'The worst is yet to come': House prices fall by fastest rate in six years

Discussion in 'Property Market Economics' started by Pete Arendt, 1st Aug, 2018.

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  1. Pete Arendt

    Pete Arendt Well-Known Member

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    'The worst is yet to come': House prices fall by fastest rate in six years - The Age, 1st August 2018.

    House prices have fallen at their fastest rate in more than six years, fuelling concerns that prices in Sydney and Melbourne may fall "too far, too quickly", hurt economic growth and drive anxiety among policymakers.

    The market now predicts house prices could fall by more than 10 per cent in Sydney and Melbourne from their peak by the time the market stabilises in 2019. They have already been falling for 10 months straight.


    How bad do you think it will get?
     
  2. Noobieboy

    Noobieboy Well-Known Member

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    Another amazing prediction. Not that long ago they were predicting house prices to be in $1.5 million. Truth to be the said nobody has a clue where we are heading, how far and how fast. It’s all assumptions that are not worth their ink on paper.

    If they start falling to fast regulators would step in.
     
  3. Sackie

    Sackie Well-Known Member

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    The best is yet to come.
     
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  4. Tonibell

    Tonibell Well-Known Member

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    A fall from 10% at the peak would be nothing to worry about - I think it will fall a bit more than that - but most like will still be better off holding on through it if you casn.
     
  5. Blueskies

    Blueskies Well-Known Member

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    Starting to become a bit of a self fulfilling prophecy I think. Media is getting more and more negative, so general sentiment definitely shifting.

    My takeaway - Resiliance in Brisbane! Once the mood turns positive good chance Brisbane will be the first cab off the rank for the next boom cycle.
     
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  6. Silverson

    Silverson Well-Known Member

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    The party hasn't even started imo, we will see gradual decreases in prices over the next 18 months in Melb n Sydney I think.
    It will not be end of days stuff more like a sideway trajectory with the odd minor dip. Unless credit starts becoming easier to obtain the sideways/down will be the new normal for a little while.
    If sentiment turns greatly and gets abit of momentum then we may see larger and quicker decreases, I doubt it will be US gfc type corrections but you never know, our infatuation with debt has gotten scarily big!

    If prices stay steady develop/improve/increase income from existing sites.
    If prices drop drastically, buy again, that's my plan
     
  7. Kangabanga

    Kangabanga Well-Known Member

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    At the moment, if prices fall too fast people will just blame it on irresponsible lending by the banks and compare it to the American gfc mortgage lending situation.

    APRA will just sit tight. Banks can't do much except raise rates now that Americans look set to raise rates as scheduled..

    RBA will drop\increase rates according to how the economy performs. They are not concerned if house prices drop, so long as the GDP growth continues at around 2%-3% range and unemployment numbers don't suddenly Spike up..

    But it's been almost a year and only 5%+ drop in Sydney prices YoY, corelogic numbers. Smaller drops in most other cities.CoreLogic Home Value Index - Monthly Indices | CoreLogic

    That looks like a slow controlled drop of overheated market/s. Things may get worse next year but unless GDP growth etc... is impacted, RBA won't do anything.
     
  8. Perthguy

    Perthguy Well-Known Member

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    End of the world!
     
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  9. Ko Ko Naing

    Ko Ko Naing Well-Known Member

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    I still don't get why a lot of people think Australia is made up of just Sydney and Melbourne. There are many other cities that are steady and going strong like Hobart and regional cities like Ballarat and Bendigo to some extent. Someone with on-the-ground knowledge will laugh at those general comments/news saying house prices are falling, property market is gonna crash, etc.
     
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  10. Sackie

    Sackie Well-Known Member

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    Haven't you heard? Australia is only 1 market.
     
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  11. hammer

    hammer Well-Known Member

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    This times a zillion.

    The media is Sydney-centric. A 5 percent drop from ludicrously high prices is not unexpected...to put it mildly.

    Perth, Darwin and lots of regionals have already done their Dash. After a 30 percent drop, things are starting to look up (if you squint sideways)...but then again these cities don't seem to exist in the media...


    Perth and Darwin dropped 30 percent.
     
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  13. 2FAST4U

    2FAST4U Well-Known Member

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  14. DrunkSailor

    DrunkSailor Well-Known Member

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    What was it like during the previous downturn (2010)? Was the media this hysterical?
     
  15. 2FAST4U

    2FAST4U Well-Known Member

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    2010 was different circumstances. The hysteria is mainly due to the huge booms in Melb/Sydney, which has all but locked out average income earners from home ownership.
     
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  16. DrunkSailor

    DrunkSailor Well-Known Member

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    It sounds like "demand exhaustion". This is what makes it so hard to confidently purchase something at the moment because the market ticks so many boxes as being high risk but chances of growth in the short term seem very slim.
     
  17. Barny

    Barny Well-Known Member

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    Media hasn't even started the negativity compared to 2010 news articles, media went crazy back then predicting the end of australia on a daily basis. Which never happened and won't happen and life will still go on.
     
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  18. DrunkSailor

    DrunkSailor Well-Known Member

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    In a strange twist of irony, the designated doom and gloom nut for this downturn is Nathan Birch. I swear you can’t make this stuff up.
     
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  19. Barny

    Barny Well-Known Member

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    I reckon Nathan's lost the plot cause he's in serious finacail issues.
     
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  20. ollidrac nosaj

    ollidrac nosaj Well-Known Member

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    Sydney and Melbourne real values show larger declines looming - Smart Property Investment

    “After real dwelling values peaked in Sydney in December 2003 they fell by -18.4 per cent to December 2008 and didn’t eclipse their previous peak until June 2014,” Mr Kusher explained."

    "Mr Kusher predicts many years may pass before real dwelling values return to their previous peak, especially when the current conditions are considered, which include tightened credit accessibility, the possibility of higher mortgage rates and historically low rental returns"
     
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