That should take the full year to about a 1% gain compared to 2018.
But let it be known Sydney has bottomed out at an overvalued point.
The most recent undervalued point was 1.6% undervalued in September 2012.
This is all based on our view that there is a relationship between nominal GDP and house prices.
And the more the gap between the two, the more housing prices have to be supported by cheaper and easier access to credit.
Historically, the Sydney housing market has rarely been undervalued.
There has nearly always been some sort of premium attached.
Effectively the current point suggests, that, left unchecked, we could soon be heading towards yet another historic overvaluation point similar to levels recorded in 2003 and 2017.
The key word though in this is “unchecked”.
How will the regulators respond when they read newspaper headlines of a new booming Sydney housing market recording annualised double digit percentage price growth?
Our initial thinking is they are unlikely to respond well and may introduce more lending restrictions once again.
And then finally consider what happens if we have another rate cut?
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