Yes housing is a tough one.In a normal inflationary cycle wage...

Yes housing is a tough one.

In a normal inflationary cycle wage increases support rising prices , but as I warned 18 months ago I think we will go through a period of stagflation is rising prices and falling demand.

Housibg has three elements

Cost of Land.
Constrction Cost

Speculative Premium

Land is fairly resilient and does not fluctuate much, and construction costs can fluctuate wildly, but the bulk of housing price is the speculative Premium.

if you look at the price of some of the shit box houses in Sydney and Melbourne and deduct the land cost and construction cost even though some of them should be bulldozed you can see the level of speculative Premium in the price

When the housing market crashes not only do these shot box houses but even well constructed modern dwellings so you often see houses advertising in the trough as " below replacement value "

.This is very bad news not just for Zip but all companies depending on discretionary spending