Australian Housing - where to go from now ?
I am no financial expert or mortgage guru rather I am forced to think about this stuff due to the need of having a shelter and sustainable financial planning. I have only been living in Australia for less than an year but I have been observing the housing market for over 2 years and the prices have never made sense to me.
Actually that's not true , prices do make sense given the environment that is created around a basic need of life( housing).In my amateur analysis of the market the below seem to be the factors over past few 5ish years
-Anyone and everyone can get a loan approved for large sums consequently saved money has no value.
-Negative gearing future proofs any investment against any potential loses on rental income.
-Record immigration intake in the major cities ( that would be people like me) keeps the demand side brimming to the top
-You can't really invest your money elsewhere and make these kinds of returns. Banks pay like 2.35% on long term deposits.
-You can invest in ASX but you need to financially educate yourself and keep updated , not the case with housing.
-Chinese millionaires trying to secure their gains from Chinese government by buying up houses and leaving them empty. Makes sense from their perspective not from a middle class Aussies perspective.
-average price of house is 10-15X the average salary.
Having said that , anything that goes up must come down. One can observe many signals for a bearish housing market but to me the sure-shot sign is when the main stream media ( they are usually last) starts running stories ( mostly for CYA) indicating " adjustments are coming". I have lived through the 2009 global financial meltdown and learnt the valuable lesson that you cannot trust any one source of information and things that don't make sense eventually do make sense ( get corrected/rektd).
My question to fellow aussies is, what is your outlook ( and why) on the housing market .
a) major correction ( up-to 30%) in prices due by end of 2019
b) only growth in prices would be paused by end of 2019
c) nothing really will change and prices will going up , maybe at a slower pace.
d)anything else ?
Mainstream media coverage of housing recently:
Domain .com news , really ???
I think prices will rise .. not fall .. but thats just me..
Interesting , what are the signals that lead you that conclusion ?
Have you seen the prices in new zealand? Saturation , the population isnt getting smaller and more people with money want to move to australia for the lifestyle..
I am a third generation qualified real estate agent.. i know real estate in some kind of capacity.... i havent worked as one but i am qualified.. my gut feeling says this but if you really want i can get some serious info from the family..
Australia is getting so condenced its unconfortable for me as someone who experienced a more relaxed outlook in earlier years.. seriously look so so many people and it wont stop.. even if there is less economic stimulation locally i predict overseas buyers will fight to secure property in our great country..
China has rediculous amounts of money to invest..
I understand , thanks for replying.
Thanks for the article too
I am suprised we have not had a price correction yet. We are so over priced for housing in most of Australia. Housing should never had become an investment for making money. It has just made life so hard for many peaple just to have a roof over there heads. It really disgusts me that a basic human need has become a cash cow for the government, banks and a few % of the population.
I hope A happens but think B will be the most likly. Judging from the past.
If B happens by end of year , A is not far behind next year.
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A huge problem is that greed runs alot of the development decisions that take place in australia.. profit ruins any forthought about suitable condensation or developental affects to the area. What happens is like, oh you dont like being squeezed into a plot of units with 5 other families when one generation earlier only one family lived comfortably on the block?
Yeh our system encourages prosperity which is great but it also encourages over saturation offering the benifits to anyone who has money to make the difference..every action has a reaction ..
So our prosperity and lifestyle attracts money and the little man misses out.. great..
I think prices will rise .. not fall .. but thats just me..
Land more than property..