Best Asia real estate editor's comments:
Any of you who have been following my real estate predictions for the last 40 years are well aware that I have a uncanny track record of accurately predicting market trends, especially down markets.
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| Lawrence speaking as part smart Money investment conference In Hong Kong 10 years ago |
Last year while prices were still going up In Australia I predicted that real estate in most major Australian cities would top and head down, except for Perth.
Now a year later prices have dropped 3% to 5%,
My prediction of an exponential downturn with prices dropping faster and faster is now coming true with the statement below "losses in Melbourne accelerated".
The real estate market trends are long-term friends and can last 3 to 10 years.
The Normal Stages of a Real Estate Bear Market:
Stage I : Disbelief: Owners don't believe that it is heading down.
Stage 2: Belief: They Recognize that it is down but believe it will come back up.
Stage 3: Panic: When the panic selling hits the Chinese will not be there to bail them out this time and prices will drop 20% to 50% especially on the more expensive homes.
I hate to be the bearer of bad news but this is reality.
What should Australian real estate owners do?
If you plan on living in the home the rest of your life and don't care about losing several hundred thousand dollars the next couple years ignore the market trend and be happy.
If you want to get out at the top and get into markets that are starting to happen again after four years downturn look at Bali and specifically our Best Asia real estate website with over 200 fresh listings. Prices of properties that are down 20% to 50% from the 2014 and starting back up.
TUE, SEP 04, 2018 - 5:50 AM
Sydney
AUSTRALIAN home prices slipped for the 11th straight month in August as losses in Melbourne accelerated while Sydney remained weak, data showed on Monday, a trend that could worsen given upward pressure on mortgage rates at some banks.
Property consultant CoreLogic said its index of home prices nationally dropped 0.3 per cent in August, from July, leading to an annual fall of 2 per cent.
Values in the combined capital cities fell 0.4 per cent in the month and 2.9 per cent for the year. Prices outside the cities eased 0.2 per cent in August, but were still 1.6 per cent higher on a year earlier.
"Weaker housing market conditions can be tied back to a variety of factors, foremost of which is the tighter credit environment which has slowed market activity, especially among investors," said CoreLogic head of research Tim Lawless.
SEE ALSO: Australia's crackdown on property lending fuels lucrative debt market
Regulators have clamped down on risky lending by banks, particularly for interest-only loans, while a raft of scandals across the industry has added to the air of caution.
Last week, Westpac Banking also raised its mortgage rates to protect profit margins in the face of higher funding costs in the wholesale market.
The slowdown has been greatest in Sydney where prices were down 5.6 per cent on the year, though Melbourne was starting to catch up with an annual drop of 1.7 per cent.
Sydney and Melbourne comprise about 60 per cent of Australia's housing market by value and 40 per cent by number. The weakness was concentrated in the premium sector of the housing market in Sydney and Melbourne, with less expensive property faring much better, noted Mr Lawless. REUTERS
One strong sign of that is our own market in Sanur, Bali where there has not been a Bali Luxury Villa sold in almost 2 years. In just the last two weeks two sold primarily to baby boomers who are gonna retire here as I've been predicting as well.
Sydney
AUSTRALIAN home prices slipped for the 11th straight month in August as losses in Melbourne accelerated while Sydney remained weak, data showed on Monday, a trend that could worsen given upward pressure on mortgage rates at some banks.
Property consultant CoreLogic said its index of home prices nationally dropped 0.3 per cent in August, from July, leading to an annual fall of 2 per cent.
Values in the combined capital cities fell 0.4 per cent in the month and 2.9 per cent for the year. Prices outside the cities eased 0.2 per cent in August, but were still 1.6 per cent higher on a year earlier.
"Weaker housing market conditions can be tied back to a variety of factors, foremost of which is the tighter credit environment which has slowed market activity, especially among investors," said CoreLogic head of research Tim Lawless.
SEE ALSO: Australia's crackdown on property lending fuels lucrative debt market
Regulators have clamped down on risky lending by banks, particularly for interest-only loans, while a raft of scandals across the industry has added to the air of caution.
Last week, Westpac Banking also raised its mortgage rates to protect profit margins in the face of higher funding costs in the wholesale market.
The slowdown has been greatest in Sydney where prices were down 5.6 per cent on the year, though Melbourne was starting to catch up with an annual drop of 1.7 per cent.
Sydney and Melbourne comprise about 60 per cent of Australia's housing market by value and 40 per cent by number. The weakness was concentrated in the premium sector of the housing market in Sydney and Melbourne, with less expensive property faring much better, noted Mr Lawless. REUTERS
Best Asia Real Estate editor's comments:
Well my crystal ball was working overtime last year when I stuck my neck out and predicted that Australian real estate, in major cities such as in Melbourne, Sydney and Brisbane were going to crash because it didn't make financial sense anymore.
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| Lawrence lecturing about Bali real estate market December 2017 |
A market motivated mostly by speculation from foreign buyers is always doomed to crash.
It happened in America in 2007, Singapore five years ago and it even happened in Bali four years ago. Since then prices in most of those areas have come down 20% to 40%.
I always tell investors in real estate here is one sure fire method to decide a property or market is a great investment, a simply to a cash flow projection acid test.
Can you buy a two or three bedroom home or condominium and rent it out for positive cash flow being very conservative about your rental income and occupancy.
If it does like you can in Bali right now where you can buy a $158,000 luxury villa and receive $20-$30,000 a year net income then it makes sense. If it doesn't, stand aside and look for greener pastures such as Bali right now.
Whereas Australia and New Zealand and and Hong Kong which I call "the bitcoin of the real estate industry" are probably beginning to see a topping off or an exponential downturn we are starting to see Bali turn up.
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| Three bedroom, four bath Bali luxury Villa with private 9 m swimming pool on 600 m² of land only $158,000 |
If you want to get in on the second best time to buy Bali real estate this century you better get in now. Don't worry about property ownership because you can obtain 80 year leases, which are 100% legal.
Trust me so long as you can still buy a three bedroom four bathroom Bali Luxury Villa in a great location a few minutes from the beach with private nine meter swimming pool for as little as $158,000. It has a long way to go up with very little risk of going down.
You can start by checking out our huge inventory of the latest great values on Best Asia Real Estate.com or contact me direct and I will customize an investment property for you lawrenceb@ptbali.com
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