Purchases by first time home buyers are at record lows. While loans are certainly more affordable to service they just don't have a 100k+ in savings for a deposit which is understandable. This is not going to change any time soon.
$550k for a new 50sqm 1 bed unit in Sydney is just crazy and is a sign how overpriced the market really is. It's not terribly surprising many young Aussies don't want to buy at these prices even with Gov grants, hence many builders are going bust
It's really only property investors buying and selling to each other which is keeping the market alive at the moment. This is being driven purely by low interest rates. While I expect low rates for a considerable time who knows what lies ahead. Property investments won't look so great if rates start to rise.
In addition, if the Chinese get burnt by their own property bubble, which is looking more and more likely, expect their taste for Aussie properties to dry up also.
With Aussie wages not going up, but in many cases going down, do people really expect property values to keep going up? Who is going to buy? Property has had a golden run over the last 20 years, but to me it looks like the cycle is ending. Over geared property investors could be in for a very sickening time.
