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%
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