Housing Market predictions.


 

No Australian housing crash, but market could stagnate for a decade: Residex’s John Edwards

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Australia’s housing market is not heading for a crash but could undergo a decade-long period of stagnation with house prices declining in real terms, according to Residex CEO John Edwards.

Speaking to Peter Switzer on Sky Business this week, he said a stagnation in house prices was likely if “things continue to the way they are going and the government and RBA do not do the things they need to do” to stimulate a recovery.

“In real terms they are likely to fall marginally over the next decade,” Edwards said.

“A little pessimistic, I know,” he added.
According to Edwards, long-term stagnation only occurs during very severe recessionary or depressionary periods.

However, he said given what was happening in Europe and other parts of the world there could be a global crisis.  “We have one now, but it could get worse.”

Locally, he says the key factor is the unemployment rate.  But he tempered these comments by saying that even in periods when things go badly, property tended to do better than other asset classes.  “The stock market is much more volatile – and you see something [like a crash] much more often.

“Housing remains the best in terms of investment and the lowest and safest risk option.”

Looking at the current capital city housing market, he said the bottom line was that the housing market had improved somewhat over the last few months.
But he said Residex data indicated the housing market was very fragile.
“It has been improving, but it has been in and out of correction in recent times.”

Residex has Australian house prices down around 1.4% to a median of $430,00 for the year to July and unit prices up 0.8% to a median value of $401,500.

Edwards said Sydney was now doing OK and Brisbane is “well out of its correction phase” but Melbourne “looks like it is about to enter a correction phase”.

Edwards said rental rates would rise substantially above inflation due to a shortage of rental property.  “Across the market there are good places to be and bad places to be.”

“Generally the unit market is doing better than houses because of better affordability.
“This is the market that is going to perform best provided we don’t have oversupply issues like markets like Melbourne,” said Edwards.

 

Author: Dianne Ray

I have almost thirty years in business management in the hospitality, tourism, hospitality, real estate and service industries and in education as a teacher in secondary schools and TAFE Colleges. I was born in the Western District in Victoria, my schooling was in Hamilton and Melbourne and my Tertiary Education was at Melbourne and Monash Universities. My family consists of 4 sons, 3 daughter in laws and 5 grandchildren. Over the last 9 years I made my home in Noosa, Queensland and since February 2011 have moved to Brighton, a suburb of Brisbane and contract to 2nd Avenue Realty as a licensed real estate agent. Selling residential property in the the Sandgate, Shorncliffe, Brighton, Deagon, Bracken Ridge and other areas. I also sell and market boutique accommodation properties, such as Bed & Breakfasts,Self contained Cottages around Australia on http://www.dianneray.com Over my life time I have travelled extensively throughout Australia and numerous times overseas. My interests are obviously travel, all aspects of sport especially golf, outdoor pursuits, fine dining, appreciation of wine and love meeting people. I gained my Bachelor of Education and taught secondary and TAFE students for a number of years and studied for my Masters in Business Administration. I have been self employed for the last 20 years comprising owning and operating an exclusive 4.5 star B&B; established an e-commerce business involving the hospitality and accommodation industry; in selling, marketing, training workshops, relief service and management. I changed my career path ten years ago and concentrated on real estate and business broking. I am a licensed real estate agent in Queensland. My involvement in real estate has been very satisfying and I enjoy the interaction with the buyers and sellers. In my role as a real estate agent, I am able to effectively fulfil the needs of clients and this is my passion, and to use my skills to obtain a win/win situation for everyone involved. I believe in the old traditional values of respect, integrity and genuineness and I am very passionate about helping people with their needs and I focus on listening to and genuinely helping my clients. I am a very honest, natural outgoing person who enjoys life to the fullest “My mission is to live with integrity and compassion and to make a positive difference in the lives of others”