From Flufferfax:
The managing director of Australia’s biggest brick supplier says real estate prices in Sydney are close to their peak in this cycle, and there’s not much more upside.
But equally, Mr Partridge said there wouldn’t be any risk of a major drop in real estate prices, and the Sydney residential market was repeating a cycle which had occurred over the past 40 to 50 years.
“I don’t think there’s any risk of a fall,” he said. “People will just hang and wait for the next cycle,” he said. Mr Partridge also said that affordability was less of an issue in Melbourne, even though prices had risen sharply there too.
“There’s no affordability issue in Victoria,” he said. This was because buyers had a better choice of properties in outer suburbs because of better planning policies over the past decades.
Of course prices are going to fall. The only question is how far? Will it be a rerun of previous little corrections in the 5-10% range or more?
My bet is more. The next shock leaves Australia with no more rate cuts, stunted fiscal policy and a twin deficit adjustment that will hit the labour market harder than the past few cycles.
