What if now prices only go down?
In some Queensland centres almost every commercial property is ‘For Lease’. In my residential street seven houses are currently ‘For Sale’. We’re told that Melbournians are leaving Victoria in their droves and buying Sunshine Coast properties ‘site unseen’. Whilst in Cairns 16,000 JobKeepers are now reportedly on the dole.
Can the housing market be sustained?
Australia’s TV and radio channels continually report on rising house prices and extraordinary record-high auction sales.
For the last decade, with the rise of social media, us humans have been programmed to value instant gratification over almost everything else. We’ve all been sold the ‘dream’ that we can sell our house for unprecedented profits, we can ‘flip a wreck and make a million’ and that house prices will only soar.
Pre-COVID, if someone bought ten inner city apartments purely to rent them out on AirBnB for profit we didn’t talk about capitalism or greed. We called it ‘sharing’ and the ‘Sharing Economy’.
Wil these urban trends last?
Last month, the ABS released their Net Overseas Migration (NOM) data for the September quarter of 2020. Net Overseas Migration is the net gain or loss of population through immigration to Australia and emigration from Australia. It has been the biggest driver of population growth and demand for housing in Australia since 2005. It’s an important factor in forecasting population and demand for housing in the years ahead. With Australian borders firmly closed and highly controlled travel exemptions our NOM has been significantly and negatively impacted.
Let’s just say that when you remove 300,000 people from the population – those you were expecting to move here – then suddenly there are a lot more are houses set to be built than there are people to live in them.
Some experts suggest that Australia could finish the decade with up to two million fewer people than had been previously forecast because of the long-lasting effects of the global pandemic and restricted global mobility.
The impacts are far reaching. We’re already seeing a significant increase in house and apartment vacancy rates in inner-city areas. Plus, the casualisation and furloughing of the workforce means people are less and less likely, or able, to commit to a mortgage.
Then there’s the ongoing issues with social and affordable housing.
The ACT Housing Strategy, as one example, provides a roadmap for housing in the ACT for the next decade. The aims, targets and goals include: 3,000 new homes required each year, 400 affordable dwellings per year, and; 630 social and affordable dwellings per annum. What does all that really mean?
- Providing 58 new homes a week.
- Providing 8 affordable dwellings every week
- Providing 12 new social and affordable dwellings every single week,
Can that be maintained? I’ll let you decide!
We’ve been sold the ‘Great Australian or American Dream’ – watching house prices skyrocket, renovating wrecks for profit and working flat out to pay off a 30 year mortgage.
Now that dream is broken, and the impacts are unspoken.