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A truth about value understanding and prophecy to recover



There have been some problems saying that house prices have fallen in Sydney and Melbourne has been a terrible accident to give years beyond.

But one of the most respected economists to Australia is the apparent market disorder that has presented it to a clear vision.

Indeed, Shane Oliver, the chief economist and strategy leader for investment and economics at AMP Capital, said the last 18 months of the dramatic decline in New South Wales and the emergence of Victorian letters "are the end of the world. T ”.

“I'm close to saying that it's an owner-occupier accident,” said Oliver Oliver, telling news.com.au.

It looks at a graph that shows its point, which is moving more than 20 years of property price trends in Sydney and Melbourne, as well as an average for the other capital cities.

“It is showing the big increase in property prices we saw in Sydney and Melbourne, with a number of years of very strong benefits appearing around 2012,” said Professor Oliver.

'It's showing the recent losses in Sydney with prices coming to an end in July 2017, and also in Melbourne, where the prices were high by November 2017.'

The prices of house prices in Sydney increased from the start of the world to its decline, rising with a 72 per cent rate. In Melbourne, property values ​​rose by a significant increase of 56 per cent over the course of its five year period.

“To date, Melbourne is down by 10 per cent and Sydney has declined by around 14 per cent,” said Professor Oliver. “So to get back into view, prices are just going back at 2015 levels and on the way to getting back to 2014 levels.

“We had many years of strong benefits. We give some of that. '

And Professor Oliver said that the graph also displays what he plans to do for the next few years – including when market revival begins.

WHAT HAPPENS?

After years of estimation about how a genuine hot building might be in Sydney and Melbourne, prices began to rise sharply from mid-2017 onwards.

Professor Oliver said it had happened for a number of reasons, linking simultaneously to create a very good storm.

An increase was made in the supply of new homes in the two towns, bringing in new stock with rooms and houses, giving customers more choice.

Other country owners also escaped, with falling activity by two-thirds from 2016 onwards, which was largely the result of a government struggle.

Significant tightening of lending conditions – banks made it harder to get mortgage after pressure from regulators and expect the devastating royal commission – but also influenced the Sydney and Melbourne markets.

“And there was also a lot more investment in investment too,” said Professor Oliver.

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As the table above shows, Professor Oliver said that there were other capital cities – on average the vehicle – had been “very quiet in the scheme”.

“But the chart is clearly delivering a range of results,” he said.

'Perth and Darwin have seen huge prices down, having gone up in Hobart, and have done little in Adelaide, Brisbane and Canberra.

“There was a big increase in Sydney and Melbourne and now they're going through a blow. Other capital cities are not vulnerable simply because they were not moved. They get a slight impact by tightening up on credit conditions and the decline in foreign demand. ”

But Professor Oliver is very careful about mentioning situations in Sydney and Melbourne as an accident, as well as an "extraordinary after-run level".

“Building disaster is what you saw during a Global Financial Emergency in the US and some Europe was a lot harder,” he said.

“People were losing jobs and couldn't attend their loans, letting their property and push down and keep prices.

“In Australia, what we see – so far at least – is a sub-conception after really up. We don't see evidence of panic in the market.

“Some people are panic, sure. I call him FUNGO – fear that I won't find out. Some hopeful investors could get back 10 per cent of their property, now they all receive a tax yield of 2 per cent after costs, so that they could t would like to know. '

WHAT HAPPENS TO DO?

The general consensus among economists and researchers is that falling prices in Sydney and Melbourne are not yet.

Professor Oliver agrees and predicts that there will be a 25 per cent reduction in total from crop to bottom in the two towns.

“So far, Melbourne is down by 10 per cent and Sydney is down by 14 per cent, so we're nearly half way through Melbourne and half way in Sydney,” he said.

Projects are continuing this year and until 2020 before the start of the revival, but it is uncertain that another start is embarking.

Not at all, anyway.

“We hope this will take us back to the cheaper market instead of being the only random one,” said Professor Oliver.

“My decision is that it will be a higher market, the revival rate.

“Housing debt in Australia these days is much higher than it was when prices rose. So people might not want to take over the debts they've taken.

“Secondly, loan rates are much tighter and harder. The way (governors) see things àraidh especially after the royal commission, seems to have stayed that for a while.

“And hopefully, the construction here that we have seen, especially from units, helps return to a more speculative market.” T

But the only big factor is that “tighter time for recovery” would come from developers' confidence.

The decline in Sydney and Melbourne could, along with uncertainty about proposed changes by Labor make the capital gains and negative fees contribution, as well as the reduction in overseas investment demand. T residential development projects.

“It will be amazing to see that developers who are hanging up projects feel so much here and will be working with other lack of resources and back to where we were at the start of the project. , ”said Professor Oliver.

Continue the conversation shannon.molloy@news.com.au


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