CoreLogic daily home value index: Prediction status update

[kjw47]

@ngallbass If housing prices fall 60% in the next 2-3 years like this predicts, the Australian economy would be in deep trouble.
I don’t own a home but a 60% reduction is unlikely and would not be a good thing. Yikes

 

[joeswe]

@kjw47 This post isn't a prediction. It's tracking another users prediction that house prices will crash more than 50% over the next couple of years.

 

[wayofthepromise]

@joeswe Yes, in fact, so far it's showing the user is wildly inaccurate

 

[samerobert]

@joeswe I thought his prediction was 50% in real terms by end of 2024 (or maybe 2025). If inflation takes hold, then that might not be as far off as some of us like to think.

 

[jesuslover07]

@samerobert His prediction is in nominal terms, since the index is in nominal terms

 

[samerobert]

@jesuslover07 I always mix those ones. Does nominal mean that if a house is worth 1m today a 50% reduction is .5m? As in we don’t do any inflation trickery?

 

[jesuslover07]

@samerobert Yes, that's right.

 

[diz123]

@kjw47 A 60% correction in the housing market is pretty unlikely I suspect because there is a floor price created by investors. As the price drops the rental yield keeps increasing, particularly as supply is so constrained. Investors don't have to wait for the market to bottom, they just wait for the yield to be too good to ignore and start snapping up properties again.

A 60% fall would see inner city Sydney apartments going for less than $350k, with rents of approx $40k a year.

 

[danacarter]

@diz123 Don't forget construction costs which are sky rocketing as well. This all contributes to the floor price.

I've been told by my real estate agent to increase my insured value on one of my Brisbane properties by 30% as during the floods people were way under insured.

The insurance value of the house itself to rebuild is way more than the purchase price of the land and house when I bought it in 2018.

 

[lindseym1013]

@ngallbass The issue with the original prediction isn’t the wild assumption on a correction 50%. Property corrections happen every few years that’s normal.

The issue is the wild glee they predict the 50% drop and think it’s amazing, when really it’s lots of people losing their home.

When the USA housing market crashed in the GFC, owner occupied rate dropped from 69% to 63%. It’s not investors who hurt the most it’s people losing their home.

It’s one thing to talk financial predictions, it’s another to be a bit of a sociopath gleefully looking forward to so many people being screwed.

Housing affordability is a issue, but house market crashes don’t result in more people owning their home.

 

[kempoutzzz]

@lindseym1013 Some of them even say the quiet part out loud and say they hope for "economic devastation" or a "bloodbath".

My own personal view is that some of them were able to buy 10 years ago but didn't because "it's going to crash" and now they feel like they missed the boat so are desperate for a crash. The main guy has been loudly predicting a crash for at least 5+ years.

 

[billyboy]

@kempoutzzz I bought 11 years ago and also bought 4 years ago

I think property is ridiculously overpriced

It needs to crash and burn...

...but it won't. 15-20% falls max.

I don't like the train of thought that anyone who hopes for a property crash is salty for not buying in.

 

[kempoutzzz]

@billyboy It's not everyone but there are a fair few people like that mixed in with a lot of people who just can't afford to buy in at the moment.

I'm thinking we'll probably see 10-20% aswell but it'll be uneven because places like Adelaide have plenty of room to grow and seem to be flying along. They might steady out or come down a bit.

The property market crashing and burning is a recipe for disaster. It means more than just cheap houses.

 

[shadowprophet]

@lindseym1013 Also suckering in a bunch of people to the -50% hype.

Do date, anyone who waited to buy their home based on the user's wildly inaccurate predictions has got that financial decision catastrophically wrong.

 

[mr12345]

@lindseym1013

When the USA housing market crashed in the GFC, owner occupied rate dropped from 69% to 63%.

Don't forget, that "crash", as catastrophic as it was, only dropped prices by around 30%.

I don't think anyone thinks prices only go up, but it's the scale of the crash he predicts that most have issues with.

 

[_%D7%A1%D7%AA]

@lindseym1013 to be fair to that poster, they have acknowledged that many people will be in trouble so I think this is a little unfair.

 

[caspernl]

@_%D7%A1%D7%AA He’s seems to enjoy it a little too much though!

 

[eddy13]

@caspernl Misery loves company

 

[desiringgodsbest]

@_%D7%A1%D7%AA You see how that makes it worse right?

 

[chaotik31]

@desiringgodsbest From what I've seen, I really don't feel he's taking any more joy from it than the people who are taking joy from the fact house prices have gone up 27.6% over the past couple of years, another figure which is causing a lot of people pain.