SYD & MELB to fall 4% - Markets are 45 per cent overvalued

An article posted by SQN Research in the AFR resi section forecast that Sydney prices will fall as much as 4 percent in 2018 & Melbourne's house prices are expected to fall as much as 3 percent for the year, with a 1 percent growth in prices at best.

Canberra price movements will land somewhere between 1 and 4 percent, from previous predictions of 5 to 9 percent, and Brisbane has been downgraded to 0 to 3 percent from 3 to 7 percent.

However, the article suggests that SQM Research does not expect a general housing price crash to occur this year. The conditions required to create such a downturn are not in the housing market at present. They continue on to suggest that "Low unemployment and population growth will put a floor on prices "crashing".

Interesting read, what is everyone's opinion on the article and subject?

Sydney and Melbourne head for house price tumble

 

SQM keeps revising .

They may as well stop forecasting and focus to analytics of history.
NO idea
completely different to their previous forecast.

 

Fair enough, I'll take what I read from them with a grain of salt

 

His previous youtube forecast from January is different again.
So he revises every few months as he sees fit.



Here is the video i was talking about this a January revision.


In my humble opinion the market downturn due Credit crunch is making it hard , RC is also making it harder as it has put a huge amount of focus on lending practice and brokers.

Until credit becomes easier market will be stale.

If for too long it will damage the economy.

We will see the outcome.


We can all forecast than APRA eases of policies and things will change again.

I think it will take 12 months to see policies full affect and outcomes and for politicians and governing agencies to respond.

 

According to CoreLogic, Sydney is already at -3.66% YoY so SQN might be low balling it some, unless they believe it is somehow going to stabilise out of the blue.

 

You don't say, it is a forecast, a prediction of future outcomes, a forecast by nature should be dynamic as the variables change.

Really nothing to worry about, some noise is normal for any market, but that again depends on your timelines.

 

Booms are generally followed by corrections, usually fairly mild. It's fairly clear that Melbourne and Sydney have been booming for several years so a correction is to be expected.

From 2009 - 2011 Melbourne was booming. 2011-2012 there was a correction of roughly 10% and then stagnation until 2014.

So if prices drop by 4%, a few years from now nobody will really care.

All this does is create easier conditions under which to purchase. It's the window where vendors get nervous and are more willing to negotiate. You might have negative equity this time next year, but not a lot and the market will recover. The fundamentals haven't changed.

 

If they keep churning out figures they "might" get it right eventually.........

45% overvalued, oh please

SQM

 

Have to disagree with this comment, the fundamentals have changed significantly in the last 3 decades.

1. Lowest interest rates in history
2. Large % of loan books held by the majors are IO
3. Highest private debt to gdp in history for Australia and one of the highest in the world
4. Low or little reported inflation - cannot inflate the debt away
5. Little GDP growth
6. Stagnate wages - we are hardly competitive due to our high wages
7. High immigration - a win for property investors
8. Mining boom coming to end
9. China starting to slow - of concern
10. World debt levels at unprecedented levels
11. Dual incomes required to service a loan
12. The super pool to loan against has been expanded with SMSF

So I ask this, where is the next round of $$$$$ to come from to see constant growth in property over the next decade.

1. RBA could lower the rates, but would have little impact
2. Bank funding could increase causing a rise in rates without the RBA
3. FHB could access their super
4. Open the floodgates more for foreign investment in residential (this one alone could keep things ticking along)
5. Hard to predict the effect on property if the AUD dropped to below 0.65.

 

make enough predictions , youll eventually get one right!

 

World Population Clock: 7.6 Billion People (2018) - Worldometers

 

India Will Outgrow China In 2018, But Must Invest In Next-Generation Value Chains To Succeed

China is not the only growth market.

India will overtake China for population in a few years.

Than its GDP ia growing at 7% so a doubling of economy in 10 years.

So the largest country by population will be very wealthy and aspirational and is already getting their.

Their is not just 1 china.

 

China is our major trading partner, that is what I was referring to. But maybe I am on a property forum, where there is little understanding about macro economic effects on the property market.

Thanks for pointing out the world population, I thought it was only 1million.

 

lol @ 4% nd those that think all is going well....

it has dropped more than that already in heaps of places, and takes a lot longer to sell, people can deny, but proof is in pudding.....

 

Have you seen our trade figures lately?

Absolutely. India, Indonesia, Thailand, Vietnam...and Africa is on its way too

 

Really, our exports, wow China (not taking into consideration HK) is only 6 times larger than your next best guess.

 

From left to right: SQM research, Herron Todd White and BIS Shrapnel.

 

and more recent figures

 

Thanks Radson,

"Absolutely. India, Indonesia, Thailand, Vietnam...and Africa is on its way too"

Thanks for proving my point, china coughs and we could be in a little bit of trouble. But I am sure with combined totals of Indonesia + Thailand + Vietnam @ 5.1% they will save us if China gets a cold.