{"id":24543,"date":"2020-04-08T16:19:34","date_gmt":"2020-04-08T04:19:34","guid":{"rendered":"https:\/\/propertynoise.co.nz\/au\/?p=24543"},"modified":"2020-04-08T16:19:38","modified_gmt":"2020-04-08T04:19:38","slug":"the-bottom-is-about-to-fall-out-the-aussie-property-market-heres-why","status":"publish","type":"post","link":"https:\/\/propertynoise.co.nz\/au\/the-bottom-is-about-to-fall-out-the-aussie-property-market-heres-why\/","title":{"rendered":"The Bottom Is about to Fall out the Aussie Property Market. Here\u2019s Why…"},"content":{"rendered":"\n

PHOTO: Australian property market<\/strong><\/p>\n\n\n\n

Well, it\u2019s been a good run I suppose.<\/p>\n\n\n\n

<\/p>\n\n\n\n

A three-decade run to be exact\u2026<\/p>\n\n\n\n

From the early 1990s up until today, the property market has been a one-way ticket to riches for most Australians.<\/p>\n\n\n\n

RELATED: A guide to the Australian property market during COVID-19 | DOMAIN<\/a><\/p>\n\n\n\n

Not even the ferocity of the GFC in 2008 could put a halt to it.<\/p>\n\n\n\n

This property price resilience was in stark contrast to the experience in the rest of the world. And it cemented the belief that Aussie house prices only ever went one way \u2014 up.<\/p>\n\n\n\n

But as this amazing chart below shows, we\u2019ve been living a distorted reality for far too long\u2026<\/p>\n\n\n\n

A warped reality<\/strong><\/h2>\n\n\n\n
\"Money<\/td><\/tr>
Source: Dallas Federal Reserve<\/em>[Click to open in a new window]<\/a><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

This chart is a powerful example of how far out of whack we\u2019ve let things get.<\/p>\n\n\n\n

Compared to the average of comparable countries, property in Australia has become increasingly unaffordable.<\/p>\n\n\n\n

Out of the 23 countries in this group, we have let the economic tether between incomes and property prices become too stretched.<\/p>\n\n\n\n

Our uniquely generous treatment of property assets in both taxation and retirement policy has played a large part in this.<\/p>\n\n\n\n

Few other countries allow negative gearing on investment properties to such an extent. And your principle residence isn\u2019t just exempt from tax, it\u2019s also exempt from any Centrelink age pension tests.<\/p>\n\n\n\n

These factors have all combined over the years to push up house prices by a far greater degree than mere rises in income.<\/p>\n\n\n\n

Though, the advent of double-income families and super-low interest rates have also played their part in pushing property values higher.<\/p>\n\n\n\n

We\u2019ve been conditioned to think this is all normal.<\/p>\n\n\n\n

\u2018House prices always go up\u2019 is what most people in Australia will tell you.<\/p>\n\n\n\n

But the truth is clear: Australia is an outlier in this.<\/p>\n\n\n\n

READ MORE VIA MONEY MORNING<\/a><\/p>\n\n\n\n

PROPERTY NOISE MENU<\/h3>\n\n\n\n