Loss aversion; the prices going down will be announced far more loudly than the prices going up.
I just hope that this trend continues even after:
- Investors calm down / become more certain
- Interest rates go down
I was watching a podcast that was looking at the current housing market and drew comparisons to what they thought were the closest comparisons.
Both of those dropped about 20% from their peaks.
The main difference pointed out between them and Oz is the immigration levels. Ours is much higher.
The guy put down our high immigration levels to the federal government being incentivised because our tax is slanted to salary and wages, and more immigrants means more tax. Also, the expense side for services and infrastructure hits state and local governments.
The dirty secret is that we would be in recession except for high immigration levels. Gross GDP only is growing because of immigration.
So, while NZ and Canada dropped rather quickly, we are in a different situation.
If prices drop, it’s hard to predict if it will be a bushfire or slow controlled burn.
Yeah the guys talking out his arse on immigration being so the government can have some tax. That podcaster sounds like some neoliberal low/no tax wanker.
The second part you mention about going into recession without a reasonable level of immigration is absolutely the driving reason. No government wants to be in power when a recession occurs, whether they’ve been a cause in it or not.
Edit: agree with your/their conclusion its hard to know whether its going to be a controlled burn or a bushfire. Regardless no one should’ve looked at the price inflation in housing these last few years as sustainable or bankable to lock into their budgeting and planning. Things have to change in this country, the inequality and rising precarity in people’s lives is really starting to bite. We also need to spend less money and time on so many frivolous follys that don’t have a real investment return (financial or physical) and speculation as investment.
