Hamish Hodder
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Is the Australian housing market about to collapse? This week, September house price data for Melbourne, Sydney and the rest of Australia showed property prices fall as the real estate market continues to struggle on the back of high inflation and interest rate hikes from the RBA.
In this video I explore the key elements of the Australian property market including what is driving average home prices down and a new analysis that suggests property prices could fall significantly if the official cash rate continues to rise.
Sources:
▶︎ https://www.news.com.au/finance/real-estate/buying/worst-case-scenario-fears-house-prices-could-plunge-by-435-per-cent/news-story/af75a630f4e99db793e0abd9256d849c
▶︎ https://www.cnbc.com/2022/09/29/australias-house-prices-fall-interest-rates-rise-but-analysts-say-no-crash-yet.html
▶︎https://en.wikipedia.org/wiki/Housing_in_Victoria,_Australia#Private_housing
▶︎ https://mozo.com.au/home-loan-statistics
▶︎ https://www.smh.com.au/politics/federal/negative-gearing-changes-will-affect-us-all-mostly-for-the-better-20190208-p50wjn.html︎
▶︎ https://propertyupdate.com.au/the-latest-median-property-prices-in-australias-major-cities/
▶︎ https://www.aussie.com.au/content/dam/aussie/documents/home-loans/aussie_25_years_report.pdf
▶︎ https://www.rba.gov.au/chart-pack/pdf/chart-pack.pdf?v=2022-10-03-11-17-35
▶︎ https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/consumer-price-index-australia/mar-2022
▶︎ https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/consumer-price-index-australia/jun-2022
▶︎ https://www.abc.net.au/news/2022-10-03/property-prices-corelogic-rents-september-2022/101495078
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Disclaimer:
The information in this video is general information only and should not be taken as constituting professional advice from Hamish Hodder.
Hamish Hodder is not a financial adviser. You should consider seeking independent legal, financial, taxation or other advice to check how the information relates to your unique circumstances.
Hamish Hodder is not liable for any loss caused, whether due to negligence or otherwise arising from the use of, or reliance on, the information provided directly or indirectly, by use of this video.
Stop lies housing in good shape RBA is working for black rock who own most of Australian banks it is corruption
Nope. Too many vested interests in the Australian housing market.
No there are many postcodes that hold there value. Position, position, position . God Bless
It is better to invest now. You will never be younger than you are today and there will never be a perfect time to invest. Due to compounding, which Einstein called the 8th wonder of the world, you can get rich slowly from investing if you do it from a young enough age.
There's a no brainer with all of the recent interest rate hikes
problem is we will soon open the borders to more immigration, those with money will be accepted and professionally skilled workers, get 100,000-200,000 extra year and houses will not drop that much. Ive been in the housing market since 1980's and every year we have the collapse happening. It would take a 1890's or 1930's depression for even a 20-30% drop. Businesses would have to collapse, banks go into holding liquid cash limits, similar to Greece. But then people would have to want to or forced to sell to cover other debts. There are so many factors and at this moment you may be waiting a while, not saying a 5-10% correction is not possible. Where we live there are builders lining up to buy houses to knock down at current prices.
Here comes the Irish crash in Australia woo
Government intervention will prevent property prices heading too far south. Also wouldn’t be surprised to see longer duration mortgages introduced – these would allow people to borrow more which would increase property prices.
Buy low aussie
Australian prices won't budge until unemployment rises. For houses to fall 30%, one third of Australians have to be on streets asking for dole. They will RISE.
If it crashes, I'll be buying another one. For sure… let's hope it comes down a bit.
Not enjoying therefore not subscribing
Really well researched and informative video, much appreciated & subscribed.
A number of these analysts are just calculating falls based on reduced borrowing capacity. There are so many other factors that will reduce the impact: increasing rental yields drawing investors back in, low supply of new houses (delayed further by high building cost inflation), increasing migration, government policies for first home owners, etc. I'd be curious to know the modelling used.
Soo, buy bitcoin.
If inflation persist any drop will be temporary. Property prices go up in inflationary environments. Just look at property prices in the US and the UK in the 70s!
Salaries are going up in terms of currency (even if they are lower in absolute terms) to keep up withinflation.
Let's say inflation is 12% for 10 years and your salary goes up 10% every year. After 10 years your salary will go up from let's say £50,000 to £130,000. So an average UK property of £300k will go from being 6 times your salary to being 2.3 times. Obviously property prices will go up!
Great video;thanks Hamish
If you have any flat renovated or new to sell at 150k A$ let me know. I'm buying cash.
Investing in crypto now should be in every wise individuals Iist, in some months time you'll be ecstatic with the decision you made today.
National rental vacancy rates below 1% – lowest ever despite hiking rents left & right
Development approvals fall to lowest ever – no upcoming supply despite the shortage
Builders going under + Building materials price remains inflated
Keep waiting for your 43% crash. You will pay more for the same house/unit next year.
According my analysis I would say sydney is an unaffordable market so it will see 10-15 percent drop in the next 15 months and Melbourne be like around 8-12 percent in next 15 months from now then in 2024 market will stabilise and go even with less uncertainty but in short term rents will keep rising due to inflation and supply of new built homes but they will again see a stagflation after 6 months and again drop
Wishful thinking
The clearance rates are already in their way back up at the start of spring. 500,000 students waiting to come into Australia and we need plenty of skilled workers
Buy Property People
But the market crashing is only a good thing right?
Not in the only areas worth living in in Sydney (inner city) as soon as they drop just 10% there are many ready to swoop.
I was looking in 2020-21
2020 – got a bit cheaper but nothing for sale
2021 – prices boomed so heaps for sale
In inner city Sydney owners just don't have to sell, they can just ride it out
Being of age and how to manage the sequence of returns in those early periods is what seems quite scary in the current market. The market is never a loser in a twenty year cycle, but the 2000s decade scenario scares me and could really disrupt my retirement. When you are no longer accumulating but withdrawing its hard to be anything but cautious.
About friggin time. This was long overdue
I would argue the energy market was already being ripped to shreds long before the conflict. Take a look at the ridiculous policy moves to go "green." Germany was arrogant enough to shutdown their nuclear plants. Then the US's policy banning fracking on fed land. The Russo-Ukraine conflict was a CATALYST, nothing more
It’s not just the interest rates, food and bills are also rising, making it harder to make ends meet and sadly many will end up losing their homes & lose everything.
These predictions are useless as they never get it right , it's impossible let's face it
Don't worry. Helicopter money on its way
Australian house price is so expensive comparing to American’s. It’s one of most inflated market in the world. Australia is number 1 indebted country in the world (private debts).
This is all cyclical. What we are seeing is a historical trend that has always influenced the property market. Don't worry people by 2024 things will stabilize.
The sky is falling! We know.
When property drops to 70k for a 3 bedroom house on 650 block. I'll be buying.
summary: no one knows what will happen. I just saved your viewers 12 minutes of their life.
What a click bait video. The first 10 minutes is basically useless. More of this and it's time to unsub…
I think your pimple will collapse first.
Research; or Clickbait??? 😂
Champagne lifestyles on beer budgets for the last few decades and here we are. Living on borrowed money doesn't look so good now.
It’ll collapse more if China goes to war with Taiwan, the Chinese that come here to take full advantage of the housing market are lucky because we can’t go to their country and do the same
Watching Adelaide prices sky-rocket while there has been no job or wage growth blows me away. The fact that people believe prices can continue to go up is even more comical. Even had a financial advisor tell me Adelaide can only go up, because it's catching up with the rest of Australia… and I pointed out that if that were true, wages would also be going up in line with the rest of Australia 😂