The future of Australian property prices

[jbocker]

It was a bit of a nightmare in NZ after the Christchurch EQ red tape slowed rebuilding, insurance pay outs took years, labour to rebuild was scarce.

Did a tour through NZ and I was fascinated by the rebuild of Napier (which I think took around 2 years including a worldwide study of suitable architecture) and I then went onto the Christchurch which still had large areas still in ruins many years after the event. Clearly the two disasters had their differences in repair, but I think the administrators / regulators have a LOT to answer for in Christchurch. Hey how about some regulations on the timeliness of the regulators.

Napier has excellent Art Deco architecture well worth a stay.

Post these dreadful bushfires I sincerely hope that relief is rapid and that a better solution on building requirements in fire prone areas is done QUICKLY. I fear a confusing muddle of regulators wasting a lot of time and resources coming up with a disparate range of confusing laws and bylaws differing from one shire to the next. Meanwhile the insurance companies will resolve their issues within weeks by upping insurance costs across the board and apply further strangulation on claimable events, while at the same time drag their feet to pay out claims.

 

[fergee]

Meanwhile the insurance companies will resolve their issues within weeks by upping insurance costs across the board and apply further strangulation on claimable events, while at the same time drag their feet to pay out claims.

Exactly what happened in NZ meanwhile people are homeless waiting for the insurance payout and suffering PTSD while the government can't figure out which shoe to put on which foot. I hope Australia can learn from these mistakes and do better. What I also noticed after the EQ was a real sense of community and people helping each other and pulling together to support each other. I have no doubt Aussies will be like that too after this bush fire situation is under control!

 

[qldfrog]

I have no doubt Aussies will be like that too after this bush fire situation is under control!

I sadly doubt it will happen when you see the appropriation of the fire disaster by some.
At least, no one blamed the earthquake on CC..well actually some start doing it...
I expect the following
Myriads of codes and regulations and extra fees if possible by every agency and department around
A huge fee frenzy, then laws mandating forced evacuation in case of fire...
Increase insurance premium still unrelated to actual location based on obsolete council maps..with rezoning corruption magnets
Next fire wave will then see an highest ever number of houses lost, and matching premium second wave of increases
Bush living becoming unaffordable
.population herded back in their chookpen of high density suburbs becoming more and more dumb units of consumption, potentially all receiving universal income until we sell the last lump of coal iron ore Asia wants to buy.
Great future for infill blocks ahead

 

[fergee]

Bush living becoming unaffordable

That would be a crying shame.

I meant Aussies will rally around the communities and help each other which I am certain they will even if that is made harder by all the red tape that's going entangle all things remotely related to fires.

Why are people blaming the government for a natural disaster?
I think they should have deployed the military much sooner and Scomo has acted like a right goose going on Holidays right in the middle of it but what precautions could have been taken to prevent this?

 

[jbocker]

I see a lot of finger pointing at Morrison, but I think we need to be point and pound desks far more broadly. Stop pissing about whether he is taking holidays etc. He and I would say most others at his level are or seem seem unqualified in what to do. Morrison McCormack Albanese all the elected members in rural and near city electorates need to URGENTLY consult and formulate plans for such events as it is pretty clear we have major shortfalls at these levels of disaster. I personally thought we have come a long way in managing fire events, but these fires have exposed us.
Whether blame is climate change or not I believe we are witnessing an event that will likely repeat itself with greater frequency. If we are not going to bother finding the cause then put effort into prevention or prepare ourselves dealing with the consequences.

In keeping in line with the thread Effects on Property Prices, It goes without saying loss, damage and repair has already devastated many poor people, and for those lucky to escape disaster then fire risk zones will likely be enlarged with greater fees, levies, non compliance fines and insurance cost will be just the start. House prices affected in fire risk areas as the appeal is diminished for living in the bush, potentially new builds will be need greater regulation for fire resistance. Infrastructure improvements (replacement) to better manage future fire events. The push to urbanised areas will be greater.

 

[Smurf1976]

Ironically this could end up being another boost to Aussie house prices People loose homes to fires

Also just the simple supply and demand aspect.

A small number of lives lost thankfully but a much greater number of homes destroyed. In the short term at least that's going to tighten the market given they're going to have to live somewhere even if it's not in the town they're from.

 

[fergee]

These people will need new homes, as qldfrog and Smurf1976 stated above, so we could assume they will move to another town or possibly towards the coast and cities in the mean time. A lot of people left Christchurch in the couple of years after the EQ because of red tape/bad memories/fear of another EQ/PTSD.

In the short term at least that's going to tighten the market

As @jbocker said the push to urban areas will increase so it looks like it should drive up coastal towns and to a lesser degree major cities housing prices over the next couple of years all things being equal.

Rural houses that survive unscathed maybe a good buying opportunity as people could try to exit emotionally. The risk would be future regulation costs that may be imposed on home owners in those rural areas. (rereading this it sounds cold as F* as this disaster is happening right now so I do apologise to everyone going through this)

 

[sptrawler]

It looks as though ASIC is trying to tighten lending criteria, without saying exactly what it should be, sounds familiar.

https://www.abc.net.au/news/2020-01-07/asic-guides-banks-and-brokers-on-home-loans/11810994

From the article:
In a much anticipated ruling, Justice Nye Perram found that thousands of home loans made by Westpac were not irresponsible, despite using a relatively low benchmark rather than customers' actual living expenses to assess the loans.

However, ASIC is appealing that decision, further muddying the waters for lenders about the standard that is expected as they await the final outcome from the court.

In the meantime, ASIC has released updated guidance, which it says is "principles-based", with the aim of showing what actions a lender might take in particular circumstances to meet their responsible lending obligations, but not prescribing what has to be done in every case.

From the article there was one shining light a young woman entering the housing market, sensibly.
From the article:
For Michelle Winata, that balance meant purchasing land and building a house in another city, taking on a more affordable mortgage than if she had tried to jump straight into the Sydney market.

"Ideally the ultimate goal is that I can sell it and then buy a house in Sydney, because at the moment the Sydney prices are just too crazy," she said.

For now, she's waiting for construction to wrap up so she can contemplate her next move, and still enjoy a holiday in the meantime.

 

[sptrawler]

This article IMO, highlights the problem associated with fixing Sydney/Melbourne's run away house prices, without at the same time absolutely smashing the value of houses in every country town in Australia.
https://au.news.yahoo.com/home-pric...-10-years-ago-in-these-regions-014128606.html

From the article:
Worst-performing regions where values are less than they were 10 years ago

Source: RiskWise Property Research, CoreLogic
All the regions are in Western Australia, Queensland and the Northern Territory, Peleg said, noting that there were no regions in Sydney or Melbourne where prices were worth less than they were just five years ago.

In the majority of regions in NSW and Victoria, current prices are higher than they were in 2014 and earlier.

“This shows us very clearly that economy is crucial when it comes to driving property prices and that proximity to employment hubs that provide sustainable employment, for example Greater Sydney and Melbourne, carries lower risk,” he said.

I would say that in W.A, the median prices given on the chart, are actually higher than what is being achieved.

 

[Smurf1976]

I would say that in W.A, the median prices given on the chart, are actually higher than what is being achieved.

The situation in WA shows pretty clearly what happens to the wider economy and community when a key industry slows down, in WA's case that being the ending of the mining boom.

Knock out a pillar or two and everything else comes down with it.

 

[sptrawler]

Looks like people are saving, for another housing splurge in Sydney, Melbourne, sorry I mean Australia.

https://www.smh.com.au/money/invest...t-odds-with-weak-economy-20200122-p53trh.html

 

[Humid]

Looks like people are saving, for another housing splurge in Sydney, Melbourne, sorry I mean Australia.

https://www.smh.com.au/money/invest...t-odds-with-weak-economy-20200122-p53trh.html

Are surveys like polls.....

 

[sptrawler]

Are surveys like polls.....

Yes I take them with a grain of salt, I reckon the surveys are paid to get an outcome.

 

[sptrawler]

Sydney's mortgage debt is 30% higher than the national average, the annoying part is, the media want it to be everyone else's problem IMO.
Every banking adjustment, political policy and national rhetoric is focus on either Sydney or Melbourne.
Yet the fall out of those setting affects the whole of Australia, it is a bit like the China sneezes Australia gets a cold analogy, instead the Sydney market sneezes the rest of Australia's RE market gets a cold.
Just my opinion.

https://www.smh.com.au/business/ban...er-than-national-average-20200215-p5412l.html

 

[sptrawler]

Here is an article on housing affordability in Perth.
https://www.macrobusiness.com.au/2020/02/perth-bust-drives-housing-affordability-to-30-year-high/

 

[orr]

Why so little activity on this and so many other first order threads?
Anything with a potatoe patch (currently producing) is looking to have a few prospective buyers.

All those years of oiling the kalashnikov look like paying off.

 

[sptrawler]

Why so little activity on this and so many other first order threads?
Anything with a potatoe patch (currently producing) is looking to have a few prospective buyers.

All those years of oiling the kalashnikov look like paying off.

There will be some action in the property market, very shortly, IMO.

 

[againsthegrain]

There will be some action in the property market, very shortly, IMO.

Only problem making it even less liquid is people won't be too keen on attending auctions and open inspections to mix with the crowds

 

[moXJO]

House up the road from me sold in 2 weeks. Still moving quick on the market in good areas

 

[sptrawler]

House up the road from me sold in 2 weeks. Still moving quick on the market in good areas

Where is that? Sydney/Melbourne