The future of Australian property prices

[Tyler Durden]

Up till recently, it was thought that the increasing property prices were driven by migration. Now we have no migration but significantly increasing prices. It seems obvious that the catalyst is now only the low interest rates in general and in the regional areas a mix of interest rates and demand from people exiting the capital cities.
So the question will remain, what happens to property prices when interest rates start slowly moving up in two to three years or so with low migration?

But where are people getting the money from? Increase in prices means more money from these buyers, in the middle of a pandemic where job losses seems like the trend. Are we seeing the effects of government money printing?

 

[qldfrog]

But where are people getting the money from? Increase in prices means more money from these buyers, in the middle of a pandemic where job losses seems like the trend. Are we seeing the effects of government money printing?

Yes to the last point.

 

[Country Lad]

Yes to the last point.

And the banks are lending like there is no tomorrow apparently with loose credit checks. Ring any bells?

 

[againsthegrain]

And the banks are lending like there is no tomorrow apparently with loose credit checks. Ring any bells?

We all know it just don't want to believe it

 

[divs4ever]

We all know it just don't want to believe it

oh i believe it , i just haven't loaded up on 'easy credit ' i have also reduced my exposure to the big 4 banks ( and hoping to reduce it even )

i have reduced my exposure to debt ( both as a buyer and as a customer ) my main debt play is CCP although i hope CCV will eventually come good as well

interesting times

when this all unravels , who will be left to pay the taxes ( many will be absolutely broke )

 

[againsthegrain]

That is easy, mass immigration what has and always will be the answer to all our problems

 

[divs4ever]

Up till recently, it was thought that the increasing property prices were driven by migration. Now we have no migration but significantly increasing prices. It seems obvious that the catalyst is now only the low interest rates in general and in the regional areas a mix of interest rates and demand from people exiting the capital cities.
So the question will remain, what happens to property prices when interest rates start slowly moving up in two to three years or so with low migration?

i disagree we still have migration , but it is more obvious it is internal migration , more heading for a 'tree-change ' some heading towards the city chasing hopes and dreams .

i think property prices will move more in time with employment and wages ( you still have to pay your rent/mortgage , eventually , or be 'homeless ' )

if enough are 'homeless ' or in shared accommodation there will be less upward pressure from demand , but maybe more pressure from inflation

 

[divs4ever]

That is easy, mass immigration what has and always will be the answer to all our problems

but certain people ( politicians and bureaucrats ) aren't leaving the nation it big enough numbers , so the problem isn't being reduced

 

[Country Lad]

i disagree we still have migration , but it is more obvious it is internal migration , more heading for a 'tree-change ' some heading towards the city chasing hopes and dreams .

Yes, that's migration but as it is internal, it is more like churn.

 

[divs4ever]

churn , mostly because reproduction rates are falling , indeed correct

now previously the recent trend was to outsource that reproduction chore to third world nations , which we helpfully assisted to plunge into war , making them unpleasant places to stay , and accepting some new wonderfully cheap labour ( no matter qualifications and skills they already possessed )


HOWEVER that 'outsourced population increase machine ' has been paused currently and MIGHT be restricted permanently depending on how the world navigates the current financial event ( which most think is about a virus )

will Australia need international migration , if automation is ramped up ( like say at RIO or even at WOW and COL distribution centres )

 

[MovingAverage]

outsource that reproduction

Interesting perspective...never thought of it as "outsourced", but does make sense

 

[divs4ever]

Interesting perspective...never thought of it as "outsourced", but does make sense

i always knew i was ' wired different ' it does nothing for my popularity , but sometimes creates an extra profit

now IF you look at fundamental biology , the removal of survival pressure also reduces the urge to reproduce ( excessively )

if the powers that be , really wanted to reduce the global population , all that has to happen is to raise the world to middle class , and large numbers of people would reduce the reproduction to 'replacement rates '

but where is the 'god-like status ' when everybody can afford a mid-range BMW and a reliable broadband ( or better ) and a Super fund that will cover your later years healthcare

 

[qldfrog]

i always knew i was ' wired different ' it does nothing for my popularity , but sometimes creates an extra profit

now IF you look at fundamental biology , the removal of survival pressure also reduces the urge to reproduce ( excessively )

if the powers that be , really wanted to reduce the global population , all that has to happen is to raise the world to middle class , and large numbers of people would reduce the reproduction to 'replacement rates '

but where is the 'god-like status ' when everybody can afford a mid-range BMW and a reliable broadband ( or better ) and a Super fund that will cover your later years healthcare

You forget the ideological and religious "win by number" factor:
Islam and Africa, India Pakistan and Bangladesh..nor forgetting Indonesia..next door

 

[divs4ever]

that USED to be the mantra of one particular Christian sect also , until they realized the faithful dying without heirs were more likely to remember the church in the will , and they love money as well as power

a lesser known fact is several African tribes have been Christian for a very long time maybe even before the start of the British Empire

 

[qldfrog]

that USED to be the mantra of one particular Christian sect also , until they realized the faithful dying without heirs were more likely to remember the church in the will , and they love money as well as power

a lesser known fact is several African tribes have been Christian for a very long time maybe even before the start of the British Empire

Well..in my youth former African colonies were Catholic mostly. Now they are muslim... 1 generation

 

[moXJO]

Talking to a real estate acquaintance the other day and he told me a industrial zoned land parcel that was on market for $3mill ended up being bid up by two developers that disliked one another to $6mill.

Seller was obviously ecstatic.

China is about to pop its property bubble. Will make it interesting for us.

 

[MovingAverage]

i always knew i was ' wired different ' it does nothing for my popularity , but sometimes creates an extra profit

now IF you look at fundamental biology , the removal of survival pressure also reduces the urge to reproduce ( excessively )

if the powers that be , really wanted to reduce the global population , all that has to happen is to raise the world to middle class , and large numbers of people would reduce the reproduction to 'replacement rates '

but where is the 'god-like status ' when everybody can afford a mid-range BMW and a reliable broadband ( or better ) and a Super fund that will cover your later years healthcare

Who gives a **** about popularity....no good comes from appealing to the masses unless you're a bloody politician.

I hear you on survival pressure...it's through adversity that we grow.

 

[MovingAverage]

And the banks are lending like there is no tomorrow apparently with loose credit checks. Ring any bells?

and people think negative gearing is the root of all our property problems...hahaha. People need to take a good hard look at the elephant in the room that is easy monetary policies and cheap easy money.

 

[divs4ever]

well in my humble opinion , ' easy money ' helps you to lose respect for money , and the effort required to earn it

and that leads you into a dangerous vortex

 

[sptrawler]

I wonder if the covid driven migration to the bush can be sustained?

Work, rest and play in regions: Mars calls for sweeteners to help young people go bush

COVID-19 and big-city costs of living are making the regions more attractive to young people. Now the maker of Mars and Snickers says we need to invest more in skills and bush infrastructure.

www.theage.com.au

From the article:
The overall number of people working in manufacturing has barely changed over the past two years, but in food manufacturing it has climbed 6 per cent to more than 222,000. Many of those jobs are in regional areas.
Mars, which has production sites in towns such as Wodonga and Ballarat in regional Victoria, has conducted survey work to find out if people – particularly STEM-trained young Australians – are prepared to move to the regions.

Its survey of 1000 people studying or working in manufacturing, trade or STEM (science, technology, engineering and maths) careers found up to 79 per cent of Millennials were open to the idea of moving bush.
Loading
The main reasons for moving were the cost of living (cited by 49 per cent), housing prices (48 per cent) and a change in lifestyle pace (45 per cent).
People living in NSW (56 per cent) and Victoria (53 per cent) were more open to a tree change than people in other parts of the country.
COVID-19 was mentioned by 69 per cent of Victorian survey members and by 63 per cent of those from NSW as a reason to consider moving.

The federal government’s peak infrastructure agency, Infrastructure Australia, last week released a major report in which it noted the largest exodus of people to regional areas from major cities since the 19th century required a rethink of how infrastructure is put in place.
That exodus has been partly driven by high house prices.

The median house value in Sydney has climbed by $307,000 over the past year, or $843 a day. Melbourne’s median house value has jumped by $173,000 over the same period, while in Hobart it has increased by $169,000.
In some areas, such as regional NSW and regional Tasmania, prices have increased more in percentage terms than capitals. But they are still far cheaper.
And in all regions, the proportion of monthly income used to pay the mortgage is substantially lower than in a capital city.