Post to Facebook on 4/9/2018 at 9:11 AM
Commenting on “Housing slump set to be the largest in nearly 40 years”
https://www.theage.com.au/business/the-economy/australian-home-prices-fall-for-11th-month-in-a-row-20180903-p501e2.html
When the property market was still hot for the wrong reason, I was warning my blog readers about the downturn. Real estate article writers and agents continued to deny the presence of such signals, hoping that these were just hiccups. I specifically stated that from June 2017 all the news media would be slowly but steadily releasing the bad news that the market was on decline.
Many investors as well as developers are like ostriches and to certain extent, some become gamblers. They did not want to acknowledge or failed to recognise that all markets, not just real estate market, involve more than the two groups of players, namely the buyers and sellers. Other players are the local and overseas powerful people / politicians that have a say in the fiscal and monetary policies. The last but not least are the media who can create great hype as well as depress the market.
In May 2015, Australia government announced an amnesty of sorts for foreign investors who had breached Australia residential property law. Offenders had to voluntarily come forward to disclose their ownership by 1 December. Almost the same time followed by the Chinese government tightening outflow of money to foreign countries. Talking to some agencies, the first sign of retreat began in October 2015.
This is a difficult time for the lenders especially the banks which are in serious damage control after the Royal Commission for Banking Industry.
The RBA have kept cash rate constant for 20 months, but half-hearted to raise rate, creating a situation that the banks have no choice but to raise mortgage rate to recover loss margin.
If the media keeps publishing bad news like this, the real estate market will not see recovery soon, and the fall is likely to continue for another 9 months, until June 2019.
Thank you for reading.
Commenting on “Housing slump set to be the largest in nearly 40 years”
https://www.theage.com.au/business/the-economy/australian-home-prices-fall-for-11th-month-in-a-row-20180903-p501e2.html
When the property market was still hot for the wrong reason, I was warning my blog readers about the downturn. Real estate article writers and agents continued to deny the presence of such signals, hoping that these were just hiccups. I specifically stated that from June 2017 all the news media would be slowly but steadily releasing the bad news that the market was on decline.
Many investors as well as developers are like ostriches and to certain extent, some become gamblers. They did not want to acknowledge or failed to recognise that all markets, not just real estate market, involve more than the two groups of players, namely the buyers and sellers. Other players are the local and overseas powerful people / politicians that have a say in the fiscal and monetary policies. The last but not least are the media who can create great hype as well as depress the market.
In May 2015, Australia government announced an amnesty of sorts for foreign investors who had breached Australia residential property law. Offenders had to voluntarily come forward to disclose their ownership by 1 December. Almost the same time followed by the Chinese government tightening outflow of money to foreign countries. Talking to some agencies, the first sign of retreat began in October 2015.
This is a difficult time for the lenders especially the banks which are in serious damage control after the Royal Commission for Banking Industry.
The RBA have kept cash rate constant for 20 months, but half-hearted to raise rate, creating a situation that the banks have no choice but to raise mortgage rate to recover loss margin.
If the media keeps publishing bad news like this, the real estate market will not see recovery soon, and the fall is likely to continue for another 9 months, until June 2019.
Thank you for reading.
