Canberra property prices about to hit the wall?

If I am reading the second graph in the Macrobusiness article correctly, Canberra “dwelling values” have almost quadrupled since the mid-to-late 1990s – that is in-effing-sane.

Gide beats Twain, I think (if it was Twain in that quote about history rhyming):

“Everything that needs to be said has already been said. But since no one was listening, everything must be said again.”

As to property prices, if anyone wants a quiet life, and has saved enough/ will have enough redundancy pay, it will soon be a great time to buy on the south coast.

I read it most days, there’s a lot of good stuff there. Booms always have to bust, bubbles burst, cycles go up, and down. There’s a number of different factors affecting the housing market, some artificial influences, but you’ve got to have faith. The current cost of housing does not reflect real value, just the value placed on it by buyers. If the buyers become poorer, and less numerous, you have to think that prices will come down too.

The thing that interests me, having watched the descent of the US into their financial crisis, is the part played by negative equity. That could play a very powerful part in the future of housing prices (and the economy).

Negative gearing on property and stamp duty also skew the market quite a lot.

Rhymes with what?

What a mystery.

“There’s never been a better time to buy property”

Haven’t heard that being shouted from the rooftops lately.

arescarti42 said :

I didn’t know you were a Macrobusiness reader JB. The analysis they do is miles ahead of pretty much anything else out there.

I concur. I read three websites on a daily basis, and two of those are RA and Macrobusiness. I don’t contribute much to the comments because there’s generally a whole bunch of smart people there who’ve already said what I would’ve said by the time I check it out in the evening. I think I’ve seen your handle there a couple of times though. 🙂

I agree with milkman that they can be a tad conservative, but I’m an engineer, and I make machines that blows stuff up and kills people. I tend to be very cautious and conservative professionally, because if I cock up I might end up killing the wrong people (ie the good guys), and that way of thinking carries over into how I live most of my life. So, a “bearish” or “conservative” attitude, or whatever the term may be is simply something that I appreciate in others, and I see it at macrobusiness.

I would recommend, as strongly as I possibly can, that RA readers go and have a look at the content on macrobusiness.com.au. It’s thought provoking stuff.

Macrobusiness are interesting, but tend to take a bearish view of property. Look to the mid 1990’s for a guide as to what we might expect.

I didn’t know you were a Macrobusiness reader JB. The analysis they do is miles ahead of pretty much anything else out there.

The defining point for me is the fact that allhomes.com.au has added in the last week or two a reduced price page for rentals and sales. Each day so far 10-20 places for sale have had their asking prices dropped, and 30-40 rentals have their asking rents dropped.

Such a page would have been completely pointless a year or two ago.