7 signs Australia's housing boom is over, page-24

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01/11/15

11:47

Post #: 16302393
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Originally posted by szaba_the_hut ↑

I don't know where the population growth rate is going in Sydney. Population growth and strong employment generally drive new housing. If you can accurately forecast increasing Sydney population on a sustainable basis then property development and house prices should trend upwards. There are probably sensible limits to urban sprawl - I thought Sydney sprawl was out of hand when I lived there in the early 90's for 3 years. Inner city medium and high density is the future for Sydney IMO but not for me.

In WA our population growth has rapidly stalled with the end of the mining boom. Increased unemployment from the mining sector as expansion projects wind up have also taken their toll on new investment in housing. Since about April we have been coming down from a record peak in activity in the domestic housing sector. Its still ticking along but activity is declining. No significant collapse in housing property prices just yet - but it is depressed. Next 12 months might see more decline IMO given commodity prices and WA mining driven economy. Commercial property and office space is another story - pretty big oversupply now.

Every state and region has a unique equation but the principle drivers of property are the general economy with that driving employment and hence sentiment and the other factor is population growth/decline. Often the economy and population growth are intertwined but other factors such as immigration and foreign investment/money laundering can be at play causing a disconnect in specific markets like Sydney.

I have no idea but if the local market rises more than CPI + 3% I would fear it will eventually correct itself. Don't get caught holding the parcel when the music stops. Money to be made in the interim.

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Just attended a presentation by Bernard Salt...some stats from that

Sydney 1,863,000 (1954) 4,841,000 (2014) Forecast 7,688,000 (2050) + 59%
Melbourne 1,524,000 (1954) 4,440,000 (2014) Forecast 7,670,000 (2050) +73%
Brisbane 502,000 (1954) 2,275,000 (2014) Forecast 4,188,000 (2050) + 84% (+ add GC 1,225,000 + 99%)
Perth 349,000 (1954) 2,021,000 (2014) Forecast 4,633,000 (2050) + 129%
Adelaide 484,000 (1954) 1,305,000 (2014) Forecast 1,797,000 (2050) + 38%

If you believe in the past trend, history and these forecasts are even remotely close, you'd have to have rocks in your head to believe that property will ever get cheaper over mortgage lifetime. ie: rent free asset minimum as PPOR + inflation + leverage.

And, I guarantee you we'll hear the same old same old crash/ bubble in 2050.
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