28th May
“Dad still can’t work out how he got it so cheap. It’s worth almost as much today as when we bought it.” Dale Kerrigan, from cult Australian Film, The Castle
With the median Melbourne house price down 10% from its peak, many Victorians will be envious of the value held by Darryl Kerrigan’s Strathmore home. And even more envious Sydneysiders with house prices down 15% in the largest city (according to Core Logic).
In our assessment, the probability of an extended collapse in Australian residential markets has been reduced, owing to three key recent events:
- The re-election of the Australian Liberal Party (ALP) and therefore the continuation of tax concessions for investors;
- The bank regulator easing serviceability requirements;
- An easier policy stance taken by the Reserve Bank of Australia (RBA).