The Australian Economy and Property Markets

[Brinkdude]

An interesting presentation, with lots of graphs. Courtasay of Dr Nicholas Gruen (Peaches Home Loan - with permission from Saul Estlake, Chief Economist ANZ Bank).


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# Residential housing prices are likely to do no more than
CPI inflation, on average.

– although around that average the ‘top end’ of most cities will
see further price gains while small declines are possible in less
‘desirable’ locations

– residential rents are likely to rise further

– the only way to ‘fix’ the affordability problem is to boost supply.

 

[MarkB]

File to big to load.

Available here.

M

 

[MarkB]

- Residential housing prices are likely to do no more than CPI inflation, on average.

And yet he estimates (p. 27) that a shortgage of housing is about to develop.

Economists and their models...

M

 

[Tim]

And no time frame for how long house prices will match CPI?? Maybe he means the 2 years in which economic growth will be strong, and the supply will be low will result in greater increases after 2 years...

Tim

 

[alexlee]

According to the July report by Terry Ryder, he states that only about 10% of total property purchases are from new estates. i.e. 90% come from purchase of existing properties. That means increasing supply at the fringes will do very little to ease housing affordability. It makes sense: people who are looking to buy inner city aren't going to buy out West just because they build a new development. That's why you have declining prices in the West and rising prices at the top end.
Alex

 

[Patosan]

people who are looking to buy inner city aren't going to buy out West just because they build a new development. That's why you have declining prices in the West and rising prices at the top end.
Alex

I've heard this about Sydney,a few times now.
Has anyone seem anything like this in other major cities ?

 

[Ausprop]

It's happening in Perth at the moment. A-grade locations still running strong, B-grade such as the outer burbs are flat or struggling at best. Makes sense to me - with ever rising fuel prices and lifestyle bonuses I have no desire to live in the sticks