this post was submitted on 31 Jul 2023
44 points (100.0% liked)
Australia
3613 readers
55 users here now
A place to discuss Australia and important Australian issues.
Before you post:
If you're posting anything related to:
- The Environment, post it to Aussie Environment
- Politics, post it to Australian Politics
- World News/Events, post it to World News
- A question to Australians (from outside) post it to Ask an Australian
If you're posting Australian News (not opinion or discussion pieces) post it to Australian News
Rules
This community is run under the rules of aussie.zone. In addition to those rules:
- When posting news articles use the source headline and place your commentary in a separate comment
Banner Photo
Congratulations to @[email protected] who had the most upvoted submission to our banner photo competition
Recommended and Related Communities
Be sure to check out and subscribe to our related communities on aussie.zone:
- Australian News
- World News (from an Australian Perspective)
- Australian Politics
- Aussie Environment
- Ask an Australian
- AusFinance
- Pictures
- AusLegal
- Aussie Frugal Living
- Cars (Australia)
- Coffee
- Chat
- Aussie Zone Meta
- bapcsalesaustralia
- Food Australia
- Aussie Memes
Plus other communities for sport and major cities.
https://aussie.zone/communities
Moderation
Since Kbin doesn't show Lemmy Moderators, I'll list them here. Also note that Kbin does not distinguish moderator comments.
Additionally, we have our instance admins: @[email protected] and @[email protected]
founded 1 year ago
MODERATORS
you are viewing a single comment's thread
view the rest of the comments
view the rest of the comments
It's sad, but it was obvious that interest rates were going to rise. I refinanced in 2020 with the longest fixed-rate available (and paid a penalty to do so) and dropped my amortization length by 10 years when it became painfully clear we were going to see high inflation from government policies overlapping over each other and there was a chance of the return of high interest rates as a result.
A lot of people will get burned on the way down, but it's good for society if housing is cheaper.
I just don't see a way that prices can drop without a massive increase in supply. Even if the average joe stops buying they will have to rent somewhere. There will always be investment interest or property moguls who have the money keen to buy a source of guaranteed rental income.
We're starting to see institutional money leaving housing markets.
The money comes from debt, so as debt costs increase, the profit margin of buying homes decrease. As well, as the amount of money available to a common customer drops as interest rates rise, house prices will have to drop as a function of the laws of physics and mathematics -- The only way to keep increasing prices is to keep finding people who can afford higher prices.
The fact that there are still buyers doesn't mean prices can't drop, it's about the balance of buyers and sellers, and if people are dumping their houses at a loss because they can't afford to keep paying then that'll drive prices down by increasing sellers and decreasing buyers.
It'll play out in a bunch of ways because there's a bunch of stuff out there totally reliant on sucking up debt. Real estate bubbles around the world, zombie businesses, even the rich used debt as a tax vehicle for consumption since you can take out debt without paying taxes.
I hope it doesn’t crash too hard. I just bought something on Saturday :/
I hope the whole bloody thing burns to the ground.
I’ll never afford a house :/
Typically it'd mostly just go sideways and wait for inflation to catch up.
A lot of the build to rent tax concessions seem to be trying to pull in more institutional investors. I would think that individual homeowners would be the ones more affected by interest rates.
I agree that we definitely need more supply, but there are a few things that could happen as prices increase, eg people downsizing from large places to smaller places, and people sharing accommodation.
Also, hopefully some people will sell their Air BnBs, increasing the property on the market, they'll probably become Air BnBs again, but maybe it will help with prices.
Again, more supply is needed, and rich investors will probably have a field day, but even if prices don't drop, they should at least stop sky-rocketing.