Keeping Up With Other Bubbles – Australia Suddenly Not Running Out Of Land Anymore – “Aussie House Prices Could Halve”

It was supposed to be different there, too

House prices in Sydney and Melbourne could fall by up to 25 per cent this year alone and “there’s a chance they could fall by half” in the coming “property bloodbath”, an economist has warned.
LF Economics founder Lindsay David, who has been warning of the looming property crash for the past five years, said in a report today the recent house price falls were just the beginning.
CoreLogic data for January showed Sydney and Melbourne prices were now 12.3 per cent and 8.7 per cent down from their respective peaks in July and November 2017, with Melbourne falling at “the fastest rate ever seen”.
“We think there’s a chance property prices could fall by half in Sydney and Melbourne over the long run,” David said.
“I wouldn’t be surprised by falls of at least 40 per cent. When all hell breaks loose you’ve only got so many buyers out there.”

His base case of 20 per cent falls in calendar 2019 is significantly more bearish than other experts. AMP Capital is tipping total peak-to-trough falls of 25 per cent in Sydney and Melbourne, while UBS is tipping 25 per cent with a “rising risk of 30 per cent”.
David bases his forecasts largely on the “debt accelerator”, which is strongly correlated with house price growth six months forward. Latest data indicates the debt accelerator is “falling sharply” in Sydney and Melbourne.
If that happens, Sydney and Melbourne “will suffer peak-to-trough falls never experienced before, outside of the 1890s depression and real estate collapse”.

– excerpt and image from ‘Property bloodbath’: Aussie house prices ‘could halve’, Frank Chung, by way of New Zealand Herald, 20 Feb 2019

47 responses to “Keeping Up With Other Bubbles – Australia Suddenly Not Running Out Of Land Anymore – “Aussie House Prices Could Halve”

  1. Apples and oranges. You can’t ski and windsurf on the same day in Sydney.

  2. Aussie Aussie Aussie Oi Oi Oi

    “LF Economics founder” sounds a lot more impressive than “A guy who just barfed up a blog “ and hopes to sell some books to gloom and doomers and preppers.

    10 years overseas sounds more impressive than: Wasted ten years in Houston developing an insulated box tricycle delivery service: Greenrigco. Failed. Defunct. Loser.

    The Ozzie an intelligent person would pay attention to is Jurock. His books are excellent. He has local experience. He’s 75 and doesn’t need to flog books. It was an article he wrote almost 20 years ago that was the catalyst for my own financial legerdemain and purchase of a house – where we’ve raised two kids – have a life.

    Ozzie Ozzie Ozzie Oi Oi Oi

    Thanks Ozzie

    • This is what happens when the cognitive dissonance becomes too much to bear. People start to unravel. Speak in gibberish.

      I expect Arnie’s breakdown is playing out across the BPOE.

      A social crisis looms. The bursting of this bubble will spark panic, rage, and depression. There will be riots. Substance abuse. Car accidents. Fights. Suicides. Murders.

      The cost goes well beyond the financial.

    • This is what happens when the cognitive dissonance becomes too much to bear. People start to unravel. Speak gibberish.

      I suspect Arnie’s meltdown is playing out across the BPOE.

      The cost of this bubble goes well beyond the financial. A social crisis looms.

  3. Stuck in moderation land…

  4. A truth that is about to hit Canadians hard:

  5. i.see.debt.people

    Australia has plenty of land…the Outback! On the other hand, its got no water!

  6. Even prime location is now retracting:

    Ph7-1688 Robson Street, Vancouver
    Aug 22:$3,098,000
    Feb 22: $2,195,000
    Change: – 903000.00 -29%
    A: 2,100,000 $

  7. What was the seller thinking? Land assembly failed?:

    6889 Ash Street, Vancouver
    Aug 14:$4,500,000
    Feb 26: $2,700,000
    Change: – 1800000.00 -40%
    A: $2,827,700

  8. white_angelo_bets_one_dollar

    she named names …

  9. Breaking! Yaletown is now seeing under-assessed sales:

    2503 1033 Marinaside Crescent, Vancouver
    Dec 20:$1,259,000
    Mar 1: $1,100,000
    Change: – 159000.00 -13%
    A: $1,177,000

  10. The market has gone no bid. Never go no bid.

  11. Arnie… Where are you?

  12. 2910 Park Lane: assessment down to $13.6M.
    Listed @ … you have to call, and be sure you’re qualified; not just a curious pleb. If you have to ask the price, you can’t afford it. Odds are the price will be very high.

  13. 2843 20th Ave E: bought near the end of 2017 as a renoflip for $1.3M. Listed as a summer special in 2018 for $1.7M.
    Still listed for the same price 200 days later. Same ad. Summer special.
    Maybe they meant the summer of 2019.

  14. “6988 Mckinnon” – it flanks hyper busy 54th – right across from Champlain Mall.
    “Grand Villa” – godawful pretentious Van Spec box with prarie dog basement suites. Revolting.
    Bought as scraper 3 years ago for $1.3M. Assessed at $2.7M. Listed at $3M.
    “Please not price reduced from $3.288M”.
    That’s true.
    Washer/dryer jammed into a closet summarizes the aesthetic of this thoroughly ridiculous pile with massive ugly lighting.
    Stagers stuck – Inspire Yourself – framed prints over the bed. Omg.
    Message to the glass tables stagers and builders of this absurdity. Go F… Yourselves. Read some some books. Don’t build this kind of rubbish. $3M for this turd?! Drop the price by a mil. Still wouldn’t buy this garbage.
    Builders: Team Blech and Barf looking to move on to another project. Ha ha.

  15. Canada in huge bubble, not just Vancouver.

  16. 2987 27th Ave E: when this came uo for sale in 2015, it was a feeding frenzy. Purchaser had to come up with a rock solid offer to be successful @ $1.15M. Listed again about a week ago – no pictures – for $1.4M.
    The location is choice: proximity to Skytrain; schools; shopping; parks; south-facing quiet street.
    Curious to see how long it sits.

  17. white_angelo_bets_one_dollar
  18. 310 – 1238 Seymour: Grotesquely obscenely repulsively rich Thomson’s garbage personal rag Grope and Flail has an article saying that this Yaletown condo sold for $33K under list. Boo hoo.
    It was bought over list at $395K under 10 years ago.
    Assessed at $753K, this stupid 1 bed 1 bath loft, listed at $878K, sold for $845K.
    The Grope and Flail. Subscribe now. $1.99/week + taxes. Canada’s richest want more of your money. Subscribe now. Show what a fool you are.

  19. The thread on this Tweet is great. Too bad Vancouver, with rare exceptions, didn’t follow this advice.

  20. But but but only mansions are going down!

  21. Someone wants to leave ASAP 🙂 :

    3927 W 34th Avenue, Vancouver
    Nov 14:$3,599,800
    Mar 25: $2,999,800
    Change: – 600000.00 -17%
    A: $4,102,600

  22. 2987 27th Ave E – after 12 days listed and ‘photos coming soon’ – still no photos.
    3236 27th Ave – same listing rodent. Also listed 12 days. Bought in 2015 within 2 weeks of the other house. Has photos. What a mess. Staging? No. Unmade beds. Crap piled up. Some photos sideways. The toilet shot is special. They still want $300K over purchase price.
    Odds that the owner of these two houses is one and the same?

  23. interesting info, thanks for sharing.

  24. Wha happened?:

    2896 E Georgia Street, Vancouver
    Jan 9:$1,500,000
    Mar 28: $999,000
    Change: – 501000.00 -33%
    A: $1,500,200

  25. Bubble’s popped. That’s what.

  26. Seeking Knowledge

    Looking forward to new posts, but it has been as quiet here as the real estate market 🙂

  27. Some are running to the exits:

  28. Anything new on the market Arnie?

  29. There’s a five lot wide lot in the Westend with a good cash-generating commercial easy-to-scrape commercial building. This is assessed under $100K. Assessed went up this year from $71M to $78M = 9.5% bump.
    Adjacent are three 33 wides each of whose assessed went from $7M to over $12M = 42% jump.
    It’s a classic battle. There’s more than enough $ here for everyone, but everyone wants to wait. Pay those crazy taxes, and wait. $5M jump in one year. Yowza.

  30. How does growing population affect real estate and rental prices.

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