Property prices beginning to drop

Discussion in 'Property Market Economics' started by Property Baron, 18th Jun, 2020.

Join Australia's most dynamic and respected property investment community
  1. CSDS

    CSDS Well-Known Member

    Joined:
    25th Feb, 2017
    Posts:
    47
    Location:
    Melbourne, Victoria, Australia
    It will for many reasons:
    - The government will do everything in its power to restart immigration at previous or even higher levels
    - As badly as developed economies have been hit by COVID developing economies have had it worse. Just take a look at India. Economy in tatters - there are at least a couple of million people in that single country looking for the first ride out when borders reopen.
     
    Someguy, KFC_8 and Westie like this.
  2. 2FAST4U

    2FAST4U Well-Known Member

    Joined:
    3rd Jul, 2015
    Posts:
    2,304
    Location:
    Democratic People's Republic of Australia
    Apparently less people will be having kids due to economic conditions but that's unlikely to impact new builds in the short term future.

    https://www.smh.com.au/politics/fed...o-hit-budget-bottom-line-20200921-p55xqq.html

    "In a fresh challenge for Treasurer Josh Frydenberg ahead of the October 6 budget, which is expected to show a deficit in excess of $200 billion, new analysis of Australia's fertility rate suggests the nation could welcome 56,000 fewer babies a year...The average fertility rate for that five year period is expected to be 1.69 babies per woman - the lowest level on record".
     
    TAJ likes this.
  3. C-mac

    C-mac Well-Known Member

    Joined:
    26th Jun, 2015
    Posts:
    1,348
    Location:
    Sydney
    So in short, we seem to have done a great job of attracting immigration of folks who are "breeders", but even they are now economically so spooked; they are having less babies too?

    The interesting thing is; this aligns a bit with global demography trends being observed/played out over the last decade. I watched a documentary on it actually. It's the same reason why many demographers are predicting humanity will cap-out at 10 billion (or it may never actually hit that) and then start to go down and down after that.

    Whilst western countries birth rates have been weakening for decades; the more recent trend is many countries within Asia; along with many in South America (two continents that traditionally had much higher birth rates) are now starting to follow the same trend.

    This leaves only Africa and Middle East as the high birth rate locations on Earth. Whilst some African nations birthrates are massively exploding; others in Africa are doing the opposite. Middle East is also in the early stages of becoming a mixed-bag of high and low birth rate countries.

    Interesting times!

    Of course for Australia we may have to transition to just relying on importing working-age folks (even if they themselves have few or zero babies once they get here); to maintain a total population size that is at least "replacement rate" (which would need to be much higher than 1.61 average births per woman).
     
  4. Mark F

    Mark F Well-Known Member

    Joined:
    29th Jan, 2020
    Posts:
    1,029
    Location:
    Canberra
    With the projected rises in property prices, perhaps birth rates will drop as families will need two incomes for far longer to pay the higher mortgages needed to get on the property ladder. o_O
     
    C-mac likes this.
  5. Illusivedreams

    Illusivedreams Well-Known Member

    Joined:
    3rd Oct, 2017
    Posts:
    2,454
    Location:
    Sydney
    Why is it FOMO?

    Sounds like SMH article.

    Simply people have had a change of circumstances and are now changing behaviors based on work family environment.

    Supply low demand increase.
    Price goes
     
    Robbo80 likes this.
  6. TAJ

    TAJ Well-Known Member

    Joined:
    10th Oct, 2017
    Posts:
    1,214
    Location:
    Northern NSW
    I see that any intake of immigrants will put further strain on the current infrastructure problems facing our major cities. Many posters on here decry the continual traffic congestion for starters. It would put greater pressure on water supplies, electricity consumption, sewage outlets etc.
    We have seen for decades that these new arrivals tend to congregate in the major cities, obviously for employment opportunities and to connect with communities of the same nationality. It's not like they move to regional areas, unless instructed to by the powers that be.
    It would be advantageous in my eyes to put in place some infrastructure projects that benefit the population we already have, before creating more headaches by continually overcrowding and depleting the resources we have currently.
     
    AlphabetSoup and KFC_8 like this.
  7. jaybean

    jaybean Well-Known Member

    Joined:
    20th Jun, 2015
    Posts:
    4,752
    Location:
    Here!
    Ok so I have some "on the ground" feedback on Sydney inner west (Burwood, Strathfield, Ashfield, Croydon etc). I've been researching like mad over the last few months getting ready for my next purchase (apartment). It's been difficult to keep a finger on the pulse because any data between March and late June is basically noise given how turbulent things were. I know things are still turbulent but I've had to draw an (admittedly) arbitrary line in the calendar to get a sense of where things are.

    The open homes have been very popular, which got me worried we would be entering right into a period of strong growth. But having observed prices over the last month or two I'd say we're roughly on par with early 2020 prices - not a drop, but not a huge ramp up either. I'm feeling a bit more confident now, I thought these low interest rates would create some craziness out there but it seems ok so far.
     
    Danyool likes this.
  8. KFC_8

    KFC_8 Active Member

    Joined:
    6th Apr, 2020
    Posts:
    27
    Location:
    Sydney
    I know it is an ad-hoc observation, but I know many many of my friends and colleagues between 25-36 that are expecting COVID babies. With nothing to do, for these married couples...

    I am expecting birthrates in the coming 6 - 12 months to increase.
     
    craigc, Illusivedreams, Jana and 2 others like this.
  9. SydneytoMelbourne

    SydneytoMelbourne Well-Known Member

    Joined:
    10th Jan, 2020
    Posts:
    53
    Location:
    Sydney

    Whilst I agree broadly that having new immigrants move to regional areas where the supply and demand for jobs is better than metro areas, increased migration overall has proven to be a positive for the economy, which in turn allows the Government to spend more on infrastructure. Blaming immigrants for congestion, house prices is a bit of a cop out for me, they're a huge part of our success story if anything.

    Australian governments are going huge on infrastructure spend at the moment, if anything we need more migration to allow this to continue.
     
    rizzle and CSDS like this.
  10. CSDS

    CSDS Well-Known Member

    Joined:
    25th Feb, 2017
    Posts:
    47
    Location:
    Melbourne, Victoria, Australia
    Haha. The fact we are discussing it on this forum shows how integral population growth is to Australia's continued financial wellbeing.

    Migrants:
    - Increase aggregate demand in the economy
    - Are younger on average
    - Are more skilled on average
    - Are more likely to start families
    - Are more likely to spend money on acquiring skills
    - Are happy to do jobs locals dont want to
    - Are happy to do jobs locals dont want to for less pay

    Big business and big politics will win this debate I'm afraid.
     
  11. Lacrim

    Lacrim Well-Known Member

    Joined:
    25th Jul, 2015
    Posts:
    6,175
    Location:
    Australia
    Well if you believe Bill Evans, and he's one of the economists I listen attentively to given his impeccable track record, you have no more than a 6-12 month (starting now) window to secure something before prices start moving up.

    The most opportune period will be from November - April as repayment pauses end. Once distressed sellers/properties are sold off, and the migration tap starts being turned on again, overseas students start returning, a lot of people will be left fighting over a comparatively small pool of properties, and coupled with mortgage rates < 2%, prices are going to rise quickly and sharply.

    This all hinges on a successful vaccine being announced of course - and we'll know that within the next month or two I reckon. Very fluid situation.
     
    Last edited: 23rd Sep, 2020
  12. jaybean

    jaybean Well-Known Member

    Joined:
    20th Jun, 2015
    Posts:
    4,752
    Location:
    Here!
    Yeah I’m ready to go the moment I find one I like. So I think I’ll have it in the bag within 4-6 months. Plus this is for my PPOR so I’m less price sensitive. If a vaccine isn’t found and it falls another 50k I won’t break a sweat. That’s one of the advantages of looking for a PPOR, you can loosen your ******* just a little.
     
  13. Lacrim

    Lacrim Well-Known Member

    Joined:
    25th Jul, 2015
    Posts:
    6,175
    Location:
    Australia
    My reco is the best time to buy will be between late Nov and early Jan.
     
  14. jaybean

    jaybean Well-Known Member

    Joined:
    20th Jun, 2015
    Posts:
    4,752
    Location:
    Here!
    The trouble is waiting for stock. Very slow going right now. I'm checking like 20 times a day...!
     
  15. jaybean

    jaybean Well-Known Member

    Joined:
    20th Jun, 2015
    Posts:
    4,752
    Location:
    Here!
    BTW isn't Summer / Xmas supposed to be the busiest season for house hunting? I guess if its subdued in a few months then it'll really mean the market is slow.
     
  16. Lacrim

    Lacrim Well-Known Member

    Joined:
    25th Jul, 2015
    Posts:
    6,175
    Location:
    Australia
    Typically Dec is a slow month with people going on holidays and vendors who haven't sold in Nov getting a little nervous bc they want to offload before the NY. It's normally a great time to buy as the competition withers away the closer you get to Xmas.

    However due to COVID, less people I think will be leaving the city so you may find this year a little tough going.
     
  17. Primary341

    Primary341 Well-Known Member

    Joined:
    18th Jan, 2019
    Posts:
    70
    Location:
    Melbourne
  18. jaybean

    jaybean Well-Known Member

    Joined:
    20th Jun, 2015
    Posts:
    4,752
    Location:
    Here!
  19. Primary341

    Primary341 Well-Known Member

    Joined:
    18th Jan, 2019
    Posts:
    70
    Location:
    Melbourne
    "View agent price guide"
     
  20. jaybean

    jaybean Well-Known Member

    Joined:
    20th Jun, 2015
    Posts:
    4,752
    Location:
    Here!
    No kidding. Thanks
     
    Primary341 likes this.

Buy Property Interstate WITHOUT Dropping $15k On Buyers Agents Each Time! Helping People Achieve PASSIVE INCOME Using Our Unique Data-Driven System, So You Can Confidently Buy Top 5% Growth & Cashflow Property, Anywhere In Australia