Swerv-o

2011? They've been saying it since I touched down in 2006 - I waited until 2008, reading all of the dire predictions of massive price drops, but they never eventuated. That's not to say that they won't eventually - it's never going to be a straight lint to infinity growth - but I've certainly learned to take the opinions of the 'experts' with a pinch of salt now.


S

Beoz

...... and when is that crest?

Beoz

Likewise. I remember when Sydney took a minor blip in 2011. That was suppose to be the end, armageddon, it was all over.

Then off it went again.

There hasn't even been a minor blip since.

Swerv-o

Yeah it didn't even fall during the GFC - just flatlined for about 18 months.

I don't think that it can continue like this, but I have no real idea of how or when there will be a correction. It could well continue for another 20 years.


S

Beoz

The "how" is easy - limiting what people can borrow.

The "why" will dictate "when".

Interest rate rises, unemployment rises, banks restrict lending, government gets a conscience about household debt. Who knows. None of the above seem on the cards in Australia.

Swerv-o

Agreed - and largely that's because no Australian government of any flavour wants to be the one that presides over a collapsing property bubble - so they will take pretty much any measures necessary to keep it going. It sort of feels like it will eventually (if not already) end up in ponzi territory.


S

GarryP

You have to Trunbull at least some credit for trying to emphasise investment in new business over investment in property. However it wasn't even close to being enough to rebalance something that is so way out of control.

And it's not just individuals - any finance concern that has exposure to property debt would get obliterated by a correction.

So they just wait for the eventual collapse, when they can claim to be 'stabilising the house price decline' by reform of the market. Probably within the next ten years for that.

Beoz

.... and rightly so. Given the tax, jobs, and all the other things property gives the economy, its certainly something you don't want to collapse.

Its a tough place to be.

On one hand you want to grow the property industry, but on the other hand you know this household debt is going to be an issue at some point.

Either way a burst or a hard landing is going to hurt a lot of things. You really want to soft land this thing.

OzTennis

And you always 'much be right'?

The Labor government in Victoria is attempting to make housing more affordable, especially for first time home buyers. The stamp duty cut for first buyers and the 1% tax on properties unoccupied for over 6 months are both welcome measures to try and make investors rent out unoccupied property and make it easier for youngsters to buy. You find this unacceptable?

Just search for Sydney property market and the reality is not as you would have it so it seems e.g.

Australia's property boom showing signs of slowing as buyers hold back

Beoz

Do you know anything about supply and demand?

Its pretty simple. If you give a group of buyers money, there are more buyers in the pool. More buyers, more competition, higher prices.

On the flipside, take a read of your article. Same principle applies. The less sellers in the market, more competition, higher prices. Why are sellers dwindling in Sydney? Pretty simple. People can't afford the stamp duty to move on to their next property.

What the WA government are doing is providing incentive for a group of potential sellers to sell. More stock, less competition, lower prices.

Placing a tax on vacant property is good, but is 1% really enough? If you can afford to leave a property vacant, you can afford 1%. Typical dumb arse Labor ideas.

Hope this helps.

OzTennis

Smart arse comment to start with and sloppy analysis which follows which I won't bother my arse too much picking to bits.

You don't know the difference between 'lower prices' (rarely happens in a property market) and slowing down the rate of increase in property prices (only poor students think a decline in the inflation rate means falling prices).

Much of the housing market is 'second hand'. The object of the stamp duty reduction for first home buyers is to enable them to be able to compete better with those who go to auctions bidding for a 2nd or 3rd or more property. Whether this will put upward pressure on prices is unsure not given.

My friend owns a Barry Plant franchise in Melbourne and he knows of one agency which represents Chinese buyers who have 430 houses on their books in Sanctuary Lakes and Point Cook, a lot of them sitting empty. You might think not but a hit of $3K to $6K on these properties every year will encourage these investors to rent out some of them rather than have them sit empty. Melbourne CBD and Docklands is being blighted by high rise residential buildings going up, often Chinese buying off the plan.

Stuck in Auckland

Add to this that they can no longer bring funds from China to fund it.

Beoz

Ho ho ho. You clearly don't understand supply and demand.

Competing is the problem not the solution.

I think you just told us the solution. Make it difficult for investors to buy their 2nd and 3rd property. Reduce the competition

Giving money to FHB, adding fuel to the fire is not and only adds to competition.

xizzles

Oh, fret not, they are still finding ways to "bring the funds" over....

Stuck in Auckland

I work with Chinese funds and no they aren't

The only funds are from other outside China sources ie other property