Don’t say I didn’t warn you, from Michael Bleby, card carrying property fluffer at the AFR:
Unlike previous cycles, housing price growth will continue to slow even as interest rates stay at record lows, say economists who expect a moderation next year.
Tighter lending standards, increasing supply and the weakened appetite of foreign purchasers will limit price growth to between zero and 5 per cent next year, said Paul Bloxham, HSBC’s chief economist for Australia and New Zealand.
“If you look at previous cycles of house prices in Australia, typically the thing that ends the house price boom is higher interest rates,” said Mr Bloxham, a former Reserve Bank of Australia economist. “What we’re arguing is there are enough other factors this time around to mean you’re seeing house price growth slow and it will continue to slow despite the fact that interest rates are expected to remain low.”
…AMP Capital’s chief economist Shane Oliver, who expects average national housing price growth next calendar year of “around 3 or 4 per cent,” took a similar view.
“We’re going to see the first cyclical downturn, at least in recent history, that will be unrelated to higher interest rates,” he said. “It’ll be a function of exhaustion, poor affordability, tighter lending and, increasingly, supply. Those things will culminate in 2018 and ultimately be made worse when the RBA starts to raise interest rates.”
…Next year will see a convergence between the country’s distinct regional housing markets, as the declines moderate in Perth and Darwin and the gains slow in Sydney and Melbourne, Mr Oliver said.
And on it goes. Gone are the one-eyed property industry insiders, the cherry-picked growth data, the particular focus on hot suburbs and auctions. In its place are boring economists and the great flattening out.
This has nothing whatsoever to do with anything other than a commercial decision to campaign for flattening prices because the great fluffing of prices has killed Domain’s transaction volumes and its share price:
It needs transaction volumes to rebound so it also needs prices to stop rising or the narrowing of the market will get worse. They can’t have falling prices either, which are also bad for volumes. So, we’re going to see the push for the ‘great leveling out’ of prices. If they can’t pull it off then recent share price performances are going to get worse:
These shifts in Flaccidfax editorial are clear evidence of the Propertocracy at large. Australia has never before been in the grip of such a potently corrupt social and economic engineering engine. The MSM has for a long time pimped its editorial to piggy-back advertisers. The Murdoch Press has always sought to press his agendas to business advantage. But the phenomenon of one half of the media duopoly mobilising its full breadth and power to manipulate a single asset class to sustain its only remaining profit centre is a new development of macroeconomic significance.
