Whilst I agree that easy finance/low interest rates has fueled housing price rises in Sydney & Melbourne (together with very strong net population growth, coupled with many wealthy-mainly from Asia- immigrants), the article doesn't take into account another important reason for such high, median price values ie quality & size of many new houses.
Furthermore, particularly in many Sydney & Melbourne inner suburbs/more "salubrious" suburbs, major extensions have been done at the rear of old houses- often a double storey rear extension, doubling the size of many old houses.
Furthermore, the quality of many new houses & renovations since the 1990 is far superior/ more expensive to that of older, traditional housing ie
. much more expensive floor tiles & wall tiles
. much more expensive kitchen & bathroom fittings
. much more elaborate & expensive landscaping
. outdoor inside/outside kitchen areas, which didn't exist previously
. more swimming pools & plunge pools
Therefore, it is unrealistic to make a direct comparison in housing stock/prices with pre-1990 prices & median wages: not apples for apples.
There will be a property price crash- demand will fall with:-
. collapse in immigration/demand falling
. high unemployment. Owners defaulting on loans/massive amount of stock going on the market, causing a supply glut
. property investors (current & potential) becoming apoplectcic with falling rents & empty properties
. banks inevitably will tighten lending standards, including a much larger deposit- to protect their LVR's, if borrowers can't repay & property has to be sold
. more airbnb properties, with tourism decimated, being offered out on long term leases to locals- adding to the supply glut of rentals.
I agree with SQM's L. Christopher comments on the ABC on 28.7- the Sydney & Melbourne drop could be as high as 30%, if the recession is deep, & long, from peak to trough.
It is also unclear if the current anti-Australia policy/quasi trade war of the Chinese Communist Party will continue. If it does, the recession will become even more deep & damaging- adding to additional house price declines.
In the GFC, many high end properties fell by 20%+; & in the 18 months prior to May 2019, many high end properties fell by c. 15 %+ in Sydney & Melbourne: & we didn't have a pandemic/recession/high unemployment/collapse & ban on immigration in those 2 periods. The far outer suburbs will probably only fall, IMO, about 10-15%
- Forums
- Property
- Housing crash
Housing crash, page-234
-
- There are more pages in this discussion • 176 more messages in this thread...
You’re viewing a single post only. To view the entire thread just sign in or Join Now (FREE)
Featured News
Featured News
The Watchlist
SER
STRATEGIC ENERGY RESOURCES LIMITED
David DeTata, Managing Director
David DeTata
Managing Director
SPONSORED BY The Market Online