RP Data describes a gloomy housing market

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Unconventional Economist
Latest posts by Unconventional Economist (see all)


  1. HMMm – I looked at that report last night. What struck me was that in the last quarter the losses were minimal at worst and in some cities they started to see some gains. Overall the capital cities rose by 0.3%. Page 4 in the report.


    It’s good to look at where we are at, but momentum should be examined as well.

    Anyway everyone can make up their own minds on that.


      • yes, that’s true.

        The 5 city aggregates were down for the month – Melbourne is falling as I would expect, but Sydney is falling more than I anticipated.

        • outsidetrader

          Sydney house prices have fallen 1.6% since the start of May – that’s quite a drop in less than a fortnight…

        • Also noticing more availablity on the rental market, the expenisve places just aren’t being taken.

      • Yes I did notice that. It will be interesting to see how the interest rate reduction affects buyers confidence.

        I have to be honest, I haven’t seen much change as yet, but it’s early days. Perhaps they were waiting to see how much was passed on, or perhaps they just don’t consider it to be enough to tempt them.

        They will tell us soon enough.

        • Perhaps the general public is starting to realise that prices across the board are too high and no amount of interest rate cuts will entice them…

          I can only speak from my experience, but interest rates didn’t even factor into my decision making process when purchasing a home (now sold).

          • thomickersMEMBER

            That is because you are smart :).

            My future homeloan will factor in 10% interest.

          • Well BB if you were a first time buyer you would be the only one ever who didn’t care about interest rates and the cost of your mortgage.

            Most FTB’s are very cautious, and that’s a good thing IMHO.

          • I would suggest the data and prudent, unvested risk analysis says otherwise.

            “very” cautious to you may be a FTB pressured to buy a property 25-50% overvalued with a 30 year mortgage (that requires sub 7% interest to service) and less than 25% deposit – to me thats irresponsible and the very definition of a gamed market…

          • Prince – that is exactly the sort of sweeping generalisation that should be avoided.

            Are you suggesting that everyone who has purchased property in recent years is a fool, isn’t that a little hypocritical?

            I never fail to be amazed at how “holier than thou” some people become, but I am surprised that you have recently joined those ranks, you were less judgemental in a time before.

            Bring back Nick I say….

          • No you’re the one suggesting something I haven’t said.

            I’m not passing judgement on the FHB cohorts – I’m saying they have pressured into higher and higher prices, through the makings of others whose interests of business rely upon an unsustainable situation.

            You seem to have changed in the way you’ve taken on almost rabid method of shaping and deflecting the conversation whenever hard analysis and data is placed before your eyes.

            That’s not a generalisation.

          • It’s not that I didn’t care about the cost Peter. It’s just that the decision about when and what to buy was not dictated by interest rates.

            After we decided we wanted to buy we went out house hunting and the right house at the right price is what dictated the purchase, not whether interest rates were 6% or 8%.

            An investor might care more about the rates as it will dictate their return, but I would suggest for ‘home’ buyers most would not be swayed by rates, but instead finding a house that suits their wants/needs for a price in their bracket.

            What you seem to imply in your posts above is that there are hordes of home buyers just sitting on the side line watching interest rates to jump into the market… I don’t think that is likely at all.

            And as for your suggestion that First Home Buyers are very cautious… in early 2009 the Fujitsu survey showed that over 50% of FHBs were leveraging up 90% LVR or greater to buy… I wouldn’t call that cautious. Perhaps they’ve changed over the last 2-3 years.

          • Same with me, I almost become FHB a few years back when KRudd provided bonus bribe but since prices in my targeted suburbs and range were shot-up irrationally…I just defer my buying decision. I don’t mind renting anyway compared to life-time debt slavery.

            The only factor I see is the home price, while interest rate is given in my conservative assessment of my payment capability anyway. Rational people know that you’re better off with less debt balance and high interest rate compared to more debt balance and low interest rate.

          • Thanks BB – you should have done OK then – at least I hope that you did. In some areas prices did rise quite a bit in the following year – but it’s only money.

          • We did pretty well with the house. In late 2008 we had it revalued and I used a LOC to start buying precious metals. And then we later sold it in late 2009, which was partly based on my expectation that prices had peaked and partly for a sea change.

            I don’t have a problem with property, it’s a pretty handy asset given banks readiness to lend against it (can’t do that with my physical Gold), but in my opinion there is little room for growth in most states and potential for a fair bit more downside.

            I don’t think interest rates will be enough to see property return to above inflation growth levels for some time.

          • Peter, It’s only money? It’s only being in debt to the banks as you watch your equity go backwards? It’s only paying most of your wages to the banks. It’s only watching the economy slowly tank as it has withdrawal from the cheap debt. It’s only large number of people around the world losing their homes and their jobs. It’s only not knowing where it is safest to keep money due to hyper impending inflation, hyper deflation or stagflation. It’s only living in the economic twilight zone for the next 5,10 or 20 years?

          • Funnily enough BB I don’t radically disagree with your point of view. However for whatever reason people will still keep buying houses, just as they did with gold and silver before the recent huge falls.

            They do the same with equities, but exactly who has the right to tell them they they can’t buy?

            People have the right to both succeed and fail in life, and I hope that the finger pointers never take that away.

          • That’s part of the rich tapestry of life oobles – no one can take risk away from any transaction, bus ride, or a walk in the park.

            It’s called reality – get used to it, it won’t go away.

          • Peter: “Funnily enough BB I don’t radically disagree with your point of view.”

            Unfortunately those of us with more moderate views (on either side of the argument) tend to get labelled as being a bull or bear and it’s expected your views are in line with the most extreme on either side.

            You are not the raging bull that many make you out to be, I am not the savage bear that some make me out to be.

            I just think there is a lot more downside risk than upside, but am not expecting a full blown crash.

            I agree that no one has the right to say they can’t do something, but I don’t see the “Don’t buy now” campaign as anything more forceful than the vested interests on the other side saying any time is a good time to buy (which is implied by suggesting it’s a ‘buyers market’)…

          • Peter, I don’t disagree about the rich tapestry, although the tapestry seems a little richer these days. I think it bodes badly that we are spending so much time trying to read the tea leaves of house prices, government intervention, and world wide debt. It feels more like a walk in a minefield than a walk in the park.

            Most of the population has just the biased information the media feed them, so I’m happy this place exists. But the more information you get here, the more mines I seem to see. 🙂

          • BB –

            Your second last point – I agree for Melbourne, Sydney and Canberra, but less so for the other capitals. The net of that is probably not far away from your position.

            Your last point – noted.

        • Anecdotally, I’m hearing that confidence has returned to the market in Perth. Not suprising given that “real” unemployment out west is 0% (by that I mean, anyone who wants to work, can find a job).

          I also see a return of FHBs at Melbourne auctions, bidding up prices with their free money from uncle Ted.

          If the drop in rates means Sydney holds, and Brisbane normalises, I expect property prices will stabilise (and we may even see modest gains) over the next three months.

          HOWEVER, if prices don’t stabilise in the next three months, it’s game over for property investors and anyone who bought property in the last 2-3 years on the eastern seaboard.

          • That’s an interesting view Greco. Why does everything hinge on the next three months?

          • The next three months are important because we’ve had massive credit stimulus (1% fall in official interest rates).

            Hence, if the market doesn’t stabilise in the next three months, it is reasonable to conclude that the propoerty market is unresponsive to credit stimulus (the only option available at this time) and unlikely to recover until direct stimulus returns (which is unlikely in the medium term given the Government’s Budget Surplus objective for the foreseeable future).

          • russellsmith55

            By ‘I also see a return of FHBs at Melbourne auctions’ do you mean right now, or you predict it happening soon?

          • Repossession Stats for W.A. (look for ‘Civil Property Possession Applications’) on the page if its’ not shown directly from this link.

            Increasing mortgagee repossessions in a State that has(?) better employment prospects than the other States. The figures are probably much worse as these are only extreme cases that has progressed to the WA Supreme Court.

            Too many factors both here and abroad to make any call really. I think (emphasis think) this picture nationally will not be a good one.

            Does anyone know where other data for all states can be found? Google ain’t coming through for me.

          • Despite and the doom and gloom, we have just went out and bought a house in Woodend, Vic, a nice little place on 5 acres (by the way do you know how hard it is to five 5 acres at a good price within 60 mins travel to Melbourne?) We sold our last house in late 2009 after having it for 11 years, we started up a business and now we only work 2 days a week.. the house is to be a home not an investment and we dont really care if it loses some money. It will be paid out in 10 years. In about 5 years we will knock down the old house and build a new house. Apart from the rates, there wont be any other bills to pay as its self sufficient and we will also put in a orchard and grow some veggies.

          • I personally wouldn’t rule out some pickup – the reduced volumes being sold actually help this substantially.

            I believe some investors and FHBs WILL come out of the woodwork and buy, and that this will at least stabilise prices.

            However, i remain bearish because I still think that their is just too much debt around, and so people have so much; add to that the general trend of disleveraging (which has shown signs of becoming deleveraging), and I find it hard to see that prices can’t come down, as people simply won’t/can’t keep pyaing what was/is being asked. I just can’t bring myself to think it’s sustainable.

            Add to that the whole structurally predicated notion of our economy and rising house prices (read, debt injections), and i think we’ll do well to get by with a slow melt.

            My 2c

        • Charles Ponzi

          Potential buyers will continue to lack confidence as it becomes apparent that we are heading toward a recession.

          • Yes, and then there is the confidence issue – I don’t think we’re in full-blown Denial yet (referring to the classic Bubble Psychology chart).

    • Might the Q1 momentum just be seasonal factors, since they have stopped seasonally adjusting the figures?

    • Peter F the momentum to which you refer is (or was) part of the housing ponzi con.

      Positive momentum is a factor of confidence and, if it has not already soon will be replaced by volitility.

      The above graphs suggest that perhaps 30% of households are on the edge of Negative Equity.

      As has been pointed out by yourself and others, in our non-recourse loan market people will do anything to hang on to their dream home.

      This vulnerable group will in time put themselves out of work as services transport and retailing are hit to top up equity. The result to initiate the positive feed back loop discussed earlier.

      • tonydd – sadly in my experience it is the cost of servicing total debt that causes problems, not a single home loan payment.

        I will make two points –

        1. Buyers set the price in markets including the housing market. It may be a buyer at the margin, but it is still a buyer and it is not the seller.

        2. If ever there was a curse put on the working class, it is revolving credit, and the easy access to multiples of lines of that credit. Moves are being made to correct that. It wasn’t all the lenders fault, but they did contribute through poor systems and too few checks.

        Just like a drug addict, a debtaholic will be happy to hide the full extent of his/her habit until it is too late, and they can be very deceptive.

        Happy to expand on that at a later date if requested.


        • Thankyou Peter F.

          I agree entirely with your comments above.

          In the equity bar chart above, to what extent have householders paid down their borrowings compared with the equity coming from capital growth.

          Therein lies the answer to the question; Do these mortgagees have the capicity to repay?

          I fear that many who scrambled to get the various home buyers grants have paid down precious little principle as they couldn’t save while renting and its been more expensive to buy than rent.

          What are your thoughts?

          • tonydd – I don’t normally work on Saturdays, but here I am.

            Honestly I don’t know what the percentage is, but there is no doubt that households are paying down debt, and any reduction in the interest rate allows them to expedite that process. They are also managing their finances better, getting rid of credit card debts, and other short term liabilities. Not all but the majority.

            Sorry to be a pedant, but a borrower with a mortgage is a mortgagor – the morgagee is the lender.

            You are clearly concerned about the first time buyers who entered the market in recent years. As a rule these buyers haven’t had any major problems. Their loan size is smaller than other cohorts, and they usually have two incomes. The group that initially experienced problems in this GFC were the investors, in particular the low doc investors.

            If you go to the Genworth website and look for the “Streets Ahead information booklet” you will find that FTB loans average about $288,000 and it will give you more info on arrears rates in certain cohorts. That may answer your questions.

            Refer to my earlier comments – I get calls from many people who have got themselves into trouble, but when they tell me that they have 6,7,8, 9, or 10 maxed out credit cards plus personal loans on top of their home loan, then I know it’s not just the home loan, but their own insatiable appetite for the good things in life that they just can’t afford. A simple refi and consolidation can’t help someone that far gone as a rule. You can help someone who has been a little bit dopey and learnt from their error (who hasn’t done that) but the ones who have thrown themselves over the cliff long ago are goners no matter what. They are the ones being exposed at the moment.

            Most FTB’s these day have quite good savings, but in many cases the state governments grab a large portion of that in stamp duty and force up the LVR – it isn’t true to assume that all FTB’s are idiots who will find themselves in trouble, but of course some will. Stamp duty varies between states, so that comment is only true for some states.

            It’s almost impossible to find a time in history when house prices remained perfectly static, so knowing when to buy can be very tricky regardless of the direction that the market appears to be heading in. The market can change very quickly either way, so keep an open mind and allow others to make the choices that they deem to be in their own best interests – they might be right and you might be wrong – we won’t know what prices will be until the future is in the past.

            Have a great weekend.

  2. Notice that the January volume of sales has been revised upward. The initial estimate (a 50% drop on the previous January) didn’t seem plausible by comparison with APM auction volumes and REIV overall volumes.

    • The more recent sales volumes often get revised up as more data comes in. But as the Rp Data weekly newsletter keeps showing the elevated property listing figures are not due to a large number of property coming onto the market, but because listings are staying on the market for a long time (in part due to lower sales volumes).

      My guess from previous market behaviour is that the recent RBA rate cut will do more to boost vendor price expectations that buyer confidence, at leats in the short term.

      • “My guess from previous market behaviour is that the recent RBA rate cut will do more to boost vendor price expectations that buyer confidence, at leats in the short term.”

        That sounds like a very reasonable hypothesis. I too like Peter have not seen any real evidence to support a bounce just yet. However it is still early days, another 50bps rate cut may very well change things still.

        • Tarric – I have a theory that as prices drop, buyers who have their finance arranged don’t change their price range, they upscale their expectations, which means that the median doesn’t alter as much as it perhaps should.

          Do you have a view on that?

          • Agree, especially when the buyer cannot affort what they wanted in the first place. the price drop just getting them closer to the their desired property. At least this will save them the future expense on trading up.

          • That sounds like a good theory Peter and in my opinion likely a correct one. Once someone has their heart set on spending $400k on a house or $50k on a car it will likely be a case of what can I get for my original budget even if they can get what they originally intended for far less than that.

            I base the following hypothetical example off of a group of my friends on mine in the 25-30 age bracket.

            If a young couple for example have already decided they can afford a $400k mortgage and they can now have the home they desired for say $350k it seems very likely that they may very well alter their expectations and decide that now a double garage or a pool is now a must have.

            It seems to me that the would also add to the issue of overleveraged borrowers in the event of a recession and/or substantial drop in property prices. Instead of buying what they can relatively easily afford they go right to the edge of what the bank tells them is possible.

          • Yes – agreed – a double garage, ensuite, and a granite top bench can be seductive.

            Some will scale back expenditure by $10,000 or so but in the grander scheme of things that is rather meaningless.

          • PB – When prices fall, buyers often wait. No one wants to be caught catching knives. Most FHB will wait, because cost of renting is far lower than cost of interest plus capital apperciation (lack off!).

            In fact most that i know have reduced their price expectations.

          • @Seekvalue
            We are one of the those waiting on the sideline for it to bottom out.
            We’ve also decided, if we are to upgrade soon, we will try to keep the loan size to the minimum, and sell our current property immediately.

          • I would agree with much of this theorising, but throw in the notion and qualifier of a distribution of types of buyers, and that, if house prices keep sliding and the “mob” start talking about it, then the fraction of those willing to get in anyway will reduce with time.

            I am simply invoking the “why buy now when tomorrow will be cheaper” mass psychology that really does happen if extended property price slides occur.

            My 345345 cents again 😉

          • for whats its worth I’m still hearing from randoms about how its a great time to buy atm (even if they admit its a bad time to sell). So i guess until this mentality changes for the majority of people on the street its unlikely we’re gonna see that minsky moment

      • I like the idea that Sydney is a beacon…if falls show there (shortage, water views etc) then the rest of the country will fold?

  3. On Chart 2, can it be shown somewhere that indicate when exactly the peak was at for each respective city? Just want to know this change in value in both nominal and real term.

  4. I am shocked at what passes for commentary on this thread. The bold new trend to lower prices is well established. Month to month figures will vary, but the current time is midnight, not dawn.

    It would take a major and determined push from government to reverse or arrest this trend – instant ZIRP or an incandescent First Home Vendor’s Boost. I see no sign of such stupidity.

    Those locked out of home ownership by high prices have turned away. Reengaging their attention is IMHO beyond even the skillful spinners in the politic-housing complex. This market is buggered.

    Don’t Buy Now!

    • It would take a major and determined push from government to reverse or arrest this trend – instant ZIRP or an incandescent First Home Vendor’s Boost. I see no sign of such stupidity.

      Those locked out of home ownership by high prices have turned away. Reengaging their attention is IMHO beyond even the skillful spinners in the politic-housing complex.

      I tend to agree with you and I like your effort and comments David. But, in this case it seems that you’re a bit over-confident IMHO.

      Based on experience, I would never under-estimate the limit of government’s stupidity, vanity and stubbornness in spending taxpayer’s fund wastefully. Similarly, it is hard to measure the limit of the politico-housing agents capability in churning-out spins, lies and statistics to fool society in general.

      • Agreed Deo. It is still possible that a significant (all out?) govt stick-save can alter the course of prices in the short term. There is an election coming up after all: if the rhetoric changes from “houses are unaffordable” to “OMG houses are crashing” then you cant rule anything out.

        I think its fair to expect a downward price trend in the near term, but the slope is very tricky still.

    • I agree David. It will take a multi-pronged approach to return borrowers to most markets and halt prices falling (need both lower rates and boosted handouts)… and even then there would be no guarantee that what worked in 2009 will work again this time around.

    • It would take a major and determined push from government to reverse or arrest this trend – instant ZIRP or an incandescent First Home Vendor’s Boost. I see no sign of such stupidity.

      +10 Yes, Treasury seems to have finally woken up that boosts will not help at all..

      Setting the right kind of example

      In Statement 4 of the budget papers – known to overexcited economic journalists as the ”Treasury Sermon” – Treasury boffins have chosen to extol the virtues of ”building resilience through national saving”.

      Higher household saving will help, in the longer term, to act as a shock absorber for the economy, reducing household’s exposure to any sudden fall in asset prices – read house prices. It is in the best interests of everyone that this should happen gradually.

      Because that buffer may soon be needed. House prices have turned, falling 5 per cent over the past year.

      The get-rich-quick trick is over.

      Households no longer feel rich.

      • “The get-rich-quick trick is over.

        Households no longer feel rich.”

        I think thats sums up the last 15 years up pretty well Mav.

        Households felt richer, they saw their home values go from strength to strength. They thought they could one day sell their house and live like a king but naturally it was not to be.

        With the droves of baby boomers retiring in the coming years especially those with hard hit super its hard to see that factor being canceled out in any meaningful fashion by first home owners or investors. It seems we are being set up to be hit hard by a wave of retirees cashing in their investment properties.

        It also seems to me that baby boomers with hard hit super may be part of the reason that more properties are hitting the market and staying there longer. They are likely unwilling to part with their property for anything less than what they percieve they need for a comfortable retirement.

        • Jumping jack flash

          When you buy a place and use it as an ATM you feel richer.

          If you buy a place and don’t do that, sure, you could feel richer all you want, but unless you sell up and downsize, get a better job, or a few more credit cards, how is “feeling richer” going to translate into actual increased spending?

          The so-called prosperous economy of the past decade was a con trick – simply debt on top of debt on top of more debt.

  5. One young property bull who had plans to leverage her portfolio into the stratosphere has now adopted a more cautious approach:

    “Now is the time to start paying down debt … the leverage investors once had through capital gains is no longer coming to fruition … ”


    That’s a slight change from the vision a few months ago:

    “In a nutshell, my plan over the next 10 years is to buy basically two properties every year,” she says.


    Good on her for reading the writing on the wall and changing tack.

    • Better late than never. I still have a few property speculator friends who are still looking to add more property and leverage. Bank said no, then looking for other bank(s) that have more lax standard. They are die-hard believers.

      • thomickersMEMBER

        My friends are in their early 20s and are keen looking at gearing into property. Its like its programmed in their DNA.

        • I’ve convinced most of my friends it’s a terrible idea.

          Work colleagues, on the other hand, cannot be convinced.

        • I think this is a significant generational point you make; by implication, the young Gen X-ers and the Gen Y-ers are, largely, hard-wired with the ideas around property investment – it started when they were young and still continues today.

          These are the ones, I believe (my age, being 31), that will cause a bounce, if it is going to happen. They have never really known much else.


          • endrortsonhousing

            ‘hard-wired with ideas about property investment’ is too kind, far too kind in my view.

            Just because your parents tell you to do something stupid doesn’t absolve you of stupidity if you do what they tell you to do! This is particularly the case if you have some kind of basic financial literacy.

    • I had an interesting back and forth with her on twitter:

      She: Happy I’m not with #ANZ, posting huge profits but advising it will be at least 2wks before “rate cut” will be passed on.

      Me: Happy I’m not with #ANY bank, avoiding 20 years of slavery to debt.

      She: hahaha touche!!

      • Jesus she really does get it. For someone who truly appeared to have an almost religious belief in property this is a real achievement.

    • It seems some of the photographs (on the Domain site) have been Photoshopped? The views from inside the house seem unreal. Is Photoshopping images standard practice from realtors now?

      • boyracerMEMBER

        “The views from inside the house seem unreal”

        You’re right they do seem unreal but if they were photoshopping it why would they not have got rid of the hideous furniture at the same time?

        There was an article a while back about this practice becoming more prevalent as it had become quite cheap to get furniture etc photoshopped in or out.

        Certainly a lot easier then shipping in a bunch of fancy furniture then getting it removed again. Not to mention storage issues.

      • Not sure, but for sure some of the views from the windows (looking outwards) are grossly inaccurate. The exposures are also all wrong. It’s not possible for the brightness inside to be exactly the same as the outside.
        (well unless its a glass house)

      • When I sold my flat last year, the photographer took photos with a slight fish-eye lens from very particular spots around the house to make the rooms look as big as possible. Then they use colour-enhancers to make the colours look as bright and cheery as possible, and as you say, emphasise views in the background.

    • I have monitored SYD North Shore in the last 5 years and I can vouch that there is never a shortage of this kind-of irrationality. The upper North Shore is a bit shaky now with new apartments in Wahroonga-Hornsby areas but the lower North Shore is just another league for property die-hard believers.

      But, someone up there said that everybody has a right to be “stupid” with their own money and life 😉

    • reusachtigeMEMBER

      Look up Strathfield, same thing. That’s lucky to be a 2.5% gross yield. Nuts!!

  6. This website has a full proof chart showing future projects of the housing market in Australia. You will notice on the left the main features of this chart which is a summary. On the right side they have used a graph, first the graph lines show a fast decline, but what is strange is the second group of graph lines which not only go down, but backward.


    • you’re right – that is odd. looks like it’s created a classic no-head and shoulders pattern.

  7. From page 19 (Brisbane Volumes)
    “Compared to volumes in February 2011, sales activity across the city is currently 8% higher”
    The statistic sounds great but seriously… how many people were looking to buy a house after half the city was under water 1 month earlier??
    Feb 2011 was probably 10% lower than the norm due to the number of contracts that fell over in Jan, so of course there will be an increase if Feb 2011 is used as a referance.

  8. ceteris paribus

    Except for those who bought very recently, the slow melt in prices seems to be just what the RBA ordered. An orderly retreat SO FAR for most of the capitals.

  9. Went to an auction 2 weeks ago near Concord, Sydney. No bids, only 1 person registered. Agent mentioned that they didn’t have to report it as passed in.

    On the other hand, others in same area have now sold post second auction in 4 months, but I don’t know price.

    FHB’s and upgraders all seem willing to wait for a desperate vendor. Heaven help highly geared owners if unemployment rises as prices are down.

    My prediction is a new home buyers grant or new home buyers stamp duty grant if unemployment in the building industry starts rising significantly.

    Banks must be getting nervous about land bankers, apartment developers and builders.

    Retirees are getting screwed by falling property prices, falling deposit rates and a flat share market also showing signs of rolling over. Owning a pre-CGT investment property is not much comfort if it is falling in value!

    Don’t forget AUD prices are falling even faster and further for OS investors due to falling AUD over last month.

    Also don’t forget that all those fall percentages YOY need another 2.5% added to them for falls in real terms.

    I’m still in the slow melt down camp, but still alert to/concerned about unemployment in the building industry being a catalyst for bad things.

    Posted from Port Neill, Eyre Peninsula, SA.

  10. Many comments revolve around a correction being forced by negative equity and stressed mortgage debt etc. The real problem in my opinion is at the other end of the spectrum. The chart which reveals that 42% of houses are mortgage free.

    On the face of it that looks safe but really the equity in these houses represents possibly two thirds or more of the wealth base of Australians.

    This is serious over investment and as the boomers realise they need more income in retirement they will be looking to sell down – but to who exactly ? The next segment in the gearing chart are still relatively long debt.

    The exit doors are going to get fairly full with debt stressed and those seeking cash extraction from an asset which generally costs a lot to maintain.

    Where are the future buyers for $1m plus houses?

    See attached it’s the same all over the world.


  11. Aristophrenia

    A great article providing some clear data on the housing trend in Australia, a line traversing the 135 Cartesian degree, but all we get is SPAM from Peter Fraser about how things are picking up – its pure spruke – I know it, you know it, MB knows it – having to scroll through pages of apoplectic claims from a known spruiker, and all the responses from people clarifying with good grace what the data and article are actually saying (which is pretty damned clear from the GREAT BIG LINES POINTING DOWN TO HELL) is getting fairly tedious to say the least.

    One has to search, and search and search for some honest comments, informing links and outside the box comments as the entire article and comments section is simply being hijacked – EVERY SINGLE TIME – it is getting so, so tedious.

  12. tsport100MEMBER

    Not sure the ‘stated’ average days on market or sales volume ties up with a DOUBLING of the long term average level of inventory???