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Jeez mate, housing values on the slide in the lucky country

Jeez mate, housing values on the slide in the lucky country

Housing values are continuing to decline in Australia, particularly in Sydney, Melbourne and Perth.

CoreLogic's Home Value Index for Australia declined 0.6% in July, which was the third straight month of declines.

It is now 1.6% lower than it was in April.

Unsurprisingly, the biggest decline was in Melbourne, where it was down 1.2% in July and down 3.2% for the three months to the end of July.

In Sydney it was -0.9% for the month and -2.1% for the three months ended July.

Perth was down 0.6% for the month and -2.2% for the three months ended July, while Brisbane was -0.4% for the month and -0.9% for the three months.

The top end of the market was the most badly affected.

"Higher value markets tend to be more reactive to changes in the economic environment, having led both the upswing and the downturn over previous cycles," CoreLogic Head of Research Tim Lawless said.

"The COVID related downturn has seen this trend playing out again, with upper quartile values down 2.9% across the [state] Capital Cities Index since the end of March, while lower quartile values have fallen by only 0.5%," he said.

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27 Comments

22
up

Good job we are diffrunt !

Interesting as to how closely correlated the fate of Sydney/Melbourne will be to that of Auckland.

Well if Jacinda can keep the coronavirus levels down as Labour has done (much more so then the rest of the world), we're more likely to weather the storm economically and may attract more oversea investment via the back door buying through Trust funds.

On the way up it lagged by around six months to what happened in Straya.

Well, according to many here about 10 months ago - Auckland is a world class city exactly like Sydney, and shares exactly the same characteristics that make Sydney such a spruikers' paradise.

Could Auckland become more expensive than Sydney? DFA Post from just over a year ago

https://m.youtube.com/watch?v=2-x083r42kE

There is a whiff of death about Australia - the multiple layers of government, high taxes, bureaucracy, unions and picking a fight with China are going to extract a heavy toll.

The NSW govt (largest employer in Australia) and Vic govt are both reliant on stamp duties from property sales as an income stream.

Lot's of massively overpaid deadweight in Australia, particularly in the public sector.

Because sales have collapsed under Covid, NSW are to end stamp duty and replace it with a land tax on your primary residence. Pretty sure that's grandfathered so you will only pay it should you buy once stamp duty is abolished. Looking at the Covid situation there, every state has it's own police dept, health office, legislature etc etc. The sheer level of duplication is extraordinary

If they do that it will form a mandate to do the same here. Offset one tax for a more regular and unavoidable land tax. Oh snap....pretty sure that is the the lead policy for one of NZ parties

Australia has a complex and inefficient tax system. Land taxing holiday homes just means people don't bother owning them and go on overseas holidays instead. They miss out on the construction business and all the ancillary services and demand just because they want to land tax. It's the reason coastal NSW is so sleepy and trapped in the 60's, it feels tired compared to Queenstown, Coro, BoI etc.

3 layers of government makes Straya one of the most bureaucratic countries ever. Also one of the most litigious places in the world after the US. National sport over there trying to get one up on the government though.

3 layers of government makes Straya one of the most bureaucratic countries ever. Also one of the most litigious places in the world after the US. National sport over there trying to get one up on the government though.

3 layers of government makes Straya one of the most bureaucratic countries ever. Also one of the most litigious places in the world after the US. National sport over there trying to get one up on the government though.

Like your comment in triplicate, no?

You missed the major one mate, the weather. Large parts of it will become uninhabitable in the next 20 years.

As Martin North says in Australia even the red tape has red tape

That's Australia, NZ (Auckland) will be fine. We are in a different planet for housing, trust me!

At least one respectable Kiwi knows when to enter and when to exit Aussie market ( even more than Aussies). Haha !!!

Respectable?

Some factors I think might be relevant:
1. Covid has put a dampener on open homes and auctions, so less opportunity for agents to deploy their boiler room sales tactics.
2. Unemployment figures, and anxiety on future job security are making ordinary people hold off on largest purchase of their lives.
3. Collapse of tourist numbers and international student numbers means that rental market is being flooded with properties. Tenants (many of whom have their own cashflow woes) are demanding lower rents. Landlords/agents are either forced to acquiesce, or sell.
4. Foreign investors are no more. Even if they have found workarounds through trusts, surely the volume of activity is still much lower than before. And furthermore, they would be more focused on what's going on at home, and protecting their own principal places of residence. Funds moving out of countries will be scrutinised like no other time in recent history by governments in record deficits.
5. All of the above *should* be making potential purchaser to think very hard on whether the current asking prices are in line with realistic net rental income (or savings on rent, for FHB's)

How many of these factors does Auckland/NZ share with Australia? 4 of 5. But I don't know. I'm told that we're diffrunt.

(I'm sure I've missed other factors)

Note that property prices increased in Hobart, Canberra, and Adelaide. Would be interesting to figure out why they rose but Sydney and Melbourne fell. An obvious factor is job security in Canberra, but I'm not sure about the other two.

As per AFR "In Canberra, house prices fell 4.4 per cent, while Hobart dropped by 1.5 per cent."

Adelaide, Canberra and Hobart prices all up over the June quarter on latest Corelogic stats. So house hunter is correct. Interestingly, all of these places are among those that have had no Covid community transmission over the period. All capitals other than Perth and Darwin are up over last 12 months.

As of 4th August that well know property bull Peter Zwister has recognised that property prices are likely to fall around 10%. Haven’t heard anything from the biggest bull of all - Christopher Joye aka Wolverine.

The situation in Australia is far worse than reported. Corelogic don’t explain how they arrive at their figures and there is a lot of discussion regarding their accuracy. SQM research apparently has more robust data. For those that have not seen Martin Norths Walk the World Youtube channel he has up to date data on mortgage and rental figures including stress levels and it does not paint a pretty picture. Expecting a bank bail out, big bank losses in general and property prices to fall between 15% and 30%. If this current wave of covid is not bought under control then he expects a bank bail in (goodbye customer deposits) and house prices to drop up to 45. https://youtu.be/QeRadr6c_U8

Sensationalism. Draws attention but not backed up by any data I have seen. Nobody is talking about bank bailouts. Also, deposits up to 250k per person, per bank, are govt guaranteed. Australia’s housing market does not all move in unison, it is multiple markets, not one. Same goes for NZ. I live in one of the areas mentioned above as increasing in value, and I can tell you, houses are selling promptly without discounts. Generalisation is not possible, as there are too many differences in workforces and populations. True effects on both the NZ and Au property markets of Covid (Whatever they are) will be seen in time, likely later this year and into next. This pandemic will end, all do, and with it, recovery.

Days to the General Election: 24
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