Everything you ever wanted to know about Australian property

In one city-by-city document. Courtesy of Westpac:

The pick-up foreshadowed in our last report is now coming through clearly with recent months showing more convincing evidence that Australia’s housing market is into a self-sustaining recovery. Prices have lifted and are set to fi nish up slightly for the 2019 calendar year. Turnover has been slower to turn but is starting to show a clearer pick up as well.

Our November Housing Pulse shows buyer sentiment continuing to improve albeit with the annual pace of gains slowing marginally.

The Westpac Housing Consumer Sentiment Index* remains near fi ve year highs – readings consistent with a pick up in turnover carrying through year end and into the fi rst half of 2020. The swing that became apparent mid year continues to be led by a strong resurgence in NSW and Vic but with other states also showing a clear pick up. Auction markets, fi nance activity, prices and listings now all confi rm the turn.

Conditions continue to vary markedly by state. NSW is showing a strong, broad based price rebound that is already starting to hint at renewed aff ordability issues. Vic’s recovery has good momentum but is more uneven across segments. Qld missed out on most of the recent price cycle but is starting to show signs of perking up. SA is seeing a gentle fi rming but WA is still struggling to pull out of its multi-year price correction.

Our main special topic this month is a look at the year in review and the year ahead including point price forecasts for the fi ve main capital city markets (see p6). Momentum is set to continue into 2020 but the upswing is forecast to move through a transition as aff ordability constraints re-emerge in Sydney and Melbourne and population fl ows start to favour other markets, Brisbane in particular.

We also include our regular prudential policy update which suggests this will take a back seat to other policy issues in 2020.

I would not describe it that way. It loks like a low volume, low mortgage, low listings, weak property market rebound uniquely vulnerable to reversal.

The full report is excellent.

Houses and Holes

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.

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Comments

    • It isn’t just the millennials. Not everyone had a chance to buy a house 30 years ago. Now those of us in our 50s who couldn’t buy back then facing constant ageism in the workforce rejection after rejection and we will never get a housing loan from a bank at our age.

      • Iron HorseMEMBER

        Interesting. I have a mid 50’s friend who is highly qualified and has just missed out on two jobs he is eminently suited to. I realise prospective employers may see him as a 4 to 5 year prospect, however surely younger guns would probably also have a similar timeline before they moved on to greener pastures??

      • > and we will never get a housing loan from a bank at our age.

        Banks will lend to over 50’s as long as you have an exit strategy in place. Our broker had no problem securing mortgage approvals for both OO and IP’s

        • desmodromicMEMBER

          I’m 61 and have just borrowed $600,000 from ANZ at 3.25%. When the interest on the loan is greater the return on my other assets, I’ll simply pay out the loan. Debt is cheap.

      • Rorke's DriftMEMBER

        Im with you Angry. About to turn 55 and got shut out 10, 20 and 30 years ago due to cyclical industry downturns including early 90s and later gfc. Plus doing all the wrong things like starting businesses and getting three university degrees, overseas work experience, working hard and other dumb things. The game for the last 30years was actually all about getting a government or other secure job for the cash flow and then max leverage into the credit driven asset bubble. If the secure job paid bonuses and other risk free upside then happy days.
        Us early GenXers sitting just behind the boomers had the worse of it. The millenials are actually fine I expect as either the credit bubble collapses, they inherit the boomer wealth or have just enough distance from the boomers to pick up discarded assets as the boomers age.
        I’m cashed up anyway, but no interest in buying now and letting a boomer cash out. I’ll wait for a collapse or not play at all.

        • I am with you. As I have said earlier, I think us Xers will be remembered as the ‘Shadow Generation’, growing up (and old) in the shadow of a massive demographic that has outvoted us our whole adult lives and been an incredible position to build, and retain wealth and then make systemic changes against the younger generations to keep the playing field uneven. I think most Xers, by now, are thoroughly fed up and just looking forward to retirement, knowing most of the plum executive jobs were unattainable and squatted in for as long as possible by the boomers, who got decent pay rises and had strong unions in their climb upwards, with pay rises and an actual opportunity for advancement. In their era, housing was snapped up for a bargain (2-3 x income) and then paid off quickly and leveraged with sweet, sweet negative gearing to officially ‘lower’ their executive salaries as they advanced, so they probably pay less tax then the poor schlackies stuck under them, who can’t even afford a house in Mount Druitt. Then they don’t want to pay out normal pay increases (except for their executive salaries and bonuses) thereby riding the following generation THEIR ENTIRE LIVES into the dust. It’s s**t and makes me so angry. Free uni for them…privatise it for the next gens. Etc etc it is just so fucking mean which is what hurts the most….they have their house, they’ve been able tp prosper…why not give the next gens a turn? Why not vote to scrap negative gearing as it won’t effect your house you live in. Just even the field for investors with home buyers. I know I want to in my old age help out the young. Life is tough and they are the future, not me. Even if I ever manage to buy something I will still be behind negative gearing reforms and cop my on paper loss because shelter comes before profits. We live in a very diseased Australia when it comes to intergenerational theft. It isn’t even about stealing from the young now….because of the astronomical debt they are getting in *just for shelter* their entire working lives will be spent paying off the million dollar mortgage, forever in fear of an interest rate increase that can’t be accomodated because of flat wages. It’s a horrible, horrible future to contemplate. Incidentally, I think the absolute *worst* part of being born a Gen X is that I was told by my grandparents (who survived the depression) and parents that is was important to be a saver, only buy what you can afford and be fruga, etc, l but it has been the *worst* way to live my life these past decades, because I should have taken on a lot more debt and been comfortable spending spending spending. I have old fashioned values in a world that does not like or reward savers or people that delay gratification. At least the younger generations are growing up to love debt which will, it appears, be a much smarter way to live their lives. My values do not fit the world now, so I am pretty much fucked.

      • Guess it depends where you’re looking. Potential house owner occupier here, looking Sydneys lower noth shore and prices have jumped about 10% in the last 6 months. I couldn’t understand why until I went back to my bank to renew my pre-approval and they said we can get another 200k! I think with 0 fast approaching this bounce is finished. Whether it flatlines or falls from here is anyones guess.

    • Hill Billy 55MEMBER

      CoreLogic are certainly having a lend of those who think their indicies are legit when their Units prices for October for Sydney are supposedly up 1.23%. REALLY! Haven’t they heard of cladding and subsidence issues?

      • Also –

        “ The three major eastern capitals are forecast to see price gains in the 5-10% range”

        Where’s that crash u dunces were celebrating only a few months ago? Hmm?

        You tards are gonna have to wear diapers soon as a safeguard for your stretched out sphincters. Must be painful getting reamed by the market repeatedly, no?

        • desmodromicMEMBER

          Depends on which market. Prices around Greater Adelaide are declining. I’ve just purchased a house and some capital loss over the next 7-8 years is likely but I am comfortable in this market. Hopefully modest or no gains over recent years means only modest losses when the eastern market turns down. Or I could be wrong! At least I’ve ditched the landlord for the first time in a decade.

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