Moody’s forecasts permanent high plateau for house prices

Gosh it’s amusing, from the geniuses at Moody’s:

» Australia’s regional housing markets remain divergent but are expected to cool from 2018 onwards. Detached housing values across the capital cities are forecast to increase 5.6% in 2017.

» Sydney’s strong local economy is boosting housing activity, but this will slow in 2017. Detached housing values are expected to increase around 7.2% in 2017, after a 10.9% gain in 2016. Apartment values are forecast to grow 7.5%, after a 10% increase in 2016.

» Slower growth in apartment values in Melbourne relative to detached houses suggests buyers are already pricing in expected supply. Detached housing values in Melbourne are forecast to grow 7% in 2017 after an 11.3% increase in 2016, and apartment values are forecast to grow 3.4%, after a 4.6% increase in 2016.

» Perth’s housing market is showing signs that the worst is behind, and value gains could be seen in 2017. We forecast a 2.8% gain in detached housing values for 2017, after a 4.1% decline in 2016.

» Valuations in Brisbane, Hobart and Adelaide are improving, helped partly by better employment conditions. We forecast 3.3% growth in detached housing values for Brisbane this year, a 9.2% growth in Hobart and a 0.9% increase in Adelaide.

Far be it for me to rain on this parade. But there is the small point that markets dependent upon capital gains for growth (and this is sure one those with a negative income carry of -2%) by definition either rise or fall. They do not go sideways unless something changes, such as it did in Sydney after 2003, when the bubble was back-filled by huge rental growth.

Then there is this of course:

It’s a new paradigm!

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Comments

  1. boomengineeringMEMBER

    Same conclusion the CBA executive told the real estate agent I was talking to this morning. Where are they coming from?

    • From the fact that the rest of Australia, including future generations, will be sold off and impoverished to keep this Sydney/Melbourne (Capital cities) horrible monster alive and well. Have no doubt of it. Anything else is political suicide – you now only have to win Sydney and Melbourne to govern and you sure as hell will not get elected with Sydney/Melbourne offside.
      Mind that any attempt to impinge on this monster will have terrible traumatic consequences.

      • Huh? Why try and win the seats with more people when you can win seats with less people? The votes of people in these areas aren’t worth as much. i.e. do a Trump

      • Seats with less people Evilsync? Do you know much about how our 150 seats are divided up?

  2. http://www.news.com.au/finance/superannuation/government-mulls-access-to-superannuation-for-first-home-buyers-in-housing-affordability-package/news-story/2b42eb726c91a461628746cfd89213e4

    According to The Australian, the government favours a model that would allow first-home buyers to divert superannuation contributions into a home savings account, which would need to be matched dollar-for-dollar by contributions from personal savings.

    Australian homeowners who are not encumbered by large housing debt as they enter retirement will have their pension or superannuation incomes go much further to meet their many other costs of living,” Mr Morrison said.

    This is the bit i like. he says future super will go further in retirement without a housing debt. But future super will be a lot less becasue super payments are diverted to this account. And it will encourage people to take out bigger loans so they will still have more debt when they retire.
    If this actually gets implemented expect it to be discontinued when labor wins next election and the savings account forced to be rolled into super.

    • Would this measure need senate support (i.e. legislation) to pass? If yes, it might not get through.

  3. http://www.news.com.au/finance/economy/australian-economy/treasurer-scott-morrison-commits-to-helping-young-aussies-trapped-int-eh-rental-market/news-story/d3031128ee8389033a1959aea2fdcfb6

    “It is a statement of the obvious that you can’t help first home buyers save for a deposit by implementing policies that increase their rent,” Mr Morrison said in a speech prepared for the Australian Housing and Urban Research Institute in Melbourne today.”

    It should have also been a statement of the obvious that you cant help first home buyers by implementing policies that force up home prices. And yet here we are.

  4. http://www.watoday.com.au/wa-news/was-royalties-for-regions-to-be-killed-off-20170410-gvhp2i.html
    The WA Royalties for Regions program that has given nearly $7 billion in funds to country areas since 2008 looks set to be killed off in its current form after Regional Development Minister Alannah MacTiernan criticised it for not creating jobs.

    7 billion dollars !!!! Wasted !!!
    this is the price paid by Colin butthead on behalf of the people of WA to allow the Libs to form government for the last 10 years or so. A massive rort and bribe to help the political thieving leaches continue to stick their filthy pig snouts into the tax payers troff.

    • Yeah it’s all wasted on those ignorant regional country morons. Spend it all in the cities where we can really appreciate the waste. Matter of fact let’s just finish it! Sell what little of the regions that remains in Aus hands to foreigners – then we don’t have to worry about it at all.
      We really do need to keep parasitising the regions to keep the cities prosperous and everyone in nthem comfortable.

      • Its 7 billion that has been frittered away with virtually nothing to show for it.
        Imagine if it had been spent on health services for the entire state City and regional areas, or jobs programs, or bringing solar farms and battery storage to remote communities or even just paying off state debt so that WA regional and city would not now be faced with another increase in power costs.

    • “Waste”. Why so surprised? It’s what governments do best.

      If they’re not buying votes from the Zombies they’re funnelling money to Cronies.

      Government is the biggest racket on earth.

  5. Ah you silly bubble head perma-bears.

    The guv’ment will pump up the demand side and the RBA will listen to these dudes here and lower teh rates!

    I agree prices won’t plateau – they’ll go higher.

  6. Wonder what the free to air TV stations will televise when the arse falls out of the market….The Biggest Loser?

  7. Cashing in super-annuation by a generation who will have no pension.

    I’m not kidding, Generation Y will have no pension!

    • Of course they will ….. you will be paying for it.

      Best reason for hiding wealth abroad.