Hi all,
LB, points 1-3 I agree, then you go off the rails a little,
"4. As a result of 1-3, demand will drop while supply
continues on because the cost of building new
house is still comparable to buying a "secondhand"
house. Builders need to keep building to feed their
families."
This is not accurate. We had a couple of threads looking at new vs old a couple of months back and the price of the new houses, on smaller blocks of land, in new developments, in established suburbs, was MUCH higher than the established houses. Some up to double the price.
Secondly, history shows us that when there is a downturn in property sales(and price rises), there follows a reduction in home approvals.
If you have a growing population, and a reduction in home approvals, you end up with a growing demand for existing accomodation. Rents begin to rise, followed later by house price rises, then greater development of new housing. That is the cycle of things here.
But you think "this time will be different"!
Kristine,
I noticed a similar thing when I visited my brother in Sydney about 9 years ago. The quality of gardens was appalling compared to the ones in Melbourne.
At the time I wondered if the influence of poker machines in the clubs was causing the difference. Then I wondered if it was just the amount of money spent on the mortgage meant not enough for the garden.
Maybe Melbourne is just following Sydneys lead?
bye
LB, points 1-3 I agree, then you go off the rails a little,
"4. As a result of 1-3, demand will drop while supply
continues on because the cost of building new
house is still comparable to buying a "secondhand"
house. Builders need to keep building to feed their
families."
This is not accurate. We had a couple of threads looking at new vs old a couple of months back and the price of the new houses, on smaller blocks of land, in new developments, in established suburbs, was MUCH higher than the established houses. Some up to double the price.
Secondly, history shows us that when there is a downturn in property sales(and price rises), there follows a reduction in home approvals.
If you have a growing population, and a reduction in home approvals, you end up with a growing demand for existing accomodation. Rents begin to rise, followed later by house price rises, then greater development of new housing. That is the cycle of things here.
But you think "this time will be different"!
Kristine,
I noticed a similar thing when I visited my brother in Sydney about 9 years ago. The quality of gardens was appalling compared to the ones in Melbourne.
At the time I wondered if the influence of poker machines in the clubs was causing the difference. Then I wondered if it was just the amount of money spent on the mortgage meant not enough for the garden.
Maybe Melbourne is just following Sydneys lead?
bye