Interesting read regarding whats next on house pricing

I have not posted on here for some time as some of you know, partly due to the fact that I am very busy and partly because I gave up on the bias that existed on these boards due to certain users for quite some time and not much was being done about it.

In any case, festive season is upon us so Merry Christmas to you and hopefully 2021 will be a great year.

Here is the link on the article I was reading today:

Are house prices poised to surge?

I use these guys mainly for trading as thats what I do more so than property these days, I have found them to be pretty spot on. They are far more accurate than clown-logic that was predicting 50% drop in house prices during covid or whatever joke they were thinking of.

I anticipate 10% to 20% increase across major cities into 2021.

I have a duplex build coming up which I might post about on the other board.

 

Interesting article, but their modelling misses the biggest factor that nobody seems to mention.
Covid is making Australia (and perhaps NZ), by far, the most desirable places to live on the planet. No-where, apart from here, can be considered even relatively safe to bring up children. People comply with the law here and have a mindset that reasonably looks after others. If you were a millionaire in India, China or Peru, where would you like to live?
We will have as many rich immigrants (and not so rich immigrants) as our government will allow.
Property will go crazy here.

 

I agree with your point, I suppose they are perhaps more data and pattern driven, being more focused on shares, than looking at some of the stuff outside as well.

But in any case, what you are saying further proves the point.

 

very interesting read.

 

What about the psychological bake in this year has caused. If assets rise in bad times, recession, pandemic, whatever...do people now expected it to rise at ALL times.?

There’s a camp with an expectation that in the future the pain will come. Well, with deferrals now a thing and the regulators already accounting for it, why would pain come later? If prices do begin to fall , listings may just retrace again. People will only sell when it suits them, or , they have to.

We’ve got listing at historic lows now at a time almost everyone would expect them to be high.Almost every expert has got this wrong, and from here, it looks like nothing can derail this thing if the government keeps the game going.

 

Really good observation. The pain in real estate comes after the market consensus becomes that no matter what happens, you can't lose money in real estate. Then the crash comes.

I am optimistic for property just because the property cycle isn't due for a correction for a few more years yet. But yes, it will lure people into a false understanding that real estate never goes down. Those people will get burned.

 

I believe that we will no longer have a “market”.
Each city will divide into many sub markets which will react independently of the others.
The high end. Houses and home units
The middle range houses
The middle range home units
Brand new house and land
In Sydney we have seen hysteria in the brand new house and land market which most suits first home buyers. Yet the home unit market is back-pedalling. Middle range houses are flying out the door but only trophy homes are garnering the record prices whilst other high end homes sit for months.
I believe that broad sweeping statements will be less relevant due to COVID, the effect of China and the compulsion to seek more assets in an ever increasing economy.

 

Serviceability vs LTI hasn’t got the analysis it deserves. If rates go negative, we could be in for another 20-30 year run.

The bigger the loan gets the more impact the rate cut has on the week to week budget. I don’t think enough people are looking at this. It was Einstein who talked about compound interest and he did it for a reason. If you take a clip in mortgage rates, and apply it to a bigger loan over a longer period you get a bigger (Better) effect on serviceability.

If this is the way it goes it will be like Howard and Costello 2.0 but with more debt and anxiety.They will probably give out Prozac with the home loan docs.

Then comes the debt jubilee, precisely at the time the rich can’t put enough forged iron and security (by then Drones) at the front entrance...and that will be a show like no other.I’m an 80s baby though, so I don’t think I’ll see it. If I do I’ll probably be a furious retiree, i won’t hold a candle to a boomer though, they’re a different animal.