Is The Australian Property Market Primed For Growth? | July 2019 Update

https://www.youtube.com/watch?v=gpMu925UWAQ Is Australia primed for a season of growth in the Australian property market? Both Sydney and Melbourne had growth in the month of June and there are a bunch of positive change happening that may cause the market to grow: Advanced Suburb Research Course 2 Properties to Financial Freedom Strategy 0:00 - Is the Australian property market primed for growth?0:55 - Australia as a whole declined by 0.2% in the month of June2:31 - A lot of positive changes have happened over the last couple of months3:59 - Monthly sales volume may have found a flaw4:34 - Auction clearance rates are trending upwards5:00 - Some key resources I have looked at over the month6:52 - Steve Keen's thoughts on the Australian market growing in the short term10:56 - Sydney property market update13:57 - Melbourne property market update14:33 - Brisbane property market update16:12 - NSW and VIC has the highest jobs growth and lowest unemployment rates16:48 - Adelaide property market update17:41 - Perth property market update18:42 - Hobart property market update20:11 - Darwin property market update22:24 - Canberra property market update24:02 - Tight credit conditions continue to dampen the market25:02 - Australian property market update summary26:36 - Have a clear strategy for property success in this market Resources Mentioned In This Episode: My Suburb Research Course CoreLogic's National Housing Market Update | July 2019 The Australian Government Makes Investors Wealthy Over The Next 7 Years Phil Andersons Predictions For 2019, 2020 And 2021 Australia is in a Recession A Conversation With Steve Keen: Part One - The Debt Problem A Conversation With Steve Keen: Part 2 - From Central Bankers To MMT Recommended Videos: 5 Things Holding You Back From Investing in Property Australian Property Market Update - June 2019 Transcription: Ryan 0:00Hi, and welcome to my Australian property market update for July of 2019. And what I want to ask in this episode is, is Australia actually primed for a season of growth? Whether that be short term or long term growth? This is not a question that I thought I'd be asking this early in the year. Obviously, we've been seeing declines for over 18 months now. But Sydney and Melbourne actually saw some growth. And there's been a lot of changes happening in lending as well as in the government, that may be early signs that the market is primed for growth. So what we're gonna do in this episode, as we always do, is look at the data that corelogic puts out about the Australian property market, go into details in the cities and how they're going as well. And we'll also talk about some other helpful resources and helpful videos that I've watched over the month, which I'll link up down below. So looking at the nation as a whole, we can say that in the month of June, the Australian property market declined by 0.2%. Now, this was the smallest decline since back over here in March of 2018. So ever since December 2018, we've been seeing a slowing in this rate of decline, which I've been talking about. Basically, we need to see that decline needs to see it go to zero, in order to then start having positive growth and obviously, going to zero and having positive growth doesn't guarantee that that's going to continue forever. But that's a trend that we want to look for. And a trend that we are continuing to see now Sydney and Melbourne actually grew in the month of June, which is really interesting. And some other capital cities actually went backwards. And so it's interesting to see that as well. So we can see here the month a month change for the five largest capital cities. And you can see Sydney here grown by 0.1% and Melbourne growing by 0.2%. But you can also see Brisbane, Adelaide and Perth or declining in that same month. So what exactly is it that causes Sydney and Melbourne to rise when other capital cities like Brisbane, you know, it's still in the decline. So that's something that we're going to look at. so here we can see the month or month change in dwelling values for the different capital cities, we can see that Sydney and Melbourne as well as Hobart have actually increased in the month of June with Brisbane, Adelaide, Perth, Darwin in Canberra on the decrease with Darwin in Canberra, decreasing the most by 0.9%. So a lot of changes have happened over the last couple of months for us to start saying positives in Sydney and Melbourne liberal got into government, which meant the negative gearing changes that labour wanted to bring in which likely would have had a dampening effect on the market didn't come into place. We've seen a rate cut in June, we've seen another one in July, which isn't represented in this data. We've also seen some easing in the lending standards that started to come in in June as well. whereas previously, the lenders had a fixed interest rate that they were to measure people's serviceability against that interest rate is now more up to the banks. And they do have some parameters around how they do that. But that has been relaxed there. There's also speculation that in the future when it comes to lending requirements and the analysis that banks have to do on individual lenders and what their expenses are up there speculation that they that may get relaxed over time as well, making it easier for people to get money. So we've got liberal coming in. We've got drops in interest rates, we've got easier lending happening, which overall is improving sentiment and helping the market now whether or not you agree with this and whether or not I agree with this policy for the nation that is not necessarily up to us to decide. But it's up to us to look at Okay, what is happening and how can we work with this? And how can we make decisions for ourselves and our own portfolio based off this information. corelogic are also saying that in a positive sign, it looks like monthly sales, or the volume of sales of property has potentially found a flaw. And as we can see in this graph here, it looks like it has found a flaw over the last quarter or so we'll have to watch that to see that trend continues. But they're also saying that that is roughly in line with the flaws that occurred in the other market retracements. So we can see in 2011 here as well back in 2008. You can see that these are at a similar level to back then auction clearance rates are also trending upwards. Now this is something that you can look at in Sydney and Melbourne where auctions are way more popular than in other capital cities. It's not as useful in every single capital city. But as you can see, the auction clearance rates for Sydney have been on this upward trend and auction clearance rates for Melbourne have also been on an upward trend as well. So there's actually a lot of positive signs that we're starting to see now. So before we jump into the individual cities and how they're performing, I do want to highlight some key resources that I have looked at over the month. So the first two are from Ben Everingham over Pumped on Property, which is a buyer's agent that I work quite closely with. So he's done two videos, one about what the Australian government is doing to make investors wealthy. And so talking about lowering interest rates, easy credit grants, happening, changes in taxation, as well as helicopter money. So the government handing out money to stimulate the economy. So talking about all the positive indicators that are happening there. So that is something that's really interesting to watch, as well as this video where he talks about predictions for 2019 2020 and 21. Talking about Phil Anderson and his predictions, and this idea of the mid cycle slowdown that we have, if we go back here, you had the global financial crisis, which then we have a period of, you know, six to 10 years or something like that, where it goes up, and you have a mid cycle slowdown or a correction in the middle. But then the market continues to go up to when a bubbles and get silly. And then we have a massive correction. So Phil Anderson, as well as Ben here, talking about the idea that we may be in this mid cycle slowdown, rather than being right up here at the bubble point. So obviously, there's a lot of different people out there with different opinions, there's no crystal ball. But that's a really interesting one to watch there. And he does give some timelines here, so mid cycle slowdown from 2019 to 2021, then seeing the growth 21 to 24. And then seeing the bubble 24 to 26, with the correction happening sometime around 2026. So no one has a crystal ball. But that's a really interesting one to watch, and a really interesting framework to work with as well, which then leads me into this one conversation with Steve Cain. Now I interviewed Steve keen, probably three or four years ago about the Australian housing bubble and how that might crash. Steve Cain has been seen as a doomsday er, and has talked about, you know, the market correcting up to 40 or 50%. I really do like his analysis. And I like the way that he looks at things. But it was actually really interesting to watch this, because Steve Kean talks about Okay, in the near future, are we going to see prices wobble a bit? Are we going to see them grow? Or are we gonna see them decline. And so this is from an interview with Martin north. And again, I'll link up to the video down below, as well as Martin North channel, which I highly suggest you subscribe to. It's a really great channel. But I'll just play what Steve Cain says here. Steve 7:39So I think there will be a bit of a wobble because with the rates being dropped by the RBI going to panic motorist rescue, with Morrison at the helm, he will do anything he can to rescue the housing bubble. But at the moment you're trying to rescue it, when we're carrying a debt level of 120% of GDP for households.