Dear God this makes for some delusional reading. From QBE LMI’s Housing Outlook 2018–2021:
Despite undersupply in both the Sydney and Melbourne markets, these two cities offer some of the greatest downsides over the next three years. Investors have been a key feature of the strength of price growth in Sydney and Melbourne since 2012, accounting for over half of residential finance in their peak years. The curbs on investor lending reduce investors’ ability to bid up prices to compete with owner occupiers, who in turn are already facing challenging affordability after the recent strong growth. Marginal buyers in these more expensive markets may also be influenced by the out-of-cycle increase in lending rates in 2018. Hobart and Canberra are forecast to experience another year of solid price growth in 2018/19 before price growth begins to slow as rising construction and diminished affordability influences prices. In Adelaide, with conditions remaining relatively steady, the recent moderate price growth is forecast to continue. Prospects for price growth in the Brisbane, Perth, and Darwin residential markets in the short term remain weak, but by 2020/21 an upturn in prices is expected to emerge. The dwelling oversupply is likely to be substantially eroded, while improved affordability is anticipated to be a trigger for price growth as economic conditions strengthen around the turn of the decade.
Look at those pretty colours.
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David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
