Australian real estate

Posted: November 21, 2017 in Uncategorized

The Reserve bank of Australia said that the Chinese residential property demand (3/4 of all foreign sales) has started to peter out as a consequence of the stricter Chinese capital controls.

And automatically the price of the Australian real estate is starting to be softer. So much for our government assertion that Chinese buy only new dwelling (which is correct, if the law wasn’t so easy to circumvent).

This is not the market crash that some people are hoping for, but a first sign.

The other signs will be

-when rising rates (and our banks get their money from the US – so rising rates in the US) will rise

-if prices (eg fuel) will start to go signal inflation – without wage growth.

So let’s say the next 6 to 9 months will be interesting for the housing market and at least I will not hear anymore the Australian catch phrase – houses double in value every 7 years.

End of the real Estate Boom. After the end of the mining one, after the  end of manufacturing.

The Government says that the new infrastructure spending (75bn over 10 year) will save Australia. As PM Turnbull will last at the most one year, he really does not care ( to be fair, not even Bill Shorten wills ave you – actually he will be worse for real estate).

But a real estate end-of- bubble will not be all bad. It will be a good wake up call.

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