Yesterday’s ABS release of a 14.8% fall in seasonally adjusted building approvals shows that property insiders understand that a crash is coming.
If not them, then the banks curtailing credit for housing is another signal that housing is over-priced and well overdue for a major correction.
Last weekend’s housing auction figures showed a record amount of property up for sale. This follows a record month in May with the supply of auctionable properties at levels comparable to the spring selling fever.
Why would there be such a huge volume of auctions at this point in time?
One could imagine the pursuit of the greater fool has accelerated as the last days of the Australian property bubble are counted down.
But hang on, isn’t there a housing shortage? Where are all these properties coming from? They wouldn’t be speculative vacancies would they? Download our remixed and re-released speculative vacancies report, complete with a raft of graphs.
The RBA’s decision to leave interest rates alone could well delay the crash, but in effect string out the inevitable pain.
With consumer confidence plummeting, retailers such as Clive Peters in liquidation and a raft of others delivering profit downgrades (Harvey Norman, Fantastic Furniture and even Virgin Air), the pain of high land prices is hurting home owners and renters alike.
Tell your friends – Please do not buy property at present!
Tell your friends – if you are about to sign a new lease, make it a monthly lease so are not locked into a long lease when the crash comes.