60 Minutes

This is an old piece isnt it?

 

not that old

 

Sure.....but was hyperbole then....is hyperbole now.

 

Yeah, it was produced/shown in September 2018. One of their “predictions“ was:

“On 60 MINUTES,Tom Steinfort speaks with real estate and finance experts who predict property prices could slide by as much as 40 per cent in the next year.”​

https://www.google.com.au/amp/s/amp.nine.com.au/article/65fc9604-cebb-4730-ad36-de22297301d7

It is now nearly a year since the above prediction was supposed to occur PLUS we have COVID-19 (which they didn’t predict ).

Where is our 40% drop?

 

Could COVID-19 actually be the trigger?

We have record levels of household debt. After COVID-19, will there be enough jobs to service all that debt?

 

Probably worth looking at auction clearance rates At the moment, Melb and Syd had a hit. As they say, markets within markets

 

I am not an economist so I have no idea .

BTW, they don’t either .

I would suggest you answer the following three questions:

1. What do you think would happen to the Australian economy if the property market dropped 40%?
   
2. Do you think any Australian Government would allow that to happen?
3. If they did, what would happen to them at the next election? the one after that? the one after that?

Now you can probably guess my answer .

 

Yeah it’s funny, back when this aired the skeptics said 40% declines in Melbourne are unlikely unless a worst case scenario occurred - a massive global shock, a black swan event, sky rocketing unemployment, a complete halt to immigration, declining rents, everything shut down and people forced into their homes... Now, unbelievably the worst event has occurred yet things still remain stable (downward but stable). Once this is over and the market has only dipped 5-10% They’ll have nothing to warn against because we’ve weathered it all and come out the other end unscathed!

 

The 60 min report was produced before the 2019 election where so many people believed Labor was going to win and no more negative gearing or franking credits

What happened to real estate after the election where the miracle happened to the LNP?

House price rises (maybe not the units where there are too many developments in the area)

Since COVID started, the banks are sponsored by the RBA 0.25% rates for years to come and plenty of $$$ putting in for Jobs and Growth (Keeper, Seeker, Builder, Trainer and more to come when needed) and mortgage repayment deferrals for months

Wishful thinking property market will drop by 40% in the east coast

 

i dont think 40% drop, but covid is not over, who knows who will get second waves and more lock downs???, until we actually see how it impacts on our gdp and job numbers Its just guess work

I think unemployment 13%, 2021 will be interesting

 

We also had interest rate drops this helped significantly

 

With 459 new Covid cases today it’s been suggested the lockdown will last longer than 6 weeks. Maybe a gradual re-opening in September. There doesn’t seem to be too much concern about all this. Shane Oliver hasn’t changed his prediction despite initially saying a 2nd lockdown would bring back a base case of 20% falls. Now that’s it’s happened and it’s obvious nobody believes the corona scam 5-10% declines remains the assumption.

 

? Who knows, its too early.

my point is that its not over, there is talk of further extension on lockdown in Melb? and No one saw this coming? How many more lockdowns? Any other States??

Oliver accounted for a second lockdown what if we have a third or fourth lockdown. Perhaps PM wont allow this??? As it wont be sustainable?? What’s the exit plan...?

now we have new wave in Syd and BLM fighting in court, more protests??

Too many unknowns

 

I wonder if the banks have changed their tune. This was from May:

 

I can't see a double-digit drop house prices, but can see a 20-30% drop in apartments and commercial real estate.

- People who have lost jobs will be forced to sell houses when they are asked to pay off their loans and can't. That will be the force to drive down house prices.
However:
- People who have retained jobs have saved money during this period. I expect a lot of young people have saved deposits when without lockdowns they probably weren't close. Deposits are still the main limiting factor for buying.
- Millennials were more about location than land size compared to boomers, I can see Millennials rethinking that to some degree and many couples will settle down faster because of this experience. Means people in apartments will sell to buy places with outside space and 1.5 living/bed/study rooms per person.

 

Nothing to do with Oz market but US market is hot

I have 6 under contract this week, only 1 advertised under contract in 2 days above asking price. Others took one phone call and US investors fighting for them

 

Where abouts in the US?

Yeah US seems like the same trajectory before COVID except there was a couple month dip.

 

It will be dependent on which State and the economic impact. At the moment I expect Melb to be hardest hit. To say 30% across all States I think will be a stretch

On the flip side I would not be buying in Melb atm, too risky