For years the experts said Australia was different. Due to a so called shortage of houses, prices could only go up, new buyers would just borrow more and our record household debt levels – well it was not really an issue and we would rather not talk about that. When it became apparent the 20 percent p.a. growth rates started to slow to a snail’s pace, the experts said Australia’s housing bubble wouldn’t burst, rather just flatten out for 5 to 6 years.
Today, those experts are no where to be seen.
Despite Enzo’s auction clearance rates portraying Melbourne as the healthiest real estate market in the country, the Real Estate Institute of Victoria has reported that Melbourne’s median house price has fallen 6 percent in the three months to March. This is the biggest fall in prices since the GFC which prompted the Federal Government to prop up the ailing property market with the First Home Buyers Boost.
The Melbourne Herald Sun reported :
MELBOURNE’S property bubble is bursting, with $400 a day wiped off the average house price in the past three months.
After peaking at $601,000 late last year, the median price has fallen to $565,000 – down $36,000.
The 6 per cent slump is the biggest quarterly drop in more than two years and one of the biggest the Real Estate Insititute of Victoria has recorded since the height of the global financial crisis.
It has raised hopes for buyers desperately trying to break into the market and will create speculation over whether a crash is coming.
The weekend edition of the Australia Financial Review said :
Melbourne’s house prices have started to fall as the city’s property market nears tipping point brought on by a lack of affordability and the threat of further rate rises, analysts say.
This weekend will be a further test to the Melbourne property market with over 1000 properties up for auction.
ยป Melbourne home property prices plunge – The Herald Sun, 16th April 2011.
Nice summary. This is great news as far as I’m concerned.
Of course, the government has a secret weapon that no-one seems to be talking about – buying GFC-inducing RMBS with tax-payer money. I’ve created a GetUp campaign to increase awareness. Would be great if everyone got on board and voted:
http://suggest.getup.org.au/forums/60819-campaign-ideas/suggestions/1714827-stop-tax-payer-funding-of-the-housing-bubble?ref=title
The Herald Sun still gives it all it can muster on the spruiker front thought, doesn’t it?
“It has raised hopes for buyers desperately trying to break into the market”. Oh, those poor desperate buyers who might finally now “get in”.
When folks, say they have to “get in to the property market”, my refrain is “Get into what? The magic elevator to success and prosperity? The property market is no magic pudding!”. This will soon or later be clear to all. Some 80% or so of property “investors” are regular folks on regular incomes, not professional “investors” or lessors.
hehehehe….hehe.hehe…he….giggle giggle giggle. This is music to my ears. My children’s future suddenly looks brighter ! Maybe not mine though, hold on to your jobs people !
bob, I concur. I’m just trying to subdue my reaction cause in this new, wonderful world of Government instigated and lead, bailout and stimulus packages anything can happen, its’ stranger than fiction.
G-F-C ooi! ooi! ooi!
G-F-C, its’ dynamite
G-F-C, we could not fight
G-F-C, debt overload
G-F-C, Australia explode.
Ah the 70’s, for those of us that were there… We actually could afford to live comfortably then on one modest salary per household.
Just not buying a house becomes better financially than working.
Is it time to start shorting the banks?
SUNSHINE COAST – 5 Years ago headlines in local, said property rises $10,000 A MONTH and it did for 3 YEARS so these losses even if they went on for years would still leave propertys past result as one of the greatest investments ever.
Your right Shirley – that’s how big our bubble is!
If you look at the U.S., they are 6 years into declines and have still not reached the bottom.
I suspect we should see a decade of declines ahead of us, if not more. Just look at Japan.
I would also expect to see the fall get faster as all the negative gearing investors relise they are contibuting to the shortful of an asset that will be worth less in 5 years, and even less in 10.
shirly shirl shirl…Let’s reconvene in say…a decade, and the headlines will still be saying that houses are dropping $400 a day…”it wont happen overnight, but it will happen” hahaha
Shirley,
Property rises $10,000 per month for 3 years.
This headline, “…Real Estate falling $400 per day”.
Let us take a month as 30 days (accounting month).
Monthly Drop = 30 Days x 400 Dollars = $12,000 per month. So if these loses went for years, well we will see.
Funny how the debt remains intact as the underlying asset drops $400 a day. Game over punters
I smell more protests and civil unrest in Australia. Wealth destruction is no fun especially when our leaders force it apon us.
I feel sorry for the average property investor that believed the experts and government about home ownership.
But I don’t feel bad about the backlash coming to the government for what they and the banks have perpetrated over the last 20 years, through fractional reserve banking and fraudulent money creation.
Carma comes around eventually.
Welcome to GFC Australia style.
It is quite sad to see this happen, but it’s needs to get much worse before it gets better, then the next generation like my kids may have some hope of home ownership. The Aussie dollar is also killing any exporter outside of the minerals sector and if this continues, it will kill whats left of Australian manufacturing industry.
What kind of nation are we going to be? Looks like all we’ll have left are quarries..
Lets just hope the commodity bubble pops as this is the key to driving house prices rock bottom.
Look at this this way Shirley, you might like this number.
$400 per day, x 365 in a year = $146,000.
Keep taking those loss, I’ve got some iPhones and overseas holiday to purchase, and in 3 years time when that $146,000/yr losses amount to $438,000 off the price of a home, then I can afford it really cheap.
My situation = iPhone, overseas holiday and a really cheap house.
Baby Boomers situation = default on investment property, eatting dog food in retirement and bathingin kerosene.
Just deserts for the years of rorting Baby Boomers have placed on me.
Hey Aaron i LMFAO at your comment @good ol Shirl. Its comments and attitudes like hers that have brought our once civil society to its knees. Im cashed up .Ive been paying stuff all rent and im ready to buy Shirls place too. You treat houses like a stock or commodity and as quickly as they rise they will fall. By the way were still a single income family like my folks where and i actually know who my kids are.