What time is it? .........it is daylight savings here
There are markets within markets and sub-markets within them.
Ostensibly I don't see any further correction in a generic sense. Lower end with FHOG scaling back might soften or track sideways and then there is a case to be put forward that investors may pick up the slack.
The higher end took a hammering with the stock market bears and economic climate/correction and has since bounced back.......at least it has around bayside Melbourne where I live..........it has
slam dunked
As for the future, property has never been afforable, particularly if the prosepctive buyers have over-inflated expectations and must have it all now in exactly the location they wish to be, or they must have brand new McMansion with theatres and outdoor rooms larger than life. Many generations prior, people started out where they could and upgraded. So the instant gratifiers can either keep renting where they would like to live or buy somewhere else to get their foot in the door.
We still have a 70 % owner occupier rate here in a generic sense. In the UK and other parts of Europe, it is as low as 40-50%.....hence many more tenants. This may occur here also.
Property is not only driven by investors, owner occupiers predominate and as it is a basic human need (and we are told that there is an under supply), I don't see the sky falling in.
I am not suggesting it's blue sky and everything is roses, however fundamentally, we are chugging along fine. If interest rates rise and some over-extended FHO struggle, then there will be some nice IP's to pick up......watch this space
Having read (a few months ago) The Great Depression Ahead by Harry Dent, the title is far more bearish than the book's contents. Harry Dent does clarify that Australia is far better poised to emerge relatively scar free from the smoke and mirrors of the sub-pime mess and financial derivative products that were more akin to Ponzi.
It is credit here (from that fallout) and ultimate development funds that are harder to source and yet we have a shortage of stock............augurs well for upside to the suply and demand scenario me thinks.......and for the rents that (we as investors) collect.
Personally I cannot see a crash here in Australia...........perhaps softening in FHOG driven outer suburb fringes with little or no amenity that might see its purchasers struggle with rate rises whilst settling for a brand new (shiny) box and the obligatory high end Falcodores, and theatre systems whilst notching up plenty of credit card use.
So whilst I am not off to tell the king that the sky is falling in, I have been sounding like a broken record when I caveat that one needs to keep portfolio LVR's conservative moving forward. Now is not the time to be an uber-bull and max out LVR's and servicibility.......those days will come however not right now.
This only my humble opinion, and there are others that are happy to be more aggressive with their loans moving forward. It all depends on one's situation, pockets, stage of life/investing and master plan.
What time is it?....................It is time to accumulate sensibly and look back in a decade and wished we had bought more