falling. Not suggesting house prices are going to nuke but tightening monetary policy and squeeze on liquidity shouldn't be ignored.

    • rektrading on 13/04/2022 - 10:56

      The US CPI is +8.5% while 🇦🇺 is +3.5%.

      People who hodl lots of fiat 💵 are seeing it melt away. They'll find "safe" assets like real estate and pamp the fiat into it.

      • dtc on 13/04/2022 - 14:00

        its only a 'safe asset' if it holds it value. Inflation at 3.5% and getting 2% interest is still better than buying property and having it drop by 10%. I actually suspect a lot of people will rush to secure bank/bond/deposits at 3 or 4%, if we get to that, even if its under inflation, because 3% secure return is not something we have seen for quite a while and it seems pretty good. Thus dragging money away from other investments

        • rektrading on 13/04/2022 - 14:05

          Give me an address in a major city in Australia and I'll find data (if it exists) that shows its value has been going up to right in the past 100Y.

          The most successful investors in the world don't flip hard assets on a 5min chart. Their time horizon is +10Y.

          Retail investors have to stop focusing on short term dips, 🔍 out and look at the big picture.

          • dtc on 14/04/2022 - 20:27

            @rektrading: No one invests on a 100 year time frame

            You can always check out house prices between 1880 to 1955. Or 1975 to 1985. Or 1990 to 2005. You may be surprised at the lack of ‘up to the right’ for quite prolonged periods. Historically the last 20 years is a big anomaly in housing prices

            https://www.business.unsw.edu.au/research-site/centreforappl…

            • rektrading on 14/04/2022 - 20:44

              @dtc:

              No one invests on a 100 year time frame

              I know real estate/landowners that have hodl for +3 generations.

            • MarsTitan on 14/04/2022 - 20:56

              @dtc: It is an engineered anomaly. Primarily driven by artificial grown via immigration. It has been the case with high immigrant nations: Canada, Australia & NZ.

              In countries with high immigration, it will remain so for while. Until the world reaches an equilibrium (say in 100~200 years). When world economies and population are homogenous then the property will follow only normal growth equivalent to natural population growth with few local variations (closeness to CBD/infrastructure etc.).

      • Tleyx on 13/04/2022 - 14:54

        Guess where we borrow out cash from?

        • rektrading on 13/04/2022 - 15:56
          -1

          Australian banks aren't required to hold a fractional reserve. They have a licence to give out as many loans as they want.

  • ChupaCabra on 13/04/2022 - 11:16
    +3

    Has anyone else considered moving to another country purely because housing is so much cheaper? Australia seems to get worse and worse with no major political party doing anything to make it better.

    • jaimex2 on 13/04/2022 - 12:26
      +1

      Labor tried twice and lost elections because of the media fear mongering. They won't be touching that again.

      As for moving, there's not many good places to go. Housing affordability is a problem in most places people want to live.

      You can move to a smaller city in Australia.

      • amazonaddict on 13/04/2022 - 15:31

        What about USA? You get hood houses for really cheap. Good country too..

        • michaelTito on 13/04/2022 - 17:25
          +2

          Get shot on your way to open home.

    • pogichinoy on 13/04/2022 - 20:08

      Pondering it.

      But NYC is more expensive. LA is more expensive. Chicago is a death trap. London is more expensive. Paris is more expensive. Stockholm is about the same. Shanghai is more expensive. Beijing is more expensive. Singapore is more expensive. HK is more expensive.

      Wifey doesn't fancy having to study again to be certified as a nurse in a different country, nor is she keen on having to learn a different language.

      • [Deactivated] on 14/04/2022 - 13:36

        So basically if you want a similar quality of life city as one in Australia, you need to pay about the same…

        If you don't rely on the local employment market then there are many more opportunities, southern and eastern Europe are very cheap compared to what we are accustomed to

        • pogichinoy on 16/04/2022 - 01:37

          Central Europe too. Poland has been used as a hub for cheap labor.

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