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When The Property Market Bough Breaks!

Property prices are political not economic. So, while analysts are talking about property price corrections in 2023, and higher levels of defaults; and the IMF talks of a dysfunctional market; the truth is most politicians prefer to sit on the fence and mouth platitudes, to avoid upsetting voters.

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41 Comments

  1. What a nice set up for the populace to beg for a CBDC. Funny that our leading econonits don't know or care to say what the actual cost of a house may be, wasn't it the "Market" that's hot for 2-3% p.a. compounding value that sets the price?? No smells like Ponzi clowns are in full swing as we enter the big event.

  2. Thanks Mr. Martin…OK Kiddies time to man up and admit the Australian voters pre-disposition to existing Tax and Investment benefits around Property… and their ability to change Government not in favour of said items…Grow Up!…at still under 43% of the First Preferrence vote Nationally… no Labor Leader is gunna…reduce Neg Gearing…Capital Gains Tax…Foreign Investors returns in Property or any amendments to the Fixed Unit Trust Laws…etc ad infinitum…now if that First Preferrence vote was to rise to say 48%…then you would see "some" interest…Wot a joke…Labor has no choice in this matter…Tory Liberals win!

  3. North you are like a cheap clock, you call a property crash twice a day for the last 5 years. You never mention the lack of supply of houses for sale and the increase in immigration to oppose declining property prices. Put your money where your mouth is and sell your own home before your predicted crash: All talk with NO SKIN in the game. Your mortgage stress surveys are a fallacy and do not predict a home owner's foreclosure. The banks have many financial arrangements to keep their mortgage junkies alive. Besides, it takes about 5 months to kick a person out of their property. You are blah, blah, blah.

  4. The IMF is a criminal organisation responsible for a lot of the problems we have now and in the future world wide.
    Define a crash as well. What may be a crash for some is nothing for others. We are all responsible for our choices in life and need to accept that, especially when not planning ahead.
    I need prices to rise so i can cash in when i retire early and take my money ava leave Australia. What a dump this place is turning into

  5. This is a possible scenario. Migration will be extremely strong next year. High migration will mean its unlikely Australia will go into a recession, however per capita growth may fall.

    Under this scenario many people will really find life difficult as rates increase.

    Those in difficulties may be forced to sell however if migration is really strong then house prices may not crash.

    In other words no one really cares if people.cant afford their mortgages as long as house prices don't crash.

    I think this is a likely outcome given high migration levels.

  6. The idea of abolishing the tax breaks for property + the redirecting that money towards affordable public housing seems like a win win. In addition to addressing the much talked about supply issue, as well as taking some of the froth out of investment demand. The fact it is not being done makes me wonder if the bubble has really gotten too big to fail. Are governments afraid that a correction becomes a crash, and a systemic risk to the entire country.

  7. I canā€™t wait for Aust. Property market to plummet. Hopefully 60 or 70 pc. Got my popcorn and a beer and it should be like watching a Australian vs Australian blood sport match. Just hoping to see some carnage soon. Really couldnā€™t care less about those that have borrowed more than they should have. Let the hunger games begin. P.S. financially stupid Millennials who have just bought in, blame your baby boomer parents. Like any good criminal, of course Boomers will deny it and blame anything else but itā€™s simply, indisputably their fault. But rises since COVID are yours (milenials) and yours alone but buying in to the madness.

  8. They wont be able to protect the housing market from the looming global downturn. Sure they will try but the forces will be overwhelming.

    Recently thinly traded price increases wont hold. How can they when the majority of Australians can't trade at the prices? There are also psychological changes yet to penetrate the market – sellers waiting patiently on the sidelines will start to sweat soon in the knowledge their assets will be worth less in 12 months than they are now – and between that and forced sellers we will see mid year pinchpoint with no rebound for years to come.

  9. Here we goā€¦an external entity applying pressure albeit verbal observationā€¦but itā€™s the lead up to harsher realities from now on which everyone will refer to

    We told you earlierā€¦hehe finally, sheā€™ll be right mate wonā€™t be uttered too often in the immediate future I think

    Just be productive ā€¦thatā€™s all, itā€™s really simple. And being productive and competitive in a global market DOES NOT INVOLVE building s..t dwellings locally ā€¦especially by the thugs who participate in unions like CFMEU and run riot through the streets of Melbourne due to fears of a needle

    Our countries economic prosperity for the last 30 years were in the hand of tradiesā€¦gouging the govts on infrastructure plans for desal plants, and then in the building of shoddy homes all funded by the ā€œpillarsā€ borrowing on short term money markets

    What a jokeā€¦what a joke

    Where as all the intellectuals spend all their time learning how to operate technology imported into our country, when we should be focusing on getting those people MAKING technology

  10. Well the banks will be fine since we are giving them 6billion dollars a year which we gave to them at 0.1% and now we pay them 3.5%. Thatā€™s about $264 dollars for every man woman and child in Australia. Yet they are still claiming that the country branches they are closing are not ā€œfinancially viableā€. But we are giving them 6billion a year. Who is in charge of our finances – you have to wonder, its not our Reserve Bank or are they bailing them out during this time due to possible defaults.

  11. Great insights, Martin. Especially for the political vs. economic reasons for our continued overpriced property market.
    It's a Ponzi scheme pushing the economy along, where those that want a house will work and scheme tooth and nail to get one. Even if it is unaffordable. But it's not a healthy free market economy. Australia has long lost it's egalitarian quality instead fast becoming a dog-eat-dog society of haves motivated by fear and greed, and have-nots. With the have-nots being dished out some scraps to keep them at home smoking their pipes for comfort.

  12. I love your determination to preach this doom and gloom, have been at it now for years and it still hasnt happened, largest rate rises in 40 years it hasnt happened. Mortgages and interest rates are not the sole driver, housing is more unaffordable now than 7 mths ago. If you believe or hope that house prices will drop 30% when building costs are going up, inflation, well balanced supply to demand and low unemployment, well you may need to keep dreaming with Martin

  13. Policy prescriptions are the root cause of housing issues. We need less "policies" and more freedoms in the market while protecting against monopolies and land banking. Also less protections for banks and installing ceos who run banks like a business instead of being willing to participate in social experiments.

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