We ran the latest live Q&A session last night. One highlight was our updated scenarios. With the trade wars in play, the election results, RBA comments and APRA’s latest, the relative weighting for the scenarios have changed. Cash rates have been reduced, and bank losses adjusted.
Of course we have yet to get soundings from our household surveys as to whether buying intentions are changing; that will take a few weeks. And more unnatural acts might shift the results too.
Too bearish. It’s Scenario 2 now.
More:
What they’re missing is that this is the thin end of the wedge. Both the RBA and APRA will keep cutting.
I don’t see any kind of boom. But prices will stabilise and grind higher until the next fiscal shock.
So yes, in the long term sense, it is dead cat bounce.
In 25 years they’ll be at least double and you’ll be amazed at how cheap prices were back in 2019. How do 1994 prices look today.
GavinMEMBER
You guys have much faith in the RBA/APRA etc.. to ride to the Rescue, if the local market worked in isolation I’d agree, but global headwinds are building and things look very uncertain to me. I think Martin’s predictions are more accurate at the moment. Time will tell.
Torchwood1979
I dunno, Chris Joye seems to have the same faith in the lunacy of RBA/APRA and the Coalition to stop the property market crashing and he’s been very right in his property market calls. It pains me to write that, but unlike many other analysts he has a good feel for how RBA/APRA and the government will respond to a falling market.
Desperate times in Melbourne’s outer north and west. Many vibrants seeking nomination ahead of looming settlements on untitled 220m2 blocks. Cant bear to loose their deposits, What were they thinking?
“Land for sale in tarneit. It’s getting tittle next week it’s in habitat no easement on lot lot is 435sqm it’s a corner block including side fence . It’s a urgent sale plz call or text if you interested thx”.
I hope I’m getting tittle next week! In my habitat to boot!
Arrow2MEMBER
Hopefully a lot lot!
HadronCollision
He’s just a tittle on the block (block)
Used to have a little, now I got not a jot,
I’m just a tittle on the block
GavinMEMBER
Lol you lot
robMEMBER
Love the old “i’m moving overseas” line…
User_SydMEMBER
Sydney property prices have fallen 15% from its June’17 peak ~ c2years. According to Marty it will fall another c10% in 2 years time – roughly 0.5% a month? Is that how i read it? Sounds reasonable.
That is an agonising wait for people like me who were expecting a rapid correction in say Jan next year when certain ‘tax excesses’ would have been scrapped.
LSWCHPMEMBER
Renters like me in Canberra are still seeing prices go up. Sigh. I want to own something that will keep the rain off my head before I retire, so I’ll probably be buying a place this time next year. Agonising isn’t the word.
Simon
I’ve been holding off since 2006… And here I still bloody am.
zentaoMEMBER
Mortgage broker scumbag coming to my house tomorrow …. i feel this is the best we are going to get so i may as well get prepared
BubbleyMEMBER
Queanbeyan is not that far away. Would dipping over the border work for you LS?
Robert
The unemployment feedback loop is close to hitting the fan, and we are hitting settlement crisis time too! Miracle man needs gulible buyers to kick the can, and people without two well paid job are not eligible. Debt saturation and declines in real incomes are not conducive to increased property prices. And thats before the trade war black swan event compounding everything.
Yes, I’m wondering why they go public. Looking for a bailout or something?
triageMEMBER
As was pointed out, is it surprising that this story went to air 2 days after the election rather than before hand. Scromo can now all of a sudden discover that there is a property crash happening in Melbourne and Sydney and start emergency remediation work.
Simon
Yes, a bailout because it affirms a potential ‘national emergency’ narrative.
Popcod
Thanks! Am fighting off a cold, needed a pick me up
Simon
Cook yourself a spicy as f-word curry, that always works for me when I’m sick.
Nugginator
Looks to me that these estates as well as the banks are clearly targeting immigrants. Praying on the dreams of betterment.
Bradley
Martin gets airtime for his alarming bearish calls. He won’t be budging from his bearish stance as long as that gets him airtime.
I agree that we are more likely to see scenario 2 play out given the announcements earlier this week by APRA and the RBA
Farang wants boom boom
Finally someone else that gets it!
North is just trying to make a name for himself via the property correction. There have been others before him- Lindsay David, Philip Soos, Keen, collyer etc
Jspitzer
The last paragraph makes no sense. It will bounce first then you will agree with Martin north? I’m amazed no other property market in the world has tried to stop the rot when it set in. LOL.
Even StevenMEMBER
Martin North is expecting a bad enough environment that a bank will need to be bailed out? Seriously? 😳 wrong, wrong, wrong.
I’ll eat my hat if that happens.
Simon
Confident because he has a hat made from taco shells.
BubbleyMEMBER
Seriously Steve? Did you miss the GFC?
The government immediately said it was guaranteeing all 4 big banks. Not just one. That’s what stopped a run on our banks then.
The gov would def bail them out, with no hesitation at all.
alterbrain
What I heard in that is some valuable inner city priced are already moving up a little while sectors with huge supply still on the way are probably heading down. That the poor quality of new builds and poor location means the HODL model won’t return well even with heavy population growth. Also that investors got a scare and don’t have IO automatically renewed. Yes there was the RC, but banks realised that if they can’t show good assessment methodology they can’t claw back the security if it goes to Court. So nomad loosening of the purse strings until law changed. Investor finance was.the price setting factor plus the absent China buyer. Overall I thought more balanced than the old “we’re roomed, all rooned” theme I’m used to.
AK
He’s been saying that on the channel but none of the data actually supports this. For example in Sydney its the inner ring of property that has seen the most price falls. In the outer belts (Central Coast, Blue Mountains, Camden, etc) price falls have been 5% or less since the peak. So much for the “donut effect” theory.
TLDR; Basic supply/demand curves. Areas with more elastic supply curves have less of a correlation to credit availability on the up and down side. There are some exceptions where demand is high and supply was lower (e.g. mortgage hills)
So the Chinee will be back?
Little chance of that.
Already seeing movement in the Darwin market… some stale properties are now under offer and only 5 business days post election.
This seems like the short term bullish AUD call you made just a couple of weeks ago. Delivered with such confidence too !!
The size of the Chinese stimulus was the reason for the AUD call, but markets faded the news. Might still be right but I hope not!
On the other hand I don’t get any sense housing markets are going to fade the APRA / RBA / Scomo put.
And, to be fair, HnH did withdraw that call promptly with a wrongly wrong post.
So you are saying that 3 years from now, Oz prices will be down a maximum of 20%?
I’m not saying anything. Marty North is.
In 25 years they’ll be at least double and you’ll be amazed at how cheap prices were back in 2019. How do 1994 prices look today.
You guys have much faith in the RBA/APRA etc.. to ride to the Rescue, if the local market worked in isolation I’d agree, but global headwinds are building and things look very uncertain to me. I think Martin’s predictions are more accurate at the moment. Time will tell.
I dunno, Chris Joye seems to have the same faith in the lunacy of RBA/APRA and the Coalition to stop the property market crashing and he’s been very right in his property market calls. It pains me to write that, but unlike many other analysts he has a good feel for how RBA/APRA and the government will respond to a falling market.
Desperate times in Melbourne’s outer north and west. Many vibrants seeking nomination ahead of looming settlements on untitled 220m2 blocks. Cant bear to loose their deposits, What were they thinking?
https://www.gumtree.com.au/s-land-for-sale/vic/urgent/k0c20031l3008844
“Land for sale in tarneit. It’s getting tittle next week it’s in habitat no easement on lot lot is 435sqm it’s a corner block including side fence . It’s a urgent sale plz call or text if you interested thx”.
I hope I’m getting tittle next week! In my habitat to boot!
Hopefully a lot lot!
He’s just a tittle on the block (block)
Used to have a little, now I got not a jot,
I’m just a tittle on the block
Lol you lot
Love the old “i’m moving overseas” line…
Sydney property prices have fallen 15% from its June’17 peak ~ c2years. According to Marty it will fall another c10% in 2 years time – roughly 0.5% a month? Is that how i read it? Sounds reasonable.
That is an agonising wait for people like me who were expecting a rapid correction in say Jan next year when certain ‘tax excesses’ would have been scrapped.
Renters like me in Canberra are still seeing prices go up. Sigh. I want to own something that will keep the rain off my head before I retire, so I’ll probably be buying a place this time next year. Agonising isn’t the word.
I’ve been holding off since 2006… And here I still bloody am.
Mortgage broker scumbag coming to my house tomorrow …. i feel this is the best we are going to get so i may as well get prepared
Queanbeyan is not that far away. Would dipping over the border work for you LS?
The unemployment feedback loop is close to hitting the fan, and we are hitting settlement crisis time too! Miracle man needs gulible buyers to kick the can, and people without two well paid job are not eligible. Debt saturation and declines in real incomes are not conducive to increased property prices. And thats before the trade war black swan event compounding everything.
Anyone see this?
https://mobile.twitter.com/7NewsMelbourne/status/1130386256729260038
Yes, I’m wondering why they go public. Looking for a bailout or something?
As was pointed out, is it surprising that this story went to air 2 days after the election rather than before hand. Scromo can now all of a sudden discover that there is a property crash happening in Melbourne and Sydney and start emergency remediation work.
Yes, a bailout because it affirms a potential ‘national emergency’ narrative.
Thanks! Am fighting off a cold, needed a pick me up
Cook yourself a spicy as f-word curry, that always works for me when I’m sick.
Looks to me that these estates as well as the banks are clearly targeting immigrants. Praying on the dreams of betterment.
Martin gets airtime for his alarming bearish calls. He won’t be budging from his bearish stance as long as that gets him airtime.
I agree that we are more likely to see scenario 2 play out given the announcements earlier this week by APRA and the RBA
Finally someone else that gets it!
North is just trying to make a name for himself via the property correction. There have been others before him- Lindsay David, Philip Soos, Keen, collyer etc
The last paragraph makes no sense. It will bounce first then you will agree with Martin north? I’m amazed no other property market in the world has tried to stop the rot when it set in. LOL.
Martin North is expecting a bad enough environment that a bank will need to be bailed out? Seriously? 😳 wrong, wrong, wrong.
I’ll eat my hat if that happens.
Confident because he has a hat made from taco shells.
Seriously Steve? Did you miss the GFC?
The government immediately said it was guaranteeing all 4 big banks. Not just one. That’s what stopped a run on our banks then.
The gov would def bail them out, with no hesitation at all.
What I heard in that is some valuable inner city priced are already moving up a little while sectors with huge supply still on the way are probably heading down. That the poor quality of new builds and poor location means the HODL model won’t return well even with heavy population growth. Also that investors got a scare and don’t have IO automatically renewed. Yes there was the RC, but banks realised that if they can’t show good assessment methodology they can’t claw back the security if it goes to Court. So nomad loosening of the purse strings until law changed. Investor finance was.the price setting factor plus the absent China buyer. Overall I thought more balanced than the old “we’re roomed, all rooned” theme I’m used to.
He’s been saying that on the channel but none of the data actually supports this. For example in Sydney its the inner ring of property that has seen the most price falls. In the outer belts (Central Coast, Blue Mountains, Camden, etc) price falls have been 5% or less since the peak. So much for the “donut effect” theory.
TLDR; Basic supply/demand curves. Areas with more elastic supply curves have less of a correlation to credit availability on the up and down side. There are some exceptions where demand is high and supply was lower (e.g. mortgage hills)