No Housing Bubble!!!?

There may well be some short term supply issues (though I'm pretty sure they are heavily overstated by those with vested interests) nonetheless the above statement makes some assumptions that probably won't hold true if there are tough times ahead (which I'm obviously predicting there to be).

Firstly immigration; in aggregate, if unemployment is rising it's unlikely the government will push for higher levels of immigration like it has been of late given that immigration will only exacerbate the unemployment problem and the welfare burden on the system.

Secondly, the notion that supply shortages increase prices would normally hold true but in a financial crisis were interest rates go up and credit tightens the ability to demand is not determined by those that need a house rather is determined by those who the banks will lend to, given that the vast majority of Australian property is paid for with cash but is bought on finance.

Now for most it is hard to envisaged Australian banks going back to requiring 20% deposits and charging double figure interest rates, but IF the world lapses into another financial crisis (this time spurred by sovereign defaults) then this is the likely outcome, which will send foreclosure rates through the roof, creating a situation of over supply coupled with constrained demand.

So whilst I agree on a short term purely Australian focus view of the market right now things look good, but I think once you look past Australia the reality is much bleaker, and we as a nation are definitely not decoupled from anything or anyone, and therefore have no immunity to international problems!

Yep... and that's what the figures are showing too:

I assure you the same effect was taking place here in Australia, it's just that our housing deflation wasn't sustained given that the world started to find itself some irrational optimism to focus on just as our buffers (higher interest rates, economic activity and government spending) were starting to fade and we started to see some price falls.

Though given this, it leaves our property sector still highly inflated (without the buffers we once had) and exposed to much bigger falls in the future relative to other countries because we didn't see much consolidation in our property prices. Oh and for the record, I think there may also be some further property price falls in even the hardest hit economies that have already had massive consolidation.

The crisis really hasn't hit Europe THAT badly yet - they are starting to see the cracks.

With Greece (which of course is just the tip of the iceberg) there are a lot of people sweating, especially the big developed banks of western Europe because if eastern Europe defaults it will take a lot of western Europe with it given that eastern Europe got it's loans from the west (thus Germany and France running to Greece's aid rather than just kicking them out of the EU).

I don't think the Greece issue is as much to do with a media beat up as it is a change market opinion probably coupled with an organised speculative attack, which has forced the hand of governments.

This leads to forced policy change, bailouts or default. Two of these choices are very bad for markets and solve nothing, and the third is very difficult to implement without a strong government with both political and public will.

The environment and opinions have changed, but reality of high debt loads and budget deficits hasn't and as a result financial reality has come home to roost. "Assistance" is no longer given without justification or prospect for a ROI.

As I mentioned above I think one of the key drivers of the Greek "assistance" program to day has been western fears of contagion given their Bank's exposure to the problem, but of course bailouts don't solve problems, they are just a transfer of liability from one entity to another.

 

Ah yes. The great 2010 housing crash of Australia.

Was looking up investing in New Caledonia and came across this thread.

How funny.

Wonder how OP is going freaking out prices would crash in 2010.

 

Quite the bump....

*Checks investments since 2010*

 

Would have missed out on 10 years of continuous growth. Maybe doubled in many places? Sigh...

 

The property markets did look scary, back around the GFC.......
And before that in the early 90s.
And the early noughties.
And in 2018.
And during covid.
And now.
Do we feel lucky again?

 

How did this thread make it onto PropertyChat, I thought the switchover from Somersoft was back in 2015?

 

Wish I bought in Sydney in 2010

 

Love the old comments. People are still making the same points. Except price has more than doubled.

 

Thanks to bring this up, it is interesting to read the old long long posts. Same sentiment now, but 2010 was the year I went hard with properties, pushing through 2011 flood and here I am.

@sash may want to look at this thread as he has been through this the same way?

 

I did too....I am not negative about property but at the moment...it is on the nose.

I don't have 10-20 years to play with...I need returns now.

 

Look like they are more academical over there with lot of theory to back up points.
Here is mostly, my friends said or I heard from a lot, but if one pushed too hard, a photo of a new build would be posted and conquered all argurments