COVID-19 impacts on the Australian economy & housing market

and in areas like Western Sydney, something had already started to happen with vacancies....

 

Sydney wide vacancy rates have been increasing over the last couple of years. It'll scream higher once it's safe enough for people to move out.

 

How do they capture the values? Based on settlement date? Contract date?

0 - 1% increase in March is too positive amidst all these doom and gloom talks.

 

There is some lag to the corelogic index. When the market turned around from the prev downturn, I noticed it took quite a while to show up, and when it did it was smoothed compared to reality of what I was seeing locally on the ground.

 

much less auctions probably

 

Prediction of 50% fall in Australian property mkt seems unlikely. What is the credibility of Harry dent who predicted last US dooms day?

www.dailymail.co.uk/news/article-8182563/amp/Sydney-Melbourne-house-prices-tipped-crash-50-cent-coronavirus-sparks-depression.html

 

Discussion in Is he finally right? Note that the Daily Mail is the last place to getting reliable information. When tomorrow they run a headline that says "Could eating betroot cure Coronavirus?", the answer is almost certainly not, as always is the case with their 'could' headlines. And when they say "a leading economist said ....", the subtext is that after phoning nine others, they finally found one who said what they wanted.

 

A leading scientist said, being alive is a risk to getting covid19. Hmmmm what should we do?

 

I'm aware I'm but the standard poster around here.

But are you seriously suggesting an investor buying an existing home increases housing supply? Seriously? The house that is already there and bring lived in already exists! Whether it becomes an investment or PPOR is utterly irrelevant in the overall supply-demand balance of housing. It's not changing the number of houses in existence or the number of people that need housing.

And of course more investors buying existing houses without expanding the total overall number of houses means less people owning their PPOR. That's just basic maths.

 

Your statement:
"Indeed, an investor is less likely to buy a house that is in demand by owner occupiers because the OO doesn't need to show a return on their investment and the investor isn't likely to pay more than it's worth and drive up the price."
Doesn't ring true so much for the first home buyer demographic. Given the lower levels of cash there is often a much larger spectrum of competition in this sector. Right now the FHB's are coming back however the past 10 years have seen them struggle to compete.

 

Exactly. Speak to any decent number of under 40s and your realise a huge number have given up on any hope of buying a house because of the cost. They rent off investors who are getting tax breaks from the government. This type of investing does absolutely nothing to address supply-demand issues so does nothing to reduce rents.

 

They aren't stealing they're buying them at higher prices than many owner occupiers can afford. And getting government tax breaks to do that. Owner occupiers can't tax deduct they're interest and expenses.

And I'm so sorry that you can't handle a single person disagreeing with your opinion and need an echo chamber of confirmation. I didn't realise this forum was just a shrine to negative gearing.

 

1. I'm 31 so by the time I'd finished my studies and got together savings (~2017) prices were already insane.
2. Deliberately running an investment at a loss isn't smart in my opinion. When the underlying asset is at historically high prices it's downright insane.
3. I try not to be a hypocrite.
4. There were and are many far better investments out there and so I invested my savings in them (mainly overseas shares) instead and have done far better than an investment property would've done in that time.

 

https://www.westpac.com.au/docs/pdf/aw/economics-research/WestpacWeekly.pdf

Westpac are predicting unemployment to reach 11.1%.

"Using this analysis we estimate that there will be 814k in job losses in the June quarter lifting the unemployment rate to 11.1%. Working through our GDP estimates on an industry basis and acknowledging that output is not always aligned with employment this approach points to a contraction in GDP of 3.5% in the June quarter".

It's hard to see how property is immune to a downturn in this scenario. Migration will also be much lower for the next 6 months at least (if not a couple of years).

 

Yep. The real worry is that looks optimistic. USA had 10 million new unemployment claims in 2 weeks so they've already hit 10% unemployment and it's still rising fast. Our government payments should help keep some people employed but I don't see how unemployment doesn't go over 15% at least for a brief period.

 

yeah its a weird situation. You might be "employed" if you are stood down and are on JobKeeper payments but what does that mean for how you view yourself and plan for the next 6-12months? Some probably see it as temporary but there would also be those who see their employer on life support and no job to come back to. How you turn JobKeeper off and not have a spike in the unemployment rate I have no idea.