南京夜网,南京桑拿网,南京夜网楼凤

Powered by Piaoyigirl!

Why it’s too early to call this a property crash

Prices have fallen in Sydney after the biggest real estate boom in recent memory, with no shortage of people likely to say this represents the end of surging house prices.
Nanjing Night Net

Sydney’s house prices fell 1.9 per cent over the September quarter – or about $23,000, Domain Group data shows, leaving home owners’ main assets worth sitting below the peak of June’s property market.

When put on a graph, this can look decidedly unsettling for anyone with a mortgage.

Any concerns about this slide in prices being the start of many to come is understandable – discussion of a property bubble has been regular and high-pitched in the last five years.

And if there was such a thing as a “checklist” for spotting a downturn, we would tick a lot of the boxes already.

The banking regulator, the Australian Prudential and Regulation Authority, has continued cracking down on “risky” lending – including interest only loans.

Auction clearance rates are declining, residential construction is slowing, rent price growth is lacklustre, Sydneysiders are selling up and moving interstate, and another wave of big-name brands has tipped price falls or warned about over-indebtedness.

These are all classic signs of a market in slowdown.

But for those who have been listening closely for the last five years, this sounds a lot like a song that has already been sung.

Just two years ago – in the December quarter of 2015 -we saw prices fall a record 3.1 per cent and there was a near-unanimous belief house prices had reached its ceiling.

The market had other plans. House prices have increased another $100,000 since those price falls were publicised and the Sydney market broke new price records.

Even apartments, which have been springing up in Sydney at lightning pace, declined 2.8 per cent and then grew again over this same time period.

???

Despite this, it’s understandable pundits were anticipating the 2015 decline was the harbinger of a more significant downturn. Other signals seemed to point that way then too.

APRA had been trying to target investor loans and auction clearance rates had dipped below 60 per cent.

And respected companies, such as UBS and Barclays, had aired concerns that Sydney house prices were “overvalued” and would face a period of stagnation.

What this proves is that nothing is straightforward for the harbour city’s real estate market and there are many unknowns.

Among them is the way the Reserve Bank will act. In 2016, after declining house prices in Sydney, the RBA cut rates in May and then again in August after 10 months on hold.

Now, rates have been steady at 1.5 per cent for 13 months – and recent surveys of economists show most are anticipating the next move to be up, rather than down.

And there’s a simple question of how much more people are willing to pay, how much more mortgage debt they’re willing to take on, for a roof over their head or for an investment property.

These are not easy predictions to make – our most esteemed economists rarely agree on how the market will perform even with the same information available to them.

What we can say with more certainty is that one quarter of price declines is not enough evidence for a housing market bust, but it’s definitely time to pay attention.

Until there’s evidence in future quarterly data that this is a sustained downturn, and not a temporary pause like that seen in 2015, it’s prudent to be hesitant.

This story Administrator ready to work first appeared on Nanjing Night Net.

Comments are currently closed.