I get the impression the property market is a lot weaker than the press and (especially) the land rats would have you believe.
Over the past few weeks more properties have been withdrawn from sale prior to auction, and of those that have sold, prices have not been revealed.
In my suburb (Eastern Melbourne), last Saturday 12 properties were auctioned - 2 passed in and 10 sold, but the sold price has not been disclosed. OK, the buyer has the right to say don't disclose the price, but if agents were so jubilant about the sale price they would push to have it published.
For a multitude of reasons I suggest the market has peaked, and you can look forward to a 10% price fall in Melbourne for house prices.
Property Prices Bubble Has Burst
Ocker on 27/03/2022 - 19:29
Comments
Property Prices Bubble Has Burst
Good luck with that when;
- High fuel prices
- War in Ukraine
- Covid still on going
- NSW / QLD floods
- Population growth
- Demand for living closer to CBD
Even when the bubble hits its limit, it continues on to get inflated.
Why?
- Land is an asset, and it is more valuable than fiat currency (inflation) or gold (not much uses)
- People transfer their Time into Work into Money into Land
- Process of Evolution has made homo sapiens seek procreation, and culturally to give their offspring their wealth. It's not replicated in other animals. So it's not a generational thing either. We can't quiet change our genetics, but we can change our culture.
- There's +8 Billion people in the world (and that figure is rising and rising), and everybody is competing for the most land, best land, in best spot. So this is a global and historical challenge, it is not just confined to Sydney.…so either work hard, do your bit to pay for the REA's new BMW and the Banker's new Yatch. Live a stressful life and die an early life due to heart disease. Or don't buy a property, stuck paying historically high Rent Prices, end up depressed and die early life due to [morbid]. Pick your poison.
You will own nothing and you will not be happy?
if you got a job, you can always get a house, at least a land. You may need to compromise on few things mainly the location. But unfortunately every one want a 5 bed room house with a pool and deck in a CBD.
You will own nothing and you will not be happy?
There are people happy and enjoying the life style just by renting, instead of locked in to a mortgage.
Eh, I flipped a coin and the result was "No, it hasn't", so I guess we don't have conclusive anecdotal evidence on either side of the discussion.
I think your statistical analysis has more legs than OPs
OP cant even use consistent language in his post to describe that the "property bubble has burst"
1% price drop. What a crash!
Owners believe there is no drop ;) Upcoming buyers and non-homeowners think there is a drop coming ;)
Assuming there is a 10% drop, 10% off over $1,000,000 is still a lot of money ;)
Well interest rates are supposedly going up. RBA along with a huge number of countries are walking a tight rope here.
More interest rate hikes, collapse demand = recession
Fewer interest rate hikes, more inflation = recession2008 gfc … 2012 mining bust ….. 2020 covid …. didn't crash aussie housing market
what will
The pro LNP interests in government will make sure it happens if he gets elected.
The man responsible who was the Minister for Regional Development and Local Government and Minister for Infrastructure and Transport during Australia's #1 performing economy in the world (revered throughout the world's most awarded Economists) during the GFC will be the downfall of Australia? Really? Are you always this big-brained?
You ever been down the Ipswich Motorway? Hunter Expressway? Ever heard of the Regional Rail Link? Redcliffe Peninsula Railway Line? Ever driven down the Pacific Motorway, or the Bruce Highway?
All thanks to Mr Albanese who's **NeVeR HeLd a FiNaNcIaL pOrTfoLiO!!1!*
Doubt it, I'm sure Labor have learned their lesson from the last election, any policies that are going to impact the real estate market negatively won't be on the table.
2008,2013 and 2018 all reduced the rise. Statistical facts. Interest rate rises will do this again this year and over the Como ng years as the current pricing aren't realistic. Same will be for 4x4s and second hand car markets
News this morning was that the big four banks lowered their variable rates ahead of a rate rise. Competition will be fierce amongst financers one the official rate increases. I wouldnt be surprised if banks dont pass on the rate rise for some time.
Hi,
If you look @
https://reiv.com.au/market-insights/all-suburbs
you can see what was Auctioned/Passed In on a Suburb by Suburb basis.
that's what i thought when covid hits …
people lost jobs .. immigration closed … no students … no rental …..
property should collapse back then right ?
but it has doubled since
The government borrowed an incredible amount of money and gave it to people no questions asked.
If you owned a small business which had a bad month right at the start, you got your whole staff wages bill paid for 6 months. For some businesses this was literally millions of dollars to the owners while their business kept operating, sometimes doing better than usual.Even people on crappy casual jobs got paid well to isolate after a test or if they got sick (compared to their usual zero sick pay). The place was awash with government cash.
Note I don’t disagree that urgent and substantial action was required, but the size of the cash splash, and the way it was basically untested against means meant a lot of money ended up as a nice bonus.
Couple that with the last gasp of interest rates drops, and anybody doing OK found they could afford more house than before.And when Aussies get a little more money, they bid up housing. Every time.
when Aussies get a little more money
Australia's national median income has been falling for over 50 years after two generations of fools voted to replace democracy with the free market.
Got a link for that? I think you might be mixing up US and AU figures. US income growth has been anemic since the 1970s.
Australian income growth hasn’t been very good since the GFC, but nowhere near as bad for the US over the long term.
yep it was a huge racket, many many businesses were laughing all the way to the bank
property should collapse back then right ?
It would have without the govt intervention.
If property prices ever look like crashing, the government will just offer grants and incentives to get buyers back in.
The system is designed so that property owners and investors get richer and richer.
yeah grants on properties that they themselves inflate the prices of like by buying only properties that cost over $500,000 or something etc, or properties from affordable homes (which themselves are more expensive most of times than a private deal of market)
Agreed. And First Home Buyers need lower prices, rather than Govt Grants that help increase housing demand, and slow any market fall!
Maybe buyers haven't disclosed bevause they're embarrassed that they overpaid?
price withheld figures are easy to find on domain, just have a price search range for properties sold.
according to the herald sun the clearance rate is still well over 80 percent….i would love it to bust and make housing more affordable but i dont know if it actually has….
For a multitude of reasons I suggest the market has peaked
We are at the current 'peak' pricing for sure. Inflation is kicking in, interest rates are about to sky rocket.
The only time you will know the peak has gone is at least 3 months after it has passed. At the moment the peak of the peaking has probably passed. In other words where houses can sell for more than the one last week sold for.
The biggest mistake is that considering a plateau means that the boom has ended. Its not its still going.
Of course on the opposite side people say property never goes down, and they show 10-15 graphs showing a rise. It ignores the fact properties do go up and do go down in between.
Property prices go down when interest rates rise. Simple maths tells you that people buy what they can afford (or what the banks say they can afford).
Interest rates drop people can afford more. Interest rates rise they can afford less.
Supply drops demand isnt satisfied, those who can afford less lose out. Supply increases demand is satisfied, if too much supply prices drop.
So if banks increase rates or people expect it to increase as is the case now, people (if they are smart) then arent willing to commit as much as they know their ability to afford the payments gets worse.
Well…………… Melbourne was running this scam for years about being the best lifestyle city………….so in it's case I think the bubble bursting will just inflate other states bubbles.
People should stop worrying about a crash. There won't be a GFC 2.0.
People that can afford to buy $1M houses isn't going to worry about tiny tiny rate rises.
what about stock market crash and recession
Are you worried about a stonk market crash or are you backing up your fiat truck to BTFD?
I would love a stonk crash to that I can add more TSLA.
People should stop worrying about a crash. There won't be a GFC 2.0.
You cannot know that.
There is no GFC 2.0 because Lehman Brothers no longer exist.
Haha, fair enough!
Why do you think there won't be another GFC?
Markets work in a cycle, right?The GFC was a one-off crash as a result of accounting fraud.
100s of banks got rekt when the Ponzi blew up and 100000s of people lost their savings. The Ponzi won't blow up again because the feds are backstopping it this time.
You mean the Feds are pumping lots of money into the markets, keeping the party going until they can't? Markets always work in a cycle, there have been multiple market crashes throughout history. To say we won't have another GFC is a little naive, I actually believe it'll be worse than 2008 when it eventually does happen, the market is euphoric about everything, even stuff like NFTs are fetching ridiculous amounts of money when they have little value as an asset.
NFTs are fetching ridiculous amounts of money when they have little value as an asset.
I think you mean absolutely no intrinsic value. It’s another ponzi scheme.
I wouldn't say burst, but I think the price which is largely based on hypothetical increase in cost, which has cooled a bit with people expecting interest rates to rise.
Where before I've seen townhouses auction off at say $700k or hearing "new street record", now its being turned in at auction and then selling for $645k through a normal sale a month later or "surprisingly" an agent actually trying to call ME to sell me a place. I'm also seeing properties stay on the site a lot longer as well.I don't think I'd say the bubble will burst or anything, end of the day there's so many groups going to prop it up again.But I do sorta believe there may be a $50k to $80k drop or something, so I sorta feel if you're interested at buying a place, its not worth the risk to wait IF you find the perfect one.
I wouldn't say burst, but I think the price which is largely based on hypothetical increase in cost, which has cooled a bit with people expecting interest rates to rise.
I would agree. REA don't want people to know it has cooled and keep people putting their property on the market. For REAs volume is everything. They make their % regardless how much they sell it for.
Lot more listings now than a year ago. In part because those who bought last year aren't going to be buying again so soon. When it has gone up 20% the pool of buyers shrink as seen by number of articles complaining property dreams have gone for many.
Also in the last 6 month a lot of trash have been listed. More than 50% of houses sit on odd blocks (not rectangular). Those blocks are hard to do stuff with and developers absolutely hate them. Also town houses, a lot of developers have been building tiny 2 BR town houses with 1 parking space. Imagine paying all you can afford for one and finding out in a few years it is redundant and the market is flooded with them.
There has been multiple million dollar sales in the "median" Adelaide suburb I own in which is ridiculous.
Historically prices usually crash in Sydney first, then Melbourne, then yada yada, Adelaide is second to last in the order.
^ me OP ! That is why people clean up in the world with your huge statistically significant sample of 12 .^ ing wake up pls hehe :)
No, it hasn't.
first you said its crashed, then you said its weaker, then you said its going to fall 10%
my take…..you have no idea what your babbling about, back in your box.
when you start seeing pollies and banksters offloading properties, thats when you know its going to crash
it crashes when they say it does, theres no market forces at play here. its all a big racket
The shortage of housing in Australia will keep prices high. In Adelaide it seems prices are just going up further.
Realestate.com.au has around 20000 properties in Greater Sydney. Is there really shortage?
Sold price not disclosed = 10% drop
It will be out eventually, give it a good couple of months as these sorta data will eventually made their way to the public domain.
Don't worry the government is working on a plan for people to use their super balance to back their loans.
Also with cost to build you will find there is a floor to the price. You'll have some people desperate to offload but ain't going to be many because the banks have learnt to not have a fire sale.
Property Prices Bubble Has Burst
Define what you consider as burst in percentage terms as the title is just a generic statement. But would make more sense with maths behind it.
But would make more sense….
Not if they are at Uni studying Journalism!
If you want to see where RE prices are going first watch interest rates (there are other factors that come into play but look at interest rates first). We've had a few decades of progressively lower interest rates, particularly the last 10 years and prices have risen accordingly.
It's a pretty simple equation where you take a basic necessity, housing, restrict supply and then make it increasingly easy to borrow larger amounts to pay for it.
Reduced supply ensures that people have to compete and at the lower and middle bands of the market people frequently pay as much money as they can access.
So, while the bubble may not have burst yet there's a very good chance it will if rates go up as much as the market is expecting.
and you can look forward to a 10% price fall in Melbourne for house prices.
Ha ha ha ha ha ha.
Bah ha ha ha ha ha ha ha. You’re funny.
Record increases in house prices suck, it only benefits those that want to offload their investment properties.
I think media makes it a bigger issue. I think people in general have an opportunity to buy a home where they can afford to. Keep in mind that this options isn't available to people living in most first world or populous countries in the world, they just settle for apartments in the outskirts of cities.Burst? Looks like it's a strong as ever, there may have been a dip, but I don't see a crash or a bubble busting.
I’ve not seen any auctions pulled/ failed to meet reserve in my suburb. I’d say brisbane market still going strong.