South of Sydney
The future of Australian property prices
- Thread starter Joe Blow
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I can't really make sense of the belief that property prices will still hold or soar. There seem to be too many fundamentals that go against that possibility
1) The collapse of the stock market, just to date, has wiped out hundreds of billions of dollars of value from peoples nominal wealth. That has to be causing a squeeze
2) Almost all businesses is suffering from collapsed demand . That is wages, profits and even viability.
3) There has to be increasing forced sales of assets. An this at a time when points 1 and 2 are in play. I'm sure bottom feeders will be out but that just crystallizes distress prices on property sales
4) Banks would be reeling at the moment. I don't want to think at how tough their credit guidelines would be with regard to repayments.
5) There has to be risk of widespread defaults on rents and mortgages as business closures take effect.
Am I missing something ?
1) The collapse of the stock market, just to date, has wiped out hundreds of billions of dollars of value from peoples nominal wealth. That has to be causing a squeeze
2) Almost all businesses is suffering from collapsed demand . That is wages, profits and even viability.
3) There has to be increasing forced sales of assets. An this at a time when points 1 and 2 are in play. I'm sure bottom feeders will be out but that just crystallizes distress prices on property sales
4) Banks would be reeling at the moment. I don't want to think at how tough their credit guidelines would be with regard to repayments.
5) There has to be risk of widespread defaults on rents and mortgages as business closures take effect.
Am I missing something ?
Safe as houses.....I can't really make sense of the belief that property prices will still hold or soar. There seem to be too many fundamentals that go against that possibility
1) The collapse of the stock market, just to date, has wiped out hundreds of billions of dollars of value from peoples nominal wealth. That has to be causing a squeeze
2) Almost all businesses is suffering from collapsed demand . That is wages, profits and even viability.
3) There has to be increasing forced sales of assets. An this at a time when points 1 and 2 are in play. I'm sure bottom feeders will be out but that just crystallizes distress prices on property sales
4) Banks would be reeling at the moment. I don't want to think at how tough their credit guidelines would be with regard to repayments.
5) There has to be risk of widespread defaults on rents and mortgages as business closures take effect.
Am I missing something ?
Money goes into something.
Personally I don't see prices making new highs, or holding at highs.
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I heard that some people are not paying their rent, stocking up on food and supplies takes away the monthly rent especially when you live month by month. When it comes to eating or paying somebody else mortgage its a simple choice. Then its a ripple effect.... if the IP is not paying itself off it must go even at a loss
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They are already tough enough. People will start to become unqualified for loans as their wage receipts show inconsistencies. Banks may 'help out' by allowing people to become interest only on existing P&I loans for a period.
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From my experience of renting, you are spot on, the last person in the line is the landlord.
Those heavily geared properties in Sydney, Melbourne are going to hurt, even if the landlord is overseas.
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From a Research Fellow in Real Estate.
How will coronavirus affect Australia's real estate market and house prices?
It will lose momentum and there could be falls. But it will be a short, sharp shock
https://www.theguardian.com/austral...ustralias-real-estate-market-and-house-prices
How will coronavirus affect Australia's real estate market and house prices?
It will lose momentum and there could be falls. But it will be a short, sharp shock
https://www.theguardian.com/austral...ustralias-real-estate-market-and-house-prices
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I would think that house prices would stagnate or decline slowly and not by much, there will be the opportunistic buy of a desperate sale but the overall transaction numbers would be declining. Hard to see any increases, as buyers have lost a lot buying power AND confidence, sellers will be desperate to hold their assets, as they would have seen their 'share asset' value ripped away from them. I think they would chat the bank about their loan before plugging a for sale sign into the front lawn. At least I would be, as their are elements of monetary easing in the community.
But like most people in this environment I could easily be way off the mark.
But like most people in this environment I could easily be way off the mark.
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IMO it will completely depend on how geared people are, getting rent off people in hard times, becomes very difficult.
If we don't get the out of control infection rate like Italy, you may be spot on and we may slide through this relatively unscathed, that would be nice.
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So why not mortgage holders in the same position, not pay the mortgage? Being a tenant doesn't mean you wont honour you commitment.
The answer is to negotiate a way forward, not just use an excuse and cry poor (when you are perfectly capable) to bail out of commitment.
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It is certainly deflating some of the cheap money bloating, that has occured.
The other benefit, if it hurts property investors, it will make them a bit more circumspect before jumping into a ponzi scheme next time. IMO
After seeing people negotiating in the supermarket recently I don’t hold a lot of faith in much
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For a lot of property investors, this will be the first time they will have experienced something like this, it will be a huge shock for some.IMO
By the time this is finished the Banks will be wanting more equity from a lot of investors, to meet the liquidity requirements, then it will get interesting. Hopefully the virus goes through before the financial strain really hits.
Just my opinion.
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? Did you enjoy the stock market crash?
Crash means damage and hurt.
A more manageable solution I would suggest.It is certainly deflating some of the cheap money bloating, that has occured.
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There is a lot of 'fat' in the system, especially in Sydney, Melbourne, wages are indirectly linked to house prices. So something has to give IMO.
The interests of young people who don't own a house aren't aligned with the interests of people with houses. Boomers etc. cheered house prices on the way up. Why shouldn't millennials cheer them on the way down?
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Nothing wrong with that, it happens all the time, look back to the 1987 crash, the GFC, don't feel as though you are missing out or will miss out in the future.
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Crash means a return to equilibrium by clearing out unsustainable excess.
Those who get hurt will be those who took extravagant risk at the expense of taxpayer subsidies like negative gearing, leveraging tax discounted superannuation and at the expense of affordability for other generations.
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A crash also means a return to better efficiency, atm we are far from it.
