....this is a part that interests us on this forum (man speaks the truth).....
Callum Newman: Are you still bearish on Aussie property?
Kris Sayce: Yes. Next question!
Only kidding. To be honest, I've stopped paying much attention to Aussie property prices. I proved that the property spruikers were wrong when they said house prices couldn't fall.
I also proved that house prices don't double every seven years.
And to various degrees the price slump is progressing as expected. In Queensland and Western Australia it has been a rapid slump. Elsewhere (especially in Melbourne) it's a slow death.
In the Northern Territory however, reports suggest that prices have taken off on the back of the resources rebound. But before the spruikers get too excited I'll make one point.
Buying an investment property in the Northern Territory is like buying a small-cap stock. The price can take off quickly, but it can collapse just as quickly.
When you're punting just a few thousand dollars in small-caps, that's fine. You can cope with that volatility, and it's easy to sell if things go wrong.
But property investors don't have that luxury. The Northern Territory is a limited market, and the resources influence is just a flash in the pan. If you can get in and get out quickly then you may do OK.
But if you borrowed $500,000 to buy an investment property in the middle of nowhere, try getting out of that with less than a six-figure loss when NT house prices collapse.
In short, housing is still a bad investment. If you want to buy a house to live in, or a holiday home, go for it. But in both cases don't assume you'll make a profit. Housing is going back to what it has been for most of history, and that is an expensive consumption item.
