In the video above, Martin North from Digital Finance Analytics explores his home price projections using real examples from his Core Market Model.
Some key highlights include discussion about the banks’ $195 billion of mortgage repayment deferrals, which North says will drive “a flood of property coming onto the market between now and early January”:
North also discusses the pending ‘fiscal cliff’, which he describes as “quite troublesome” because “people have become quite used to government support, which is now going away”:
And he gives a quick summary of his latest mortgage stress data, whereby “we’ve got more than 1.5 million households in mortgage stress, rental stress is up, and property investor stress is up”:
Turning to North’s broad modelling:
North’s model forecast’s a peak-to-trough decline of 20.4% over three years for Australian property, with the possibility of 30%-plus declines in the worst case scenario and only a 5%-6% drop in the best case scenario:
Victorian property is most at risk, with a baseline forecast decline of 23.5% over three years:
NSW property is forecast to decline sharply, by 21.5% under North’s baseline forecast:
Interesting analysis that’s well worth watching.