Residential property – what lies ahead?
The script gaining popularity this year is that Australia’s housing bust is finally coming. From 2013 to 2017 foreign buyers and local investors pushed up prices to levels that were unaffordable for local owner occupiers but very profitable for developers, spurring on supply which only now is hitting the market. Government policy meanwhile has put the screws on foreigners and investors, meaning there is a long way to fall before new buyers step up. A Labor government potentially banning negative gearing outside of new developments suggests further downward price pressure.
This script has a lot going for it, but many people have been calling the death of Australian property since 2009.
In our six page Australian Housing Review, Pendal Portfolio Manager Tim Hext takes a dispassionate look at the underlying data and potential tax changes to draw conclusions on the prospects for residential property prices.