Property Headlines: Updated Property Forecast From Major Credit Rating Agency + the latest data | Property Insiders [VIDEO]

It wasn’t that long ago that we were officially advised that Australia is in recession, but some people are wondering is it already all over, with spending increasing more jobs being created and homebuyer borrowing increasing.

Of course, the third quarter of 2020 finishes at the end of this month, but we won’t officially know whether we’ve had another quarter of negative GDP for quite some time.

And yes, there still is plenty of bad news out there, and there is more to come, there’s also lots of good news if you look for it. Market

But interestingly many of the property pessimists who predicted real estate Armageddon only a few months ago I’m now backpedaling.

At the time of the first lockdown in March this year, the Chicken Littles hit the streets, the airwaves and the internet declaring that the world as we know it was about to end.

Remember the story of Chicken Little and Henny Penney?

Chicken Little thought the sky was falling – but he was wrong.

A bit like the property Chicken Littles

Yes, it is true the picture looked bleak back them; some would say it still does.

The problem is fear is a very powerful emotion, and one that these people, these Chicken Littles, used to grab the media’s attention.

Unfortunately, these ‘Chicken Littles’ did nothing but cause chaos and deflate the financial dreams of their fellow Australians, all for the sake of a little publicity.

You see… when we look back at the property predictions made earlier this year by some high-profile economists as well as the usual tribe of property naysayers attempting to exploit the pandemic for publicity, you’ll find they were consistently wrong.

Well, today in my weekly chat with Dr. Andrew Wilson,  Australia’s leading housing economist I’d like to discuss a new bad news forecast for Australian property by international rating house Fitch Ratings and see if he thinks that this is also going to be wrong.

He will also give us an update on the latest property data and some good news economic date.

Another forecast of house price declines.

This week one of the world’s major credit rating agencies- Fitch Ratings – forecast Australia’s house prices are set to decline by 5%-10% over the next 12 to 18 months, as net immigration weakens sharply.

Aus House Prices

Fitch explained that immigration had already been slowing prior to the outbreak of the pandemic, but has plunged since the health crisis led to strict controls on international travel.

The Australian government in May predicted that immigration would fall by 15% in the year to June 2020 (FY20) and by a further 85% in FY21.

This would represent a fall of almost 200,000 permanent arrivals in FY21 relative to FY19, and mark the lowest level of net immigration since June 1993.

Aus Net Immigration

It’s interesting to see Fitch’s Australian house price forecast in January 2019 They said:

“Australia will see the world’s biggest house price declines this year, according to one of the world’s major credit ratings agencies, which declared homeowners would have to wait until 2020 to see any recovery.”

In contrast Westpac recently released an upbeat forecast for house prices in the next couple of years and just like the CBA has backtracked from it’s more pessimistic outlook and predicts house prices rebounding from mid next year.

Westpac forecast

There’s been some encouraging economic news lately.

  • The ANZ Roy Morgan Consumer Sentiment Index has increased for the third week in a row

Confidence Hit High

  •  The Australia share market has signalled improved investor sentiment

Investor Sentiment

  • The Australian dollar remained strong reflecting firm local economic prospects 

Local Economy

 

  • The labour market rebound is encouraging as the national jobless numbers fell sharply

Notional JoblessAct Top EconomyLabour Market

 

This week’s property data provided by Dr. Andrew Wilson of My Housing Market

Watch our video As DR Andrew Wilson gives his commentary on the follwoing data: Andrew Wilson

Auction clearance rates

Auction clearance rates remain firm in Sydney last weekend.

However with Melbourne in lockdown and auctions now being held on line, many properties originally scheduled for auction have been withdrawn and these are classed as non-sales creating a much lower clearance rate than normal.

Auction Results

Sydney Auction Results

 

Melbourne Auction

Melbourne Property

Melbourne Property

 

Newly listed homes for sale:

Fewer homes have been coming on the market for sale over the last week, particularly in Victoria.

Watch our video as DR Andrew Wilson gives his commentary on the following charts:

New Listing Real Time2Daily New Listing2Daily New ListingNew Listing Real Time

New Sales Index:

 

Sales Data 5Sales Data4Sales Data3Sales Data2Sales Data

 

Now is the time to take action and set yourself for the opportunities that will present themselves as the market moves on

Metropole Team

If you’re wondering what will happen to property in 2020–2021 you are not alone.

You can trust the team at Metropole to provide you with direction, guidance, and results.

In challenging times like we are currently experiencing you need an advisor who takes a holistic approach to your wealth creation and that’s what you exactly what you get from the multi award-winning team at Metropole.

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  1. Strategic property advice. – Allow us to build a Strategic Property Plan for you and your family.  Planning is bringing the future into the present so you can do something about it now!  This will give you direction, results, and more certainty. Click here to learn more
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Michael is a director of Metropole Property Strategists who help their clients grow, protect and pass on their wealth through independent, unbiased property advice and advocacy. He's once again been voted Australia's leading property investment adviser and one of Australia's 50 most influential Thought Leaders. His opinions are regularly featured in the media. Visit Metropole.com.au


'Property Headlines: Updated Property Forecast From Major Credit Rating Agency + the latest data | Property Insiders [VIDEO]' have 4 comments

    Avatar

    July 24, 2020 Martin

    The RBA will print money. And has printed plenty of it already to fight covid-19. It just doesn’t give the money directly to the government. It prints new money and uses it to buy government bonds on the secondary market so that institutions can take a cut as they buy the newly issued bonds from the government So that the government can pay for jobkeeper and Then these institutions onsell them to the RBA for a markup.

    Reply

      Michael Yardney

      July 25, 2020 Michael Yardney

      There has been a lot of discussion recently about Modern Monetary Theory, which suggests central banks should print more money and then give (lend) it to the government, to help pay for it debts.
      This week RBA governor Philip Lowe said that he won’t do that (print extra money) instead the banks should borrow on the open market at the prevailing low interest rates because they can afford it.
      Rather than print more money he gave the Morrison government the green light to increase debt levels and lock in a larger budget deficit to support the economy during its recovery from the virus crisis

      Reply

    Avatar

    June 26, 2020 Alex P.

    While Dr Wilson may say that more sellers entering the market is an expression of confidence, the flip side is that it may be the smart money taking the opportunity to exit while prices are still holding up. If you drill down in the data is there a way to differentiate whether these are investment properties or owner occupied properties being sold and how does that relate to historical data. Second point is that government intervention has done a good job of addressing short term liquidity over the crisis but there have been no measures on a similar scale to address solvency, and solvency is what really matters after the liquidity tap has been turned off.

    Reply

      Michael Yardney

      June 26, 2020 Michael Yardney

      Alex, you are right on both counts.

      Our experience on the ground speaking to buyers, sellers and estate agents, is that there are very few distressed properties coming on the market at present.

      Similarly we do not believe the government is going to pull the rug out from under us in September after he’s gone to such an effort to support the economy and our markets

      Reply


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