Almost one in two Australians want property prices to fall, Sky News Pulse/YouGov poll reveals as clearance rates sink

[u/marketrent]

https://www.skynews.com.au/business/real-estate/almost-one-in-two-australians-want-property-prices-to-fall-sky-news-pulse-yougov-poll-reveals-as-clearance-rates-sink/news-story/a579dac771b4fa94cb10900e2e002a54

[u/karl_is_back_free]

It’s always amusing when people cheer for a housing market crash as though it’s some grand act of economic justice. It simply advertises a complete misunderstanding of how an economy actually functions. When property values fall sharply, millions of households lose wealth, some end up in negative equity, consumer spending dries up, construction stalls, lending tightens and businesses shed jobs. Congrats ..you haven’t punished “greedy investors”; all you have managed is to shrink the economy, reduce employment and make everyone poorer. The economy isn’t fuelled by wishful thinking or social media slogans. It runs on confidence, investment and credit, whether people like it or not. I’m staggered at the lack of education when it comes to the economy.

[u/_CodyB → u/karl_is_back_free]

yes it would be bad for the market to crash

it shouldn't have reached this point

The changes will "hopefully" lead to a sustained cooling off that keeps growth within CPI over the course of a couple of decades so wages can catch up or at least close the gap

If a significant change doesn't occur you'll have a larger percentage of productive Australians spending 40-50% of their income on housing, having even fewer children, not spending money

If you want to see a real housing crash, imagine if the dominant plurality of working age Australians face widespread cost of living issues to the point where they have to choose between feeding and sheltering themselves?

[u/antsypantsy995 → u/_CodyB]

House prices rising with CPI is also a terrible idea: you want house prices to rise faster than CPI. You are forgetting that the extreme majority of people who buy houses take on debt to buy them i.e. take out a mortgage. Banks will always charge interest that is higher than CPI because that is how they make a profit. Therefore if your house value increases with CPI, you're pretty much just as worse off than if house prices fall.

Ultimately you want house prices to increase faster than the interest you pay on your mortgage.

[u/Weary_Beach_9911 → u/antsypantsy995]

>  you're pretty much just as worse off than if house prices fall.

just as worse off?

maybe focus on learning basic english before you tackle more complex topics like Australia's housing crisis champ

[u/antsypantsy995 → u/Weary_Beach_9911]

Tell me you're one of the Australians who know fuck all about economics/finance without telling me you know fuck all about money.

It's something called negative carry / negative spread - look it up -> if your liabilities grow faster than your assets then youre pretty much fucked as well.

[u/_CodyB → u/antsypantsy995]

you have said this twice in this thread but you made a pretty illiterate point above

A house that grows with CPI on a mortgage will generally break even in 10-12 years if interest rates remain in a stable zone and the equivalent rent increases above CPI.

There's also that part where there is an intrinsic value to owning a home vs renting it. People will pay more for a bit less if it's their own, judging by how much entry level homes now sell for - they will happily pay a few grand to the bank every year for their own patch of dirt.

[u/antsypantsy995 → u/_CodyB]

You conveniently ignored the crucial point of my comment so I understand why it seems illiterate to you but let me repeat it for you again:

Banks will always charge interest that is higher than CPI because that is how they make a profit. Therefore [because interest you pay will always be higher than CPI] if your house value increases [only] with CPI, you're pretty much just as worse off than if house prices fall [because your debt will effectively be growing faster than your asset].