Downgrading Housing Forecasts – Fast!

It is becoming a new sport, it seems – trying to assess the potential fall in property values across many markets here and around the world.

Indeed, Christopher Joye in the AFR writes: the great Aussie housing crash is accelerating, and it is being driven by the fastest and largest interest rate shock households have faced in modern history. Sydney house prices have now plunged almost 5 per cent since their peak only months ago according to CoreLogic. Home values in Melbourne are not far behind.

But let’s look at another market, because property price falls are being predicted around the western world, as Central Banks, appear at least, to be coordinating rate rise increases. We might want to pause to consider the group-think, which has been exhibited for the past two decades – cutting rates after the 2007 and 2008 crisis, cutting them again radically ahead of COVID, to say nothing of the quantitative easing which has flooded markets with cheap money, and rate control, plus handing ultra-cheap funds to banks.

I will leave you to judge how independent each central bank was and the degree of collusion, versus common reactions to the same economic out-turns, but the current mode of operation is driving highly inflated home prices which were driven by their bad policy – sharply down as they tighten. Some would suggest the High Priests of Finance, are not as powerful as they may like to appear.

So, let’s look at Canada’s housing market which has sharply shifted since the Bank of Canada began raising its benchmark interest rate from record lows in March. The central bank, seeking to rein in inflation that is running at its hottest in four decades, unveiled its largest one-time interest rate hike since 1998 last week. It raised the benchmark rate a full percentage point to 2.5% and promised more increases to come.

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Caveat Emptor! Note: this is NOT financial or property advice!!

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  1. Foreign investment and low interest rates drove the Vancouver market to where it is now, it's been an issue for Canadians since the GFC. Australia should adopt the pay upfront foreign tax on purchase that Canada enforced rather than the tax on sale of the property currently in place in Australia. Maybe that is affecting the Vancouver market, but let it be, local working people are over competing with people looking for a safe place to dump their money.

  2. Almost ALL (except Russia, few others) run by BIS globalists and COLLUDE to a common objective to keep you a serf/slave with their manipulations of their fiat (by decree) fake money that no one works for except from pressing the keyboard numeral keys and some printing now being phased out with their digital rubbish they can shut off if they don't like how high you jump when instructed.

  3. Had a reality check with my parents last night. They asked me why I don't just buy a house instead of paying $1200/mo for a one bedroom apartment, so l made them sit down and look up available homes in the region online. They were floored. I just think people don't really know how bad it is.

  4. Oh no. Now we have to wait till monkey pox stimulus cheques are distributed to prop up the market. Covid pandemic has done its job for last two years.

  5. Some say the Australian property market is in a bubble. If that is the case and the bubble pops then is it correct prices fall below the long term trend?

  6. Thank you for your reasoned video.
    No mention of the future effect on Australia's economy & housing from the crash of our major trading partner, China. Iron ore export price is halving. China may soon have finance difficulties to buy Australia's coal and gas. These problems may lead to a weakening $AUD, resulting in inflating import prices of cars, tv, mobile phones etc. Interesting times.

  7. All western countries don't produce much.

    Their economies running mostly of housing.

    With de globalisation, de dollarisation, multipolar world

    Western countries economies will be in trouble for years to come

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