The ABS Eight Capital Cities House Price Indexes 6416.0 released today shows the property market is totally stagnant with prices unmoved, says Prosper Australia.
“Property spruikers calling ‘Bottom!’ based on this data – and they will be – are misleading homebuyers. Sadly, they have come to believe their own one-sided narrative,” David Collyer Campaign Manager for Prosper Australia said today.
The 0.5 per cent nominal increase turns into a -0.01 per cent decrease after adjusting for inflation. This is despite cumulative interest rate cuts of 1.25 per cent over the last year which ought to have made property significantly more attractive.
“The opportunity costs of holding property at the moment are very high, compared to the riskless Commonwealth bond rate.”
Meanwhile, sales volumes continue to fall, the stock of unsold properties continues to rise, building approvals are very weak and housing finance is bumping along at 35 year lows.
For Australia’s 1.1 million negative gearers, this is yet another three months lost subsidising renters, while holding costs continue to drain their cash flow.
“We repeat our warning to potential homebuyers to stay out of this market ahead of expected price falls.”
Don’t Buy Now!
Media contact: David Collyer 0413 248 193
About Prosper: Prosper Australia is a tax reform lobby group and think tank that is now 120 years old. It seeks to move the base of government revenues from taxing individuals and enterprise to capturing the economic rents of the natural endowment, notably through Land Value Tax and Mining Tax.
LOL! Thanks for clearing that up David. I was getting sick of hearing the champagne corks popping at the 0.5% increase and “market improvement”.
Great response, misleading is certainly an accurate call.
Greetings, David. Rapid demographic change is seeing the Australian housing market becoming one of ‘net downsizers’. The percentages of our population in the ‘pre-workforce’, ‘workforce’ and ‘post-workforce’age brackets are changing rapidly. Net overseas migration cannot alter this trend to any extent. The slide in the housing market has now reached that point where a self sustaining ‘positive feedback loop’ of vendor nervousness feeds the confidence of potential purchasers of further falls which causes them to hold off from purchasing which further heightens the anxiety of vendors….Google ‘Japan demographic implosion’, its house price and Nikkei225 indices collapse over the last two decades. Note that our banks have now lengthened their term DEPOSIT periods of late out to 60 months and in one case, to 120 months. Note the narrow spread of rates offered. “The smart money always moves first”.