Investors flee Adelaide housing bubble.

October 9, 2010 admin Australian Economy, Australian Housing 14

The Adelaide Advertiser has today printed a two page spread on pages 10 and 11 tittled “Has the housing bubble burst?”. It reports “official” figures supplied exclusively to the paper showing house prices are starting to fall in Adelaide, down $10,000 or 2.4 percent to $400,000 in the September quarter. While the Advertiser didn’t publish its source, it is believed the figures have come from the Valuer General.

The bulk of the article then turns to a spring spruik fest, giving every excuse under the sun why prices are soft – federal election, two AFL grand finals, interest rates, the removal of the Federal Government’s First Home Buyers Grant. There is no mention of unsustainably high debt levels, or the fact that many banks have restricted lending.

But what is interesting is the number of open inspections coming up. According to the paper, there is 2159 open inspections this week, up 46 percent from the 1475 opens this time last year. This is the first time the number of opens have exceeded 2000 since September 2008 when there was 2019 listings.

The paper reports Brock Harcourt’s Chief Executive Greg Moulton saying “this was a sign of the boom time to come.”

But can you really conclude such a surge of listings is a sign of boom times, or is that just a bit of positive spruiking?

The last time opens exceeded 2000 was in September 2008, the exact same quarter that mortgage approvals hit bottom after the GFC. On the 14th of the following month (October 2008), and on the backdrop of a global “systemic meltdown” caused by irresponsible lending and spiraling household debt, the Rudd Government announced the First Home Owners Boost to save the housing market.

Will history repeat, or is it goodbye housing bubble for good?

» Has the housing bubble burst?, The Adelaide Advertiser, 9th October 2010.




14 Comments

  2. People getting on the selling band wagon while the going is still good. Sell now or lose out when the market drops.

  3. Its too late to sell. If you have not done so already get ready to lose $300k off your $800k ‘investment’

  4. FHB is correct the Market is now heading south and if you are thinking of selling you are going to get a shock when you work out how fast your investment property is droping in value. The ‘Average bloke’ in the street is not willing to except the truth yet but the hard lessons in debt are about to become real.

  7. Six months ago NO ONE in the mainstream media was mentioning the “bubble” word (except in the occasional srticle vehemently denying any Aussie housing Bubble), Now, it seems that all the MSM have “realised” that in fact we not only “might”, but in fact definitely “do have” a Housing Bubble. Fortunately for all you “Investors” out there, the view of the St George Bank Chief Economist is that prices will NOT fall, since “chronic shortage issues will place a floor under the market”

    Funny thing is, there seems to be an awful lot of stock on the market, and not an awful lot of interest, so the stock’s just not getting sold for the “expected” price. A bit strange that we’ve got a “housng shortage”, yet thousands of empty homes which seem to be in not that much demand (for the price . . .)

    Any bets as to how long before the words “oversupply” (and “crashing house prices”) become common in the MSM?? 2011 may well be a very interesting year for Aussie Property!

  9. AverageBloke dont get upset its only a little joke 🙂 but I am old enough to remember the last major house price crash in Australia and its all unfolding just the same as last time. People get sucked in to too much debt and in the end it all ends in tears.

    As for Melbourne it has hit the wall and the first of the falls to come are just starting to show up.
    As for Sydney, the next set of price data will show that the falls have started there as well.

    PS I hope it dont fall as much as I expect, but I fear its too late and the days of house price growth are toast!

  12. What worries me is when the bubble (partly created by excessive credit) does burst how will it effect bank deposits. Regulation of the financial sector is required urgently, or we will all be paying for a bailout while the individuals who caused the problem bail out with golden parachutes!

  13. It makes me so angry to read and see the latest headlines in the paper and TV regarding “property prices to increase by 20% over the next 3 years”.

    There are so many people and companies profiting from this ponzi scheme that I sometimes doubt whether it will ever crash.

  14. “There are so many people and companies profiting from this ponzi scheme that I sometimes doubt whether it will ever crash.”

    – FHB dreamer

    That’s a clever way to view it FHB dreamer, there are some powerful vested interests in the Australian property market, and they don’t want it to crash, its’ like one big dam that has started leaking, and everyone is poking a finger in a hole to stop the leak. Which you could say is a good thing to do if you consider an alternative like…, fancy funding a bailout package on your tax dollars?

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