Aussie property values turn negative in 2020

Yesterday, CoreLogic’s daily dwelling values index hit a triple milestone for 2020.

First, the 5-city index finally turned negative (-0.01%) for calendar year 2020:

Yesterday, Melbourne’s decline from its most recent peak (on 6 April 2020) hit 6.0%, whereas Sydney’s decline from its 5 May peak hit 3.0%:

Looking ahead, we expect mortgage demand to increase as the Reserve Bank of Australia monetises the mortgage market via the Term Funding Facility (TFF) and the Morrison Government abolishes responsible lending laws.

On the other hand, the collapse in immigration and the unwind of emergency income support (see next chart) will weigh on prices in 2021.

It’s going to be a titanic ‘tug-of-war’.

Unconventional Economist

Comments

  1. Certainly not for freestanding houses, you know the ones people really want to live in, in this covid times, with a backyard.They are through the roof IMO, especially in SEQ.Noone want dog boxes, there is no market for that anymore, their figures are irrelevant.

    By the way there are quite few new kids from Melbourne at my kids’ school this term.Migration Mel to SEQ is probably material.

      • nah mate.. these are the super savvy investors waiting for things to pick before listing their snapped properties. Only amateurs sell early. Savvy ones have wisdom on their side so waited for the right moment – for people to have their JK & JS reduced, banks to tell people it’s time to start paying your bills again, companies to start cutting jobs etc.

      • lets hope. planning to sell the joint in Burleigh when the GC does its out-of-cycle thang… I expect minimum double what we paid in 2015. Dumb southern locusts always pickup GC property at it’s maxim before I buy it back for half a yr later :\

      • Popliteal fossa

        I purchased almost 12 months ago (similar to you Gav) In brisbane. Very similar house behind us is currently listed for $140k higher than what we paid. Yes its a product of limited supply excessive demand with brief period of being cashed up (thinking they got a bargin) but property is only hot hot hot currently if you’re not an apartment.

        At the start of this I thought maybe we’d made the wrong decision buying last year, but clearly we were in the right.

        • My almost neighbor sold last month for 15% higher than 2017 sold price, (1.8M, Goldcoast) to a couple from Melbourne too. Anecdotes of course but I think there is a migration to SEQ going on.

        • Yes I was wondering the same as you, but I suspect things will turn sour in 18 months time as always predicted. I just can’t see how today’s prices make sense for most people given the average wage. But I have been wrong about this for years.. so I may continue to be wrong. (even though I purchased so being wrong isn’t a bad thing in that sense..).

          • Honestly, a price correction (and subsequent change in housing policy and sentiment….yeah right) is strongly needed in this country. With that, value is not a HUGE concern to me – I’ll always keep the house as it’s a great location and fortnightly repayments are much less than equivalent rent. it works out approx. $250 a week cheaper to own than rent (not including rates etc)…

            IIRC you have a very minimal loan amount? Unless you were planning a move or to ‘flip’ the joint then it hsouldn’t make much difference to you either

            …previous hm520 btw

  2. Heard some interesting things recently.

    Chinese investors are not coming back as their government is cracking down on money laundering. US & UK are making plays for HK and Taiwan citizens, but Australia is too slow or scared of China to publicly announce something similar.

    Spoke to a banker about Australian based Chinese companies purchasing coal and iron ore, and Australian banks using that as collateral to lend for property investment. With recent murmers from China about banning Australian coal imports, this doesn’t sound like it will go well.

    Apparently the state RE bodies are pushing for an end to Jobkeeper, income supports and payment deferrals as this will force vendors to make a decision about selling. Can only conclude that the lack of sales listings and turnover must really be killing them.

    • The china investors thieved from this country at the command and behest of their nazi the china government. Real estate or resources or companies it was all funded by and part of the plan by the thieving the china. They think now we are going to be worse of by holding back the drug money they have been feeding us. The china never cared about money laundering as they provided the money. The US and UK can have the Tawian and HK citizens. Why would we welcome people here who are too cowardly to stay and fight for their homes freedom.

    • Very very interesting as the word I got from a blue chip suburb agent was they were advised NOT to close agencies or take leave in January as there would be an avalanche of new listings coming. This was supposedly from the peak body. Based on what you’re saying it might just be wishful thinking, but he did say he’s already fielding calls from distressed vendors needing to offload. It’s been difficult to action them with the lockdown.

      • Arthur Schopenhauer

        There is a lot of ‘better living through debt’ in 3084 & 3079, but no listings, as of yet. A few vanity mansions are being shopped around “off market” and a deceased estate or two, other than that nothing to see here.

      • Can’t name it, they watch and I like the conduit/heads up. No explosion in listings that I can see, not sure what the significance of January is, but let’s see.

          • It ain’t your old stomping ground, I can say that. The flow of info has been good, need to preserve it.

        • James, ole mate, January in SEQ is cyclone season
          the BOM says its doing to be a hum dinger, I agree.
          you know, plenty of humming and howling and much dinging.
          there are plenty of punters in circulation now, who have never experienced a real cyclone
          it will be an eye opener for them.

          • Murdochs sock puppets

            Lol are you sure you live in seq cyclones only come down to bundy max seq just gets the rain depression
            Gold Coast hinterland sunshine coast hinterland is we’re the money is pouring in still convenient to the cities yea Har iam cowboy on Mexicans I ride

          • Interesting:
            Since your man at the strayan mucked up the story on the grantham flood and got himself sued
            About the only benefit from that was the flood maps of the GC and SC were updated, under much protest from the councils, to show 2/3 of the GC and about ¼ of the SC flood in any sort of rain depression or cyclone.
            You could easily ammend that cartoon in the your rag yesterday show any punter living in a canal estate in this region, in a similar situation.

    • Less Woke More BlokeMEMBER

      Apparently the state RE bodies are pushing for an end to Jobkeeper, income supports and payment deferrals as this will force vendors to make a decision about selling. Can only conclude that the lack of sales listings and turnover must really be killing them.

      Sorry for the delay in responding, I had to head to my local swiss bank to get my special edition Stradivarius I keep for occassions such as this. What shall we play? Some mournful Vivaldi?

      They want an end to JK just to get vendors to sell? What a bunch of carnts.

      Maybe if they did their jobs properly and stopped drinking their own bathwater (waves at Demons fans) they would convince their vendors to sell fast and first.

  3. NEW ZEALAND: YOUNG KIWIS WILL WISELY FLEE TO INCREASINGLY AFFORDABLE AUSTRALIA …

    Election 2020: Facing dim prospects at home, young Kiwis might vote with their feet and leave … Thomas Coughlan OPINION … Stuff New Zealand

    https://www.stuff.co.nz/national/politics/300131692/election-2020-facing-dim-prospects-at-home-young-kiwis-might-vote-with-their-feet-and-leave

    … extract …

    … It’s not for lack of understanding either: MPs, through select committee work or constituent cases are as afraid about the future as the next person; more so because they know the limitations of government when it comes to fixing problems.

    Let’s go back to that 2030 example: if house prices rise at 6 per cent a year (the median home value in August this year was 16 per cent higher than a year ago) the median home could cost as much as $1.2 million by 2030, in Auckland the median would be about $1.7m.

    Wages aren’t rising anywhere near that fast; even if they grow at 3 per cent a year, the median Auckland income will just scrape $100,000, one-seventeenth of the median house price in the city. … read more via hyperlink above …

  4. Pool deck murmurs from yesterday. This is a sampleof one but their opinions mirror other discussions I’ve had with gen xers over the past couple of months. Keep the borders closed if it means no immigration and no foreign students. The economic pain is coming anyway so as a society we might as well try and make the economy a bit healthy anyway. This wholeCovid thing has made them aware of how truly awful/evil the Chinese gov is. Oz needs to engage more further with allies to block China in the Pacific and gain supply chain independence in critical areas.

    A friend who has lost her job teaching English to foreign students is very conflicted. She’s sad she lost her job (she liked it and was good at it) but she absolutely HATED what the universities had become and thinks they deserve everything they’re getting (even though it means her tenured husband is working full time during his long service leave as all the casuals have been sacked and he can’t bear burdening colleagues even more, plus the politics of that wouldn’t be good).

    I think there is a lot of rage and despair out there

      • They’re all aware that tptb want immigration to restart immediately. I’m just reporting that a lot of very mainstream purple who you might not immediately think of as deep thinkers, would be happy to see the borders remain closed and bygger the economic consequences

        • Totes BeWokeMEMBER

          I like hearing that, but wonder if Australians are ready to do what needs to be done.

          IMO, we’ve let it go ffffaaaaarrrr too long and we’ve all now got too much skin in the game.

          Labor have destroyed us, and it’s extremely hard to undo, given so many Australians have relatives they want to bring here, have zero loyalty to our environment, culture, society, and theres so many Australians in insane levels of debt.

          I’ll be extremely surprised if Australia votes against immigration.

          We have wrecked our country and IMO theres no turning back. It’s going to get far worse from here.

          Best we can do is apologise to our kids for what we’ve done to their futures.

          • Well these are all anglo Aussies who have been here for generations and don’t have family they want to bring here. One voluntarily said they’d pay 20% more if something didn’t come from China. I have no idea how serious they are about this, but it is interesting to hear them saying all of this with no prompting. They appear to have a pretty good understanding of the trouble we’re in and the pain we are facing and they just don’t care. They want this fixed, knowing it’s a long hard slog. They’ve got kids (I don’t) and they are very concerned about the world their kids will be living in. I’m guessing they’re ok re debt levels and either own their own place or will soon (ish). They’re not high income earners, but sold middle Australia.

          • Totes BeWokeMEMBER

            I hear you, i experience the same from people but I fear there’s now enough weight to make immigration a perpetual thing now (yeah yeah I know where that leads). I’m not purposely being argumentative, I just genuinely think it’s too late.

            I hope i don’t get to say to all the people who called me alarmist over the years “i told you so”, but I will.

    • Less Woke More BlokeMEMBER

      My boomer father in law thinks we need to restart immigration as we have an aging population and need workers/growth

      Maybe you could draw down on your capital and not draw a pension?

  5. Goldstandard1MEMBER

    “Titanic” is right. Like how it hit the iceberg and everyone was saying how it couldn’t sink…..then they found out there wasn’t enough lifeboats and the ship actually sank.

    • Totes BeWokeMEMBER

      Do you remember all the do gooders in the life rafts wanting to go over and save everyone floating around in the water? A few sensible ones stopped them. Of course they made them out to be evil.

      That’s Australia. Woke do gooders not smart enough to understand the actual situation.

  6. Developers are in a HUGE amount of hot water here in SEQ.
    This cleanout of their dodgy carry-ons,(as follows) will cross the border.
    The LNP has recommended, freckles, their leader, front an inquiry into her involvement with developers. 3 weeks out from a state election,

    ICAC heard revelations Ms Berejiklian knew Mr Maguire was receiving commissions for brokering property deals as far back as 2014. Several phone calls intercepted by the ICAC also revealed Mr Maguire extensively discussed his personal finances with Ms Berejiklian.
    In one phone call between the pair on November 15, 2017, Maguire asked Berejiklian if she had received an email from Ms Raedler Waterhouse.
    When Ms Berejiklian responded “no”, Mr Maguire said:
    “You will.
    She’ll send you an email.
    She’s really pissed off now so um, about the, you know, the, the [Badgery’s Creek] airport.”
    Mr Maguire gave Ms Berejiklian personal email address to Ms Waterhouse to help her provoke a “tickle from up top” on a road issue affecting her land near the Western Sydney Airport site.
    Scott from marketing also defended Ms Berejiklian for a second day, insisting the Premier has his “absolute support”.

  7. I have the same amount of sympathy for her that she and her party showed in 2017 towards life long residents/ families when the Berejiklian government sold off public housing at Millers Point and the Sirius building.

    That is, zero.

  8. These CoreLogic numbers look like BS to me.
    Anecdotal evidence indicates that drops in Melbourne are MUCH higher than indicated by these graphs.
    And if you add the purchase and sale costs; investors who bought after 2017 will be staring down the barrel of a serious loss.

  9. Scotty in Rocky:
    “I don’t know what the Labor Party thinks a high income is but we’re standing here in Rockhampton and I remember when Bill Shorten went up to Gladstone [at the last election] and he talked to people up there and he wouldn’t tell the truth that he was not going to go ahead with the tax cuts that we took to the election.”
    https://www.abc.net.au/news/2020-10-14/south-rockhampton-flood-levee-faces-funding-challenge/12761640

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