Can high Victoria house prices be sustained?

[teejaybee]

Over the past two years+ I have been monitoring house prices in Victoria.

My observation has seen prices continually rising to big numbers .

This very scenario occured in UK post covid with people seeking to 'escape to the country'.

However since interest rates have climbed to thier recent levels the market has stalled and prices reducing along with lack of properties listed on the market.

My question to the forum is do you think the high prices in Victoria (+ australia as a whole) can be sustained.

Estate agents here in the UK tried to continually talk up the market when it was obvious high prices could not be sustained ( thinking of the prospect of lower commisions ! )

The market has proven them wrong and  the grand reset has begun.

Thanks in advance for your opinions

 

[InnerVoice]

Although Australia and the UK are similar in many ways, the economic drivers affecting property prices are quite different in each country. There's a lack of affordable housing in Australia in areas where most people want to live (major cities and coastal regions), and a significant difference in the level of social housing. In the UK approximately 17% of people live in council properties compared with just 4-5% in Australia. This drives prices up at the bottom end of the market, which ripples it's way up.

Australia has never really suffered a significant property crash in the way the UK has. A good friend of mine bought a house in Tamworth in 1988 just before the bubble burst in the early 90s, and sold it in 2003 for almost the same price. There's been a correction here in the last year but it hasn't been significant. Personally I wouldn't bank on a major property crash over here to make it more affordable, but anything's possible of course.

[Marisawright]

20 hours ago, teejaybee said:

Over the past two years+ I have been monitoring house prices in Victoria.

My observation has seen prices continually rising to big numbers ....

However since interest rates have climbed to thier recent levels the market has stalled and prices reducing along with lack of properties listed on the market.

My question to the forum is do you think the high prices in Victoria (+ australia as a whole) can be sustained.

There is currently a rental crisis in Melbourne because there is such a desperate shortage of properties available.  Most capital cities are in a similar situation.  Given that, I don't see any major correction happening.

[Ausvisitor]

Also Melbourne is cheap compared to Sydney so it's unlikely that Vic prices will crash given the huge immigration expected into Vic over the next 7 years

[InnerVoice]

13 hours ago, Ausvisitor said:

Also Melbourne is cheap compared to Sydney so it's unlikely that Vic prices will crash given the huge immigration expected into Vic over the next 7 years

If the last 20 years is anything to go by, more Sydneysiders will move up to SEQ where historically property has been even cheaper and the climate more pleasant. That may well change as I don't think it will be long before Brisbane overtakes Melbourne as the third-most expensive city, after Sydney and Canberra.

[Blue Flu]

If real estate experiences a decline of any substantial extent you will know we have real problems. Every and anything will be thrown at the housing market to ensure that case scenario does not occur. If Australia does have any religion it is the worship and belief in the housing market. Not only worship but a means to salvation. From throwing grants , to probable tax payer funded bailouts, to over generous allowances of foreign investment, to turbo population growth as well as a few other things which I won't elaborate should ensure only the minimal of housing declines. 

This is not good new all round. The one third not owing or on the ladder will increasing be either unable or unwilling to get into a life time of debt and ever increasing cost around housing. Living standards will increasingly be on the decline. Most people will be if lucky, only afford apartment living. The high strata costs around them likely to further ensure debate around the value of this. 

Costs in traditional break way localities like Sunshine Coast and similar will escalate due to demand . This should make people at one point reflect more on the value of entering the Australian real estate market. But who knows? The insanity may have a considerable distance to run. 

[calNgary]

7 hours ago, InnerVoice said:

If the last 20 years is anything to go by, more Sydneysiders will move up to SEQ where historically property has been even cheaper and the climate more pleasant. That may well change as I don't think it will be long before Brisbane overtakes Melbourne as the third-most expensive city, after Sydney and Canberra.

I hope not, we have people (families) living in tents and even in their cars in way too many areas due to a rental and property demand. They are building like crazy, prices on rentals and buying have pretty much doubled in the last 5 or 6 years, many families just cannot afford the costs now. Houses are now being rented out by rooms rather than the whole house and agents are still asking upwards of $200 pr week for each room.. It is crazy.

     Cal x

[Blue Flu]

On 22/07/2023 at 16:59, calNgary said:

I hope not, we have people (families) living in tents and even in their cars in way too many areas due to a rental and property demand. They are building like crazy, prices on rentals and buying have pretty much doubled in the last 5 or 6 years, many families just cannot afford the costs now. Houses are now being rented out by rooms rather than the whole house and agents are still asking upwards of $200 pr week for each room.. It is crazy.

     Cal x

Just the beginning. Not hard to ascertain a whole reset is taking place . What is hard to take though is how it is being done with not much more than a murmur. Another thing the quality of the builds needs to be examined. The fall in living standards is something that should be called to account from the roof tops.