CoreLogic daily index paints sea of red

In all the years following the CoreLogic daily dwelling values index, I can’t remember ever seeing wall-to-wall falls across all major markets on a daily, quarterly and annual basis:

Certainly one to frame and put on display in the economic pool room.

Unconventional Economist

Leith van Onselen is Chief Economist at the MB Fund and MB Super. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.

Latest posts by Unconventional Economist (see all)

Comments

  1. I’ve been watching that data for 3 years, and this is a first in that time period. It’s been a long time coming, and will be celebrated with a reflective ale or three after I secure my perimeter this evening.

    Now we have the long discussion about whether the market will go up, down or stay the same.

    There’s a real tension between the headwinds and the unnatural acts at the moment. I see the headwinds outweighing the tailwinds for now, although who knows what new insanity the government agents of the FIRE sector can come up with to keep pumping the bubble.

    • reality is we are in a ponzy so prices can’t stay level. That is simply impossible. So prices can only go further up or crash down. The Gov is doing everything they can to pump them up and this is now a priority – savers watch out as I can see clear signs of desperation. If you listen to Scomo and every other Liberal, there is no talk of affordability but only talk of protecting the value of the house. All measures are to pump the price – rate cuts, first home owner allowance, APRA relaxing the rules on few fronts ( the unlimited IO rule is back to allow Banks to hide bad loans (my view). If people struggle to pay P+I they can now be moved to IO – happy to be proven wrong on this one).
      My question is where to put our savings in order to make them out of reach. I am not kidding I am serious.

      • HadronCollision

        why can’t prices effectively stabilise.
        Not all vendors are desperate to sell
        Plenty in our area (ex cap city) are steadfastly maintaining their price waiting for the right buyer, pulling the listing or dropping prices say 5% to sell
        (Some places are admittedly way to high – we looked at a place this weekend thta had offers at 625 recently which they knocked back – those buyers moved on and they will take sub 6, but in my opinion they would want to drop 100k off it.)

      • in a ponzy everyone (most) bought in order to flip the property in few years at tidy profit. Most knew they can’t service those mega loans but it was short stint and “sure bet” as prices only go up. Once prices start to go down, anyone pressed to sell will have to drop their price – especially if momentum buyers are gone and they are.
        Even the examples you are giving from people that are holding they still are dropping prices by 5%. In six months they drop another 5% and so on. Too many overleveraged who borrowed more than they can service.
        As economy slows down things will get even worse for obvious reasons – Now even people that bought to live in those houses will get smashed.

      • buy precious metals. silver is industrial, has inelastic supply and demand, approaching extinction and theres hardly any above ground left (unlike gold) – and if the price drops, the buying goes crazy and it becomes unavailable.

      • Prices in a ponzi can’t stabilise because so many buyers bought ONLY because prices are rising. If prices stop rising, all those buyers disappear. Even if those who already bought are all HODL (refusing to sell) it doesn’t matter. Because the volume of new buyers will be way down. And that means not enough demand even to soak up the normal amount of houses on the market. Ergo, prices fall.

  2. So, in light of this, is there any adjustment to forecasting about falls stopping later this year? Melbourne had two days of rises and is back to it. Even though the government is doing all they can to help stoke housing. Even though the clearance rates have gone up, is this a signal of vendors dropping their expectations, rather than people suddenly spending more? so less are passing in because vendors are capitulating?

    • Unfortunately the daily series (despite core logic’s best efforts) apparently still lags reality by several weeks. So you might see numbers improve for a bit shortly.

      • ah right. I am starting to see doughy eyed couples staring at for sale boards holding hands now….perhaps that is the leading indicator. I reckon they (myself included) were hoping that the election solidified the dropping market. i guess they (myself included) back to FOMO

      • I don’t think the corelogic data has caught up to the bounce currently occuring. Expect some solid green data to come especially for Melbourne based on my experiences recently. Whether it’s sustained is another question…

  3. DominicMEMBER

    We still have a bounce to look forward to – may be a few month’s worth before the falls resume.

    Likely US recession later this year plus stock bear market. Won’t be good for sentiment.

    • I hope he is loading up now and only wakes up when Sydney hits the 20% mark down. I’ll be sending him new t-shirt every month.

  4. kannigetMEMBER

    So would this be evidence that the recent uptick in clearances is a result of vendors meeting the market? if so expect more carnage to follow….

    • I doubt. I think there will be few positive weeks as there were few people with money waiting to pick the bottom. MSM is doing everything they can to present that this was the bottom and the preacher will be delivering miracle after miracle. After the second or third rate cut and first bad consecutive job numbers start to flow people will wake up.

  5. The down trend will continue.
    There a no green shoots out there.
    High rise settlement failures continue. Between 30-40% are failing at settlement post each new building’s completion.
    Developers cannot get pre-sales so have stopped (virtually) all new projects.
    The major banks are no where to be seen.
    NBFIs are flat out writing residual stock loans (for fail to settle stock).
    The developers will soon capitulate and start dumping residual stock as the cost to hold this runs at over 10% pa (= interest rates being charged by NBFIs).
    We are just getting warmed up folks.

  6. The post election euphoria is going to sour.

    The condemned man received a life sentence instead…

    • Meh…I doubt anything will shake off the change towards Liberals in the medium term. They are still maintaining their “better economic managers” title. When things go south people tnd to go conservative. I reckon if it pops they are even MORE likely to get in. It managed to shift from blaming Labor to “things will get worse under Labor”.

  7. It’s a start, but these are very small falls in the face of long term large gains. There is plenty of furniture to throw on this fire yet.

  8. HadronCollision

    Very interesting where we are as a soon to list buying into a different segment
    Our segment is strong (think lifestyle properties 5-15 acres) whereas what we’re buying into is coming right off.
    I told an agent of a place we looked at at the weekend we are 4-8 weeks off listing ours (with a 4 week auction campaign probably) and he said no worries, vendor can wait.

    Goodness.

  9. The crash in Australia’s property markets couldnt have come sooner, and is a long time coming, but I find this property doom-pron celebration to be quite odd. We’re celebrating the financial destruction of people here. Yep, it’s fun to watch those few speculators hurting and that Harry Triguboff bloke having a conniption, but have some civility towards those who have done nothing to deserve your scorn.

    The vast majority of pain is felt by the younger buyers who have limited choice in the housing market because, lets face it, the rental market is a bombsite too. There’s a generation of young people in WA/QLD that need the stability of owneroccupied housing, yet are now facing financial armageddon for having recently purchased. This market has/will destroy entire communities (with NSW/VIC to come), yet Harry Trig and co are largely immune to the suffering.

    Pull your heads in MB commenters.

    • BS, I’m 1 of those young FHBs who was outgunned at nearly every auction. By the same idiots who will ask for the Government to do something and save them first. I have 0 sympathy. If you looked at the numbers and studied the market you would know it was way over priced and if you over extended yourself just to get in, you kind of deserve what’s coming.

      They can always file bankruptcy and start again. It’s only fair.

      • yep. they can rot. I’ve had to avoid competing with idiots for a decade. I’m ready to get in the ring – still waiting patiently.. they can have a go at wearing the bad effects of this housing bubble and being stupid.

      • @ gavin
        Thats one way to look at it. Another is that you incorrectly read the market and held off buying while prices took off in recent years. You currently refuse to buy into the cheaper less desirable western suburbs and continue to hold the belief that the market is too over priced even though others (overwhelming majority of buyers, not the small percentage that are reported by north and the like) are still capable of buying and meeting the repayments. You look at retarded doom and gloom articles from the likes of north, adams et al and use that as the basis to confirm your views. Instead of adjusting your perspective (of which has been wrong for over a decade) & taking note of current developments (no more cgt/ng reform, rate cuts, upcoming fhb stimulus, continued high immigration) you will continue to blindly hope for a massive nominal price correction so you can buy your fancy house in the posh eastern suburbs. You yearn for the days when ppl could get a 700sqm 4×2 15mins from the cbd for 350k , ignorantly refusing to accept that those days ARE long gone. Meanwhile everyone else who got in at a cheaper price in prior years are over leveraged idiots, right?

      • @beef pie – There is always options outside of Sydney and Melbourne. I get it that the market is determined by what people are willing to pay, but I’m just not willing to slave / shackle myself to the levels of debt required to buy a decent home.

        I’d rather to continue to rent and have money left aside and ability to act on other opportunities that having a large mortgage would prevent me from doing.

        I trust Martin’s data as it’s based on data more so than anecdotes. It’s clear to me that house prices are determined by availability of credit more than any other factor. So I do think the loosening of credit is attempting to revive the bubble, but longer term head winds are coming, so I think that will put a dampener on credit availability in future.

      • fitzroyMEMBER

        +1 Gav. I look upon it on a tax cash flow basis. They have been ahead for a while and now they take some pain. I feel sorry for O/O, but not the investors. Anyone who bid against the Chinese kleptocrats could see what was going on and it had to end.

      • “There is always options outside of Sydney and Melbourne. I get it that the market is determined by what people are willing to pay, but I’m just not willing to slave / shackle myself to the levels of debt required to buy a decent home.

        I’d rather to continue to rent and have money left aside and ability to act on other opportunities that having a large mortgage would prevent me from doing..”

        What a load of sh!t.
        You’ve frequently boasted that you can buy outright, you’ve also stated that you’re only interested in the eastern suburbs – so it would seem you are not short of a penny and would NOT have to “slave/shackle” yourself to a large mortgage in order to buy a home. Therefore it would also follow that you are NOT locked out of the market, you CAN buy a ‘decent’ home but you choose not to because the location is not up to your standards. You’re like a snotty fat boy who refuses to eat simply because the meal presented to him is not to his taste, then has the audacity to complain there’s nothing to eat.

      • ^ is this the 2019 equivalent of those spruikers in 2017 whose entire sales pitch was “get some balls, shut your eyes, buy a house” ? I think so. The entire premise seems to be “the only thing you should ever buy is a house, if you don’t agree, you are in some way defective”. And if someone mentions data, just start shouting louder.

        I expect he is still in negative equity despite the last month’s mega intense 0.3% boom and has some angst to work out.

      • @LSWHCP I assume that was directed at Beef Pie. Not Arrow who aligns with our world view that ever increasing house prices is not a sign of a good society, but a broken 1.

        Anyway @Beef Pie, yes it’s true I could likely purchase many homes at today’s prices without a mortgage. Because I worked my arse off for the past 12 or so years and saved + invested in things other than property.

        If I was stuck paying interest on a mortgage I would not have managed to travel and live abroad in the same way and have many opportunities open up to me. I would have also been stuck in 1 location.

        I choose not to buy in many areas because I’m looking for a specific lifestyle, but also my experience in other housing busts is that the new estates get hit the hardest when things do turn. It’s the same reason I haven’t bought into apartments (opal and mascot ring any bells?).

        It’s got nothing to do with greed or being a fat kid. Rather I choose to invest my money where I see it offering the best returns. Housing in this country and Sydney / Melbourne in particular are not 1 of those places.

        In fact I’ve had far better returns on alternate investments like vintage cars. Something I could not indulge in if 50%+ of my income was going toward servicing a mortgage.

        I’m sure you could buy a few BTC right now if you wanted? But you may not agree with its current value. Or any asset for that matter.

        Right now people are paying $200k+ for R34 Skyline GTRs. I think it’s mad and speculative, but they are still selling. At some point I expect prices to revert and correct and when they do I might buy 1, but I may also be locked out forever. Same with housing, but like housing I have other options, other places / cities to buy in that don’t involve plowing every cent I have into 1 asset and don’t prevent me from exploring other options such as starting my own business and potentially failing without djsasterous consequences.

      • BrentonMEMBER

        Fellas,

        beef pie & LSWHCP (which is not LSWCHP) are both Maggot. You’re having a serious discussion with someone who doesn’t have 2 brain cells to rub together.

      • Stewie GriffinMEMBER

        Ah… thanks Brenton, so “Maggot” is an earlier iteration of Teerols aka Beef Pie’s handle.

        The former handle is a most appropriate choice for that grub.

      • @brenten
        Get back to cleaning toilets and playing with your Grindr buddies

        @ stewie
        You dirty old deviant!

    • Concur, this is socially corrosive. I just hope that it is not OO, especially FHB, buying in and speculating investors offloading.

    • KeK, it’s too early to be celebrating. But when the time comes, the merriment will be awesome. Fvck those ccnts, the lot of them. Mums and dads trying to get ahead. Police. Nurses. Fvck them all.

    • Even StevenMEMBER

      @ Keen

      It’s hard to feel sympathy when people do not educate themselves with a modicum of knowledge.

      It seems there are two types people you want me to direct my compassion to:
      Those who bought without any attempt to educate themselves which is beyond stupid, considering biggest financial decision of their lives; OR
      Those who bought in knowledge of the above, in which case they do not deserve sympathy.

    • People will pay a premium to escape the rat race…..until another ash Wednesday hits the ranges.

    • Yeah Macedon and Kyneton, Castlemaine etc.. no idea why people are paying so much out that way. I think it was bubble money exiting Melbourne for downsized / tree changers.

      Heck at 1 point I was looking at Bendigo to escape the madness. Art Deco houses were asking $450-$600k out that way.