Alicia Barry Interview with Louis Christopher SQM Housing Boom and Bust Report

THE FOLLOWING was discussed in this interview:

“NAB chief executive Ross McEwan has also called for more action from APRA, and when you have

someone in that position to call for further tightening, generally speaking, it’s already in the planning


“Put it this way, if the Australian housing market does not slow down by mid-2022, APRA will keep intervening until it does. We cannot afford another year of 20 per cent plus gains across the national housing market.”

Key Points …

-a lot of money spinning around the economy; a lot into housing pushing up prices

-Sydney and Melbourne significantly over-valued;  the most over-valued ever seen!

.with significant risks

-the financial regulators: the RBA and APRA acted in early November

-and will step in again to avoid a hard landing in our housing market

the risks are the massive gaps between prices and income  *

-in Sydney only 15 suburbs with a median house price under $1M; extraordinarily over-valued

if this market continues to rise anor 20% in 2022; likely we will have a hard landing

-likely regulators will step in again until the evidence is there the market is slowing down

inflation at 3%;  thought to rise another half a percent  to 3.5%

-regulators to focus on investors through multiple steps

-with house prices out of control it will force a hard landing that affects the rest of the economy

.expect regulators will target the rate of growth

.less owner buyers in the market

FHBs not seen since mid year

investors now taking up the larger proportion of the buying activity

a typical phenomenon we see towards the end of a housing cycle

2022 expect an increase in demand for units; because they are more affordable

-international borders opening to overseas students and migrants who traditionally invest in units

-with lockdowns assumed to be over many will return to the big cities from the regions seeking more amenity in the cities

-6 to 8 months after the downturn started a good call for FHBs

-SQM not in a position to tell people when they should buy their home

-belief that the market will soften next year; not going to crash

-that the regulators will stop the crash if they can

CAAN: Sadly with our borders opening up for migrants and international students this will increase competition once again for Australian home buyers! And in the jobs market maintaining low wages!