Do you see any drop in property prices as yet?

virhlpool on 15/07/2020 - 14:41
Last edited 15/07/2020 - 15:31

I agree with the general consensus that with so many businesses slowing down and some unfortunate job losses as well, in addition to other reasons related to immigration etc, it's quite unreasonable to expect property prices to hold up. However, barring the aggression in sale of some off-the-plan developments' (typically apartments and H&L packages) and possibly some discounted sale in those segments in Sydney and Melbourne, I personally don't see a major drop in the established city areas as yet. Sellers aren't dropping the price as much and the properties are still selling though with a longer time in the market. It is a good sign for the general economy, but I fail to understand how so many people are still able to access home loans and also have strong serviceability, pretty much like pre-Covid times despite all the damage that pandemic has made to our economy.

Rental market is slightly different though - particularly in high-density apartment areas the rent seems to be going down a bit but again, not very significantly for not-so-old apartments in well-connected pockets. Being realistic, 10% drop in rent isn't a significant one considering the economic situation. On the other hand, if you see rents going down more significantly (indicating even lower rental yield), then it should reflect on the prices of the properties as well but it doesn't seem to. This is just my observation and I could be wrong but do you see the same trend in areas around you? It will be interesting to hear your views.

PS: A few early comments suggest that there is very low stock for sale in the market at present, barely enough to see the real impact. I agree. It indicates that there's no major stress though, opposite of what one would predict of the current situation. If banks extend loan repayment freeze beyond 6 months, the current situation may continue I reckon.

Btw, I am not a seller, nor a buyer yet either. Just a layman here who likes to observe the economy around with unbiased and realistic eyes - you never know which opportunities it may throw at us.

Financial

Comments

  • GG57 on 15/07/2020 - 14:55
    +9

    Are there even enough property sales to make valid determinations from the data?
    The volume of listings seems to be very low, and probably too early (as we are still in the midst of the restrictions etc.) to know the full impacts.

    • locknuts on 15/07/2020 - 15:43
      +1

      Great point. We always seem to see people pull their properties from sale if they suspect they won't get the prices they want. For prices to truly drop, a lot of people would have to be absolutely desperate, and I hope that doesn't happen.

  • soan papdi on 15/07/2020 - 14:59
    +11

    Not sure about a price drop but I have a noticed a number of properties that get passed in with a vendor bid. For example, property advertised at 500-550k, auction starts and bids reach 545k or so, agent puts in a vendor bid for 550k and passes it in. Then a negotiation happens indoors with many times, the price being withheld but marked as sold.

    If I could wish for ONE change in the property market it would be to advertise a reserve price at least 2 weeks prior to an auction. If reserve changes, postpone the auction. The auction starts at the reserve price. This will quickly put a dent in prices when people see what the seller really wants for a house. Not to mention saving time for buyers. I can dream…

    • sangohan on 15/07/2020 - 20:04
      +2

      it's in the interest of the agents (and the seller) to hide prices that are low, and display sold prices that are high.

      • soan papdi on 15/07/2020 - 20:44
        +5

        Yeah but that's not fair. There's an asymmetry of power. Tenants and buyers have no access to the data. Imagine going to a supermarket and finding out that bread is $3-3.5 someone offers $4 and they get it. I find the whole thing ridiculous. /end rant

        • virhlpool on 16/07/2020 - 01:33
          +3

          I think after a few weeks they have to reveal the price and therefore you can see prices of ALL properties on websites that were sold a few months back. However, I agree that prices should be available immediately with no option to hide.

        • MrBear on 16/07/2020 - 15:18

          What's fair got to do with it?

          It's an auction and inherent with risk.

          • soan papdi on 16/07/2020 - 15:36
            +3

            @MrBear: The fairness I refer to is the fact that sellers are able to hide their intentions and buyers waste their time bidding and checking properties they likely cannot afford. Why is it legal for agents to quote a house at 500-550k, yet put in a vendor bid at 550k before passing in the property? Clearly the reserve price is more than what is quoted. Why is it not a legal requirement to display the reserve price when putting up a house for sale?

            We don't do this with other forms of investments. Imagine seeing shares on ASX with sell price of $10, offering $10 and it getting turned down because they want more. How about goods in the supermarket? All political parties are scared to touch real estate because anything that makes prices fall will cause them to be voted out next time.

            • MrBear on 17/07/2020 - 14:35

              @soan papdi: Well 550k could have been the reserve price and it was listed in the quote "500-550k". The intentions were very clear when they put in a vendor bid at the top.

              We do this with many other things. eg It's like going to buy a private used car (or even a new car from a dealership), you're going to offer less than what is advertised and the owner/dealer isn't going to let you know their bottom number. Just the opposite. Why can't the price be the price?

              Because this is the real world and things have a value to one person that has a different value to another person and there is a negotiation involved.

              It just sounds like you don't like the negotiation. I don't like it either, but I understand it.

              • soan papdi on 17/07/2020 - 14:54
                +1

                @MrBear:

                The intentions were very clear when they put in a vendor bid at the top.

                If 550k is the intended value, why not start the auction at 550K? Why can't the ad say Offers below 550k will not be accepted? I completely understand a seller wanting as much as possible and a buyer wanting as low as possible. My issue is with setting expectations wrt the minimum price.

                We do this with many other things. eg It's like going to buy a private used car (or even a new car from a dealership), you're going to offer less than what is advertised and the owner/dealer isn't going to let you know their bottom number. Just the opposite. Why can't the price be the price?

                With private used cars, it's the opposite! Say the seller wants 10k. If I offer 10k, you think he's going to put in a vendor bid for 11k? Of course not. He's going to take my money. With the seller setting expectations at 10k, I am free to negotiate down if I wish or pay what he asks. This is the buyer's choice.

                This kind of negotiation is not possible with housing because neither the dream amount the seller wants (upper limit) nor the minimum amount they will accept (reserve price) is known to the buyer. That is predatory behaviour on part of the seller/agent. I surely don't expect a home seller to announce their dream amount to the buyer, that's just crazy talk. However, letting a buyer know what minimum amount they want is not unreasonable at all.

              • haemolysis on 20/07/2020 - 14:08
                +2

                @MrBear: Publishing a maximum sale price you will not honour is not “negotiation” - it’s a dodgy marketing tactic wasting everyone’s time. In any other market we call this false advertising or “bait and switch” and it is illegal.

                If it is “very clear” after putting in a vendor bid, then it is “very clear” their decision to advertise a lower value is deceptive.

                It’s one thing to say “offers above x considered” but stating “offers between x and y” and not actually accepting anything in that range… is absurd.

  • dstar012 on 15/07/2020 - 15:00
    +2

    There are so few up for sale at the moment which, anecdotally, has even caused prices to slightly rise in the suburbs I am looking in (<900K Bayside VIC). There are some shit places at seem to linger but even they are eventually selling with maybe a 5% discount.

  • DannyC on 15/07/2020 - 15:13
    +1

    It is what you'd call a Buyers market. But I have not seen drastic falls in the property market that some analysts have predicted… what 15-25%… I seriously doubt it. There are still plenty of buyers out there and with less property supply and less competition in the market. There is a chance that people are scared off and holding off selling. With the prospects of Job Keeper/Seeker ending there will be more people out of work and businesses hurting, but I do think that'll be extended.

    My view is there will be a slight downward trend in pricing but nothing too major to crash the prices. And with interest rates at an all time low, many are seeing an opportunity to buy.

    From my own personal experience, we decided to sell after our tenant didn't renew their lease, we might have waited but decided to just go for it, we would have went to Auction but due to COVID, we were offered a decent price for what we wanted for the property by a family who inspected it the other week.

    • virhlpool on 16/07/2020 - 01:35
      +1

      but I do think that'll be extended.

      Extending the repayment freeze or allowances isn't the solution to distress though. It will eventuate at some point, which can't be avoided.

      • DannyC on 16/07/2020 - 08:30

        Extending the repayment freeze or allowances isn't the solution to distress though. It will eventuate at some point, which can't be avoided.

        Totally agree with that sentiment, I do think it is more of a "band-aid" remedy but the Govt really does not have a choice but to pump money back into the economy. As PM Sco Mo said the other day, a total eradication strategy of total lockdown is not possible due to community transmissions and will do more harm than good. If Victoria goes into Stage 4 Lockdown, see how this effects the Real Estate market here in Melbourne for the short to medium term.

  • futureminime on 15/07/2020 - 15:15
    +2

    I have been looking to buy for quite a while - in our area the listing volumes are waaaaay down, with some discounting but less than I expected. I expected ~0% to -5% on good quality, up to 8-12% on quirky properties, in my mind a drop down to the last low from ~2018/2019. The government support and mortgage holidays are doing well and really there is no need for people to see in the weak market. There is still finance flowing and we are in the end looking for a property we like (and that we can afford). I'm sure its the same for many more buyers. If there was a bargain we would take it but supply vs demand seems to be playing out as you'd expect at the moment.

    Depending what extensions get put on for the end of September we may see a few more listings as people hedge by getting out earlier rather than risking more but there will be no crashes in Sydney or Melbourne (not in the 20% to 30% range some economists have been spouting). Even if you strip off 20% and draw the new growth curve for the last 20 years its a blip in the water.

    I'm expecting spring sales demand to hold it steady at least until summer max 10% drop from the peak, bottoming in the ~Feb March April 2021 quarter. Might have already hit bottom with a few % drop that seems to already have come through. Flat through 2021 and then back to the crazy 10%+ growth through 2022, 2023.

    • virhlpool on 16/07/2020 - 01:41

      Don't you think apartments' over-supply and continued lack of rental demand will play their roles in keeping the pressure on the overall property market? Remember, a lot of apartments and houses are still under construction.

      • neirboca on 16/07/2020 - 14:56

        Short answer - no. Long answer - still no.

      • futureminime on 11/09/2020 - 12:40

        Hey! Only just saw the reply.

        I disagree with neirboca below, although I think he is answering a different question to what you asked. It will definitely keep pressure on the overall property market. I don't think it will be enough to tip the scales, but should weight it down cause some damage. Neirboca I think is referring to the statement that there is an over-supply. Both in the short term (1-2 years) and long term (5+ years) the market supply/demand will adjust.

        apartments' over-supply and continued lack of rental demand will play their roles in keeping the pressure on the overall property market.
        As I said to boostpak below, the drop in migration (including students/long term tourists)

        Remember, a lot of apartments and houses are still under construction.
        If the developers still have the cash to finish construction and the new properties enter the market they still have a lot of options before they need to sell the complex at a loss. General tricks include selling a small number to cover your servicing. This is hard with a small demand but rather than selling at a lower price you offer rebates such as covering stamp duty and paying the first year of mortgage repayments. That way when the market recovers you already have a benchmark of what the units should sell for X in the weak property market + % growth.

    • boostpak on 11/09/2020 - 08:56

      future - we are now in September and Melb is still in stage 4 lockdowns with a long road to recovery.
      This has a ripple effect on the whole of the Aus economy. What are your thoughts now about a few percent only drop and it hitting bottom in July? Spring has started and it looks worse than ever.

      I think the worst is yet to come, once Job Seeker and Keeper get lowered people are going to be in a more difficult position. Also banks have already started contacting those who had mortgage repayment holidays to start repaying. Of course another bandaid will be applied, but I think it's been 6 months now, even with a bandaid it will be even tougher and we will see further price falls. A 5% drop doesn't even see us getting to 2018 house prices and we are in the worst economic situation not only country wide but globally!

      Something has to give, you can't keep pumping money and not see some sort of pull back. The more money they pump, the more the dollar devalues. NOT GOOD for all here. I think property is so highly over inflated (past 10 year growth per year has just been ridiculous and too high per year) that a pull back would be fine and actually bring back a better true value to brick and mortar, instead of devaluing our hard earned money. Australians have some of the highest household debt in the world, that is scary. Interest rates are at all time lows, but stills scary.

      • futureminime on 11/09/2020 - 12:28

        Hey BoostPak,

        I still am backing in my numbers above at this stage, but I agree that the overall risk level is very high. I think I've called the bottom wrong, but we will see. Real estate always has had a lag behind other economic shocks, but is quite resilient.

        I was reading a review yesterday about the . From a real estate so take with grain of salt.

        https://www.salibaestateagents.com.au/migration-housing-dema…
        TLDR: Drop in net migration ~200k people in FY20/21. As ~70% of migrants are only here temporarily he suggests a larger impact would be on the rental market. This could have a flow on effect with investors selling. Noted the drop in auctions for Melbourne due to the lockdowns.

        This has a ripple effect on the whole of the Aus economy.
        Global Economy as well, no idea how local investors will want to balance their risk profiles. Serviceability is certainly the main concern but property may still be seen as a solid investment compared to more volatile investments.

        Of course another bandaid will be applied
        This is the crux of it for me. I think there will be enough band-aiding to hold everything together. The real question is how many people will be forced into selling.

        I think … that a pull back would be fine and actually bring back a better true value to brick and mortar
        This 100%, and I think the reserve bank and the government would be very happy with a deflation to the property bubble. I personally would really like that. The last little blip however showed that's not what the market thinks. To force the hand of the market would require a considerable tightening of credit, the drop in housing values would cause economic damage through the drop of spending with a drop in household wealth. The trouble I think we run into is modelling what would be the path of logic and least resistance, rather than the path of most resistance.

        All in all I've had a look at both extremes - What would be needed for either stubborn continued growth or a market crash. I don't think there is enough factors to push it in either direction. Sure, there is a lot of risk around price falls, but too much reliance on real estate in Australia for the government to let it happen. TBH I think we'd need a 3rd wave in Vic and a 2nd Wave in NSW at the same time to cause it.

        • Peck on 12/09/2020 - 10:28

          An interesting article 'futureminime'. CoreLogic seem trustworthy. However I can't imagine migration getting up to 31,000 in 2020/21.

          • futureminime on 16/09/2020 - 10:40

            @Peck: I assume the numbers are 'net figures', where they round off expectations surrounding how many temporary visa holders return overseas, and how many locals leave as well. If Covid-19 caused a downgrade in the forecasted number Aussies moving overseas, or saw an increased return of expats then the number seems reasonable.

            Edit: Yeah I trust the raw data from CoreLogic, but you can selectively use data to fit any narrative so take the conclusions with a grain of salt. For example, I'd've liked to have see total sales numbers, not just auction data. Who cares if Melb only has 13 auctions if all the sales have just gone to private treaties. Total activity in the market is what you would be interested in. Auctions have historically been a good litmus test but I don't think its applicable in a lockdown.

      • BigBirdy on 11/09/2020 - 12:34
        +1

        Have a think about these,
        * End of govt covid support (JobSeeker, JobKeeper, Mortgage and Rent holidays, etc
        * Closed borders affect on accomodation market
        - In the 2018 calendar year, 876,399 enrolments were produced by 693,750 international students - dead
        - Tourism & business travel (desperate hotels undercutting homestay options like AirB&B, killing those markets)
        * Working from home impact on
        - commercial (office) property
        - car sales & servicing, fueld use, etc
        - takeaway food outlets (on the way home from work)
        - at-home workers shifting residences from city to lifestyle regions

        The thing is, all these issues are not going to be resolved by the end of covid. We're probably looking at a decade to rebuild business/employment, and much of it will remain as work-at-home to save office costs. A collapse of commercial property will apply pressure to residential market. Overseas business and student markets have been killed by covid, and replaced by online interaction - more pain to residential. Tourism will slowly rebuild, but it'll still take years to regain confidence, and in the meantime large hotels will move into apartment conversions (as will empty office towers), etc to try and cut losses - more residential supply.

        • virhlpool on 22/10/2020 - 23:34

          The question is though - when will market start seeing some impact? There's hardly any impact visible in the current property market except the pressure on rent.

  • garetz on 15/07/2020 - 15:18
    +6

    The banks freeze on mortgage repayments has alleviated the stress on most homebuyers, if you dont have to pay your mortgage for 6 months then the bank doesnt need to foreclose on you. The true test will be when things return to normal and people have to pay their mortgages.

    The 10k early super withdrawals may give another 4-6 months more of repayments. Just like the GFC the full effects may take up to 2 years to show themselves.

  • netjock on 15/07/2020 - 15:36
    +3

    Sellers aren't dropping the price as much and the properties are still selling though with a longer time in the market.

    Even with reduced volumes and longer time in the market indicates there is lack of buyers. Whoever is buying in this market must be desperate to get into the market.

    It is a good sign for the general economy, but I fail to understand how so many people are still able to access home loans and also have strong serviceability, pretty much like pre-Covid times despite all the damage that pandemic has made to our economy.

    High property prices are never a good sign for the general economy. If you look at how property prices have relentlessly gone up in the last decade and retail sales have been stagnant. Whether it is a $100k property or $1m property it probably needs an electrician / plumber visit one day a year. If I spent $10k today on services, and it is spent every day it is $3.6m. If you can borrow like property at 80% LTV imagine what it does for job creation.

    As said by others it is going to take a lot longer for this to play out as mortgage holidays, JobKeeper etc have kicked the can down the road.

    Read this ABC article to get a primer

    Even if we get vaccine the economy isn't going to suddenly pick up because you need manufacture, distribute and inoculate. All of the created debt from not on JobKeeper / JobSeeker but cost of dealing with the virus will have to be paid some how. If they don't raise taxes then they'll need to ramp up inflation to inflate the principle away which will damage your savings.

  • SydStrand on 15/07/2020 - 15:38
    +3

    The market's being held up by the freeze on mortgage repayments, Jobkeeper, and moratorium on evictions. I'm curious what it'll look like once those lapse in Q4.

    • virhlpool on 16/07/2020 - 01:45
      +1

      If they lapse in Q4.

    • Some Guy on 16/07/2020 - 10:36
      +1

      Banks have already signalled their intention to prolong the mortgage payment freeze. The gov will also maintain some kind of relief. All this intervention will prevent meaningful reductions in house prices.

  • fvalemus on 15/07/2020 - 15:40

    no drastic drop

    if it's too low, vendors are not selling
    Yes, there will be some desperate vendors and some just have to sell, but it's few.

    • Drakesy on 15/07/2020 - 16:28
      +2

      This was how they approached the American housing bubble in the GFC.

      Unfortunately it didn't work.
      If we didn't have mortgage holidays or job keeper, we'd be in a whole world of hurt right now.

  • dasher86 on 15/07/2020 - 15:48

    I've seen sales increase in regional cities - if that's anything to go by prices would have gone up.
    Properties $200k-$350k regional VIC.
    I guess $25k extra is a good way to a deposit.
    Less stock on listings as well.

  • Seraphin7 on 15/07/2020 - 15:51
    +1

    The price drops are out there, but it's not enough to "change the market" at the individual's level.

    In the properties I'm looking at, I'm seeing 5-10% price falls based on say a year ago, but with greatly reduced volume both in terms of on market and ultimate sale. A lot of properties are not selling at auction/having auctions cancelled or postponed. A number of vendors are then withdrawing properties after protracted sales campaigns.

    To me, that's not enough to bring someone into the market who wouldn't otherwise be there, or present a buying opportunity for those who are seeking to seize an advantage. Yes, a 5-10% drop can translate to a big dollar saving on the mortgage, but it's clearly not bringing any significant volume of punters to the market.

    My translation of this is that people who are actually selling at the moment (as opposed to just listing) are generally those who have purchased elsewhere and need to offload their current digs, or have chosen to "get out early". I don't think there are too many "forced sales" out there, again at least at what I'm looking at.

    The first real look we'll get at a "distressed market" (if we get to that stage at all) won't be until Q4 this year at the earliest and probably not until sometime in 2021.

    • neirboca on 16/07/2020 - 15:04

      And I'm seeing prices stay the same or even go up 5%.
      Subjective isn't it.

  • Drakesy on 15/07/2020 - 18:05
    +1
    1. The Increase to the FHBG has lead to a short lived increase in sales (and developers artificially inflating) house and land values.
    2. The mortgage holidays and jobkeeper/jobseeker will ensure that any downturn is distorted by 3-6 months.
    3. Perth has seen a large contraction in listed properties, however we have seen a small decline in housing values.
    4. We could go on treading water for 6-12 months at this rate if the government wants to keep digging itself into a debt hole.

    We'll see how September goes, with the impacts likely to be felt November December

  • loropy9 on 15/07/2020 - 19:41
    +1

    Dream on. Sydney house prices will crash moments before the end of the world. And no sooner than that. They call it urban mafia in other less fortunate countries. Here we call it job creation or something like that.

  • FareEvader on 15/07/2020 - 21:53
    +1

    Can only speak for my area - prices haven't gone down, in fact I think it's gone up. A few sales around my area fetching high prices.

  • Peck on 16/07/2020 - 08:53
    +1

    I have been studying prices in my suburb, and there is definitely a drop of >5%. However this did not seem to happen until after there were a couple of auctions where the sold prices were ridiculously cheap. My gut feeling is that these sales had a big impact on prices that have since been achieved in the area.
    The area has a lot of property ownership by Chinese & I hear that some are selling before the end of the financial year due to foreign ownership changes.
    Recent finance reports stated that Sydney prices dropped 0.8% over the last quarter, and I suspect that this is about right.

    • virhlpool on 16/07/2020 - 09:31

      What are the changes with foreign ownership from the new financial year?

      0.8% is hardly any drop in one of the worst quarters in recent times in terms of economy though.

  • BigBirdy on 16/07/2020 - 09:47

    Aside from the coming negative domestic drivers pointed out by others here (ending of JobKeeper, JobSeeker, mortgage repayment holidays, rental holidays, etc), the very significant drop in overseas students, foreign workers (457 visa), family migration and even tourism will all drive down demand for property. The outlook is all negative, but humans being what they are, many are hanging in there hoping, even dreaming, those illusive capital gains they seek will save them. Nah! The real risk is a rollback to realistic prices (think historical price to income ratio), and that’s a big drop from here.

    • neirboca on 16/07/2020 - 15:07

      What would you gauge is a realistic price? Price to income ratio? Average full time pay is approx 75k.

      • Seraphin7 on 16/07/2020 - 18:01

        You can't value properties, other than entry level, on multiples of income (at least directly). Non-entry level properties are bought much more on the basis of wealth than income.

  • kanter on 16/07/2020 - 09:51
    +2

    The crap hasn't hit the fan yet. People who lost their jobs are still benefiting from government money, they're still able to afford repayments.

    When the government stops the drip and people can't repay their home or investment properties, and tourists still aren't allowed in to pay people's Airbnb apartment, they will have to sell, and sell fast.

  • misstwist on 16/07/2020 - 12:03
    +2

    I have been looking for the past year to purchase a House & Unit in Brisbane Western Suburb/s within 10k's of city. My observations : Initially big drop in listings, prices holding. Now, slightly more on the market but prices are still holding. In fact I have seen some ridiculous prices. (great for the seller) I have also noticed that within my area more auctions are being held and some are under offer prior to auction. This is unusual for Brisbane, Syd and Mne are Auction Cities but not necessarily Brisbane (unless its under 5k's from city) There is also a good mix of Investor and Owner Occupied homes being sold. So I would say my observations are the same as you, certainly no bargains to be had right now.

  • Mythreesons on 16/07/2020 - 12:53
    +2

    I live in Queensland, my son is currently looking to buy a house, prices aren’t dropping and houses are getting snapped up within days of being on the market.

    • neirboca on 16/07/2020 - 15:08
      +1

      Because less on the market.

  • HeWhoKnows on 16/07/2020 - 14:56
    -1

    Property Prices are holding up well across the board at the moment because nobody has been forced to sell yet.
    Those affected by COVID19 are at the lower end (casuals and hospitality staff) and so highly unlikely to own a property. More likely renters and temporary residents from overseas.
    Thats why property prices havent suffered as yet.
    But interesting that the banks appear to be scared as they have offered to extend the 6 mth mortgage holiday by another 4 months.
    I always say to watch the banks.
    Anyone who has a mortgage over an investment property (and there are many) will soon be feeling a significant loss in income when current tenants move out and then they cannot find a new tenant at all, And if did it will be at a much lower rent (-20%).
    The fact rental returns have CRASHED alone should start to drive property prices down.
    But rents have been flat or declining for the last 5 or 6 years.
    It is the RBA that has driven prices up with ever decreasing interest rates which have more than offset the reduction in rents.
    However the RBA has now run out of gun powder so whats left to offset this sudden 20% drop in rents? (assuming 100% occupancy).
    Dont jump to the conclusion yet that property prices are about to crash.
    The Federal governemnt still has fiscal instruments which can support property such as making all mortgage repayments tax deductable as was the case in the 70s.
    You could see state governments providing incentives too such as 1st home buyer grants and reductions in land tax for investors - wouldnt that be nice!
    So despite the RBA running out of ammo, the proprty party is not over just yet.
    Combine these ridiculously low interest rates with big tax concessions from both state and federal governments and you have all the makings of a big resurgence in the property market.

    • virhlpool on 16/07/2020 - 15:28

      Those affected by COVID19 are at the lower end (casuals and hospitality staff) and so highly unlikely to own a property. More likely renters and temporary residents from overseas.

      This is a gem of an insight.. where from?

  • capslock on 16/07/2020 - 15:27
    +1

    Prices will not go down.
    1. The government has asked banks to extend the loan repayment freeze. This could go on indefinitely until the economy goes back to normal.
    2. A lot more people may be unemployed now but majority of the workforce is still employed. These employed people are still able to buy investment properties.
    3. Still huge demand out there from first home buyers.
    4. Property owners out there for whatever reasons are choosing not to sell right now.

    • Seraphin7 on 16/07/2020 - 18:13

      On point 4, this is due to the fact that very few people are in a traditional "forced sale" situation, at least at the moment.

      The majority of sellers right now either need to sell because they've bought something else and need the cash, or are "getting out now". Because of the various government and banking breaks available at the moment, there are very few people who literally cannot make the mortgage currently. That may not last forever.

      As with any market, major price falls only occur when there is a large over-supply (and specifically of those who must sell vs those who would like to sell). Because the demand isn't there to meet supply, the market can only clear if prices fall to entice greater demand in terms of volume.

      These conditions are established when (1) a significant enough volume of owners/sellers are forced to sell because they can't make mortgage, and (2) a significant enough volume of buyers leave the market due to loss of purchasing power.

      The triggers for these conditions are usually more or less the same, i.e large scale and prolonged unemployment.

      We're not there at the moment … whether are or aren't there in 2021 remains to be seen.

  • Jared17 on 16/07/2020 - 16:26
    +1

    Prices around sydney city didnt drop or at least barely drop at all

  • this is us on 16/07/2020 - 18:13

    Nah… Everything is still perfect in Oz. People are not unemployed, business are fine, that's why the AUD is going pretty well… No crisis at all… (text might contain sarcasm)

    • virhlpool on 16/07/2020 - 18:14

      I had a chuckle when I reached the text in the brackets. :)

  • popsiee on 16/07/2020 - 18:35

    May .5% drop
    June .8 % drop .

  • SkMed on 17/07/2020 - 13:58

    I recently started looking for the firs time. Not sure if this is common but I went to inspect a 1 bedder in Brunswick with a listed price of 350-375k and the RE told me the seller would take 325k if I put an offer in. I'd like to take that as a positive sign, but might just be some RE agent trick? I dunno….

    • El-Rhi on 21/07/2020 - 06:47
      +1

      The list price does not indicate the value of the property. Chances are the market value is $325k (or lower), but the agent has inflated the list price to leave some room for negotiation.

  • Tiredman on 19/07/2020 - 15:16
    +2

    In inner east Melbourne. Houses in good school zones are still holding up pretty well I noticed.

  • elvislj on 15/09/2020 - 15:18

    I have a mortgage and am worried about how i am going to meet repayment after September when job keeper is reduced. I have been actively applying jobs (in architecture with 3 years experiences) but haven't got a single interest for 5 months. Not sure how many people really became unemployed out there but if it's high many will be in the same boat. I will have to try to find alternative jobs to get by but i know if i leave the industry for too long my chance to get back will become very slim

    • Peck on 15/09/2020 - 15:50

      Grab a job anywhere that you can get it. Being employed will take the pressure off you, and will get you respect from potential employers. It shouldn't prevent you from still applying of jobs in architecture.

    • whooah1979 on 15/09/2020 - 15:55

      Use your extra replacements to service the mortgage.

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