I am no financial expert or mortgage guru rather I am forced to think about this stuff due to the need of having a shelter and sustainable financial planning. I have only been living in Australia for less than an year but I have been observing the housing market for over 2 years and the prices have never made sense to me.
Actually that's not true , prices do make sense given the environment that is created around a basic need of life( housing).In my amateur analysis of the market the below seem to be the factors over past few 5ish years
-Anyone and everyone can get a loan approved for large sums consequently saved money has no value.
-Negative gearing future proofs any investment against any potential loses on rental income.
-Record immigration intake in the major cities ( that would be people like me) keeps the demand side brimming to the top
-You can't really invest your money elsewhere and make these kinds of returns. Banks pay like 2.35% on long term deposits.
-You can invest in ASX but you need to financially educate yourself and keep updated , not the case with housing.
-Chinese millionaires trying to secure their gains from Chinese government by buying up houses and leaving them empty. Makes sense from their perspective not from a middle class Aussies perspective.
-average price of house is 10-15X the average salary.
Having said that , anything that goes up must come down. One can observe many signals for a bearish housing market but to me the sure-shot sign is when the main stream media ( they are usually last) starts running stories ( mostly for CYA) indicating " adjustments are coming". I have lived through the 2009 global financial meltdown and learnt the valuable lesson that you cannot trust any one source of information and things that don't make sense eventually do make sense ( get corrected/rektd).
a) major correction ( up-to 30%) in prices due by end of 2019
b) only growth in prices would be paused by end of 2019
c) nothing really will change and prices will going up , maybe at a slower pace.
d)anything else ?
Mainstream media coverage of housing recently:
Domain .com news , really ???
