00:00The words Australian property and buyer's market are almost never uttered in the same sentence, yet here we are.
00:07You can definitely see a bit of a difference between what similar properties are achieving now to what they were
00:13achieving even nine months ago.
00:14The price guide on this three-bedroom, two-bathroom terrace in the sought-after inner-city suburb of Paddington has
00:20been reduced from $3.5 down to $3.2 million.
00:24Still, buyers are taking their time betting on further price reductions, with Australia in the grip of a rare property
00:31downturn.
00:32I've actually been having a lot of these conversations with agents who have been around for 10, 15, 20, 25
00:38years, and even then, they haven't seen a market like this.
00:43Limited supply and robust migration are helping support the market to a degree, but two other powerful factors are forcing
00:49prices down.
00:50Firstly, the government brought an end to generous tax breaks for property investors in the May budget, and around the
00:57same time, the Reserve Bank lifted rates three times in a row, crimping buyers' ability to borrow.
01:02The impact has been obvious.
01:04Cotality data showing house prices slipping in almost every state capital in the three months to July, Sydney leading the
01:11declines with 4%.
01:13Bars looks like it's going to be a quick auction.
01:15The data is supported by anecdotal evidence. This recent auction in Melbourne drawing zero bids.
01:21At $1.205, we will formally pass the property in.
01:24But what about those home buyers that bought right at the peak?
01:27In April, Jared and Donna Bruce won the keys to their new Sydney home for $1.75 million.
01:33Go on, and congratulations to you.
01:35Four months later, its value is anyone's guess.
01:38But to the proud owners, that doesn't matter, because that's not the point.
01:42I'm fine about it. So we're not going anywhere in a hurry. So this is the plan to live here
01:48long term. So that's not really affecting us.
01:52Buying a house with the intention of living in it. That sounds like how a normal housing market should function.
01:57But Australia's housing market has been far from normal for a very long time.
02:02And this has consequences. So many Australians now have so much skin in the property market that when prices fall,
02:09consumer confidence falls with them.
02:11In an environment where inflation is higher and potentially interest rates could still increase as well, I think it is
02:18playing a really big part.
02:19And that is what you're picking up in the outlook statements from a lot of companies this reporting season, is
02:24that more cautious tone, particularly around the consumer.
02:28House prices are famously known as the barbecue stopper conversation in Australia.
02:33Previously, the conversation was about how high they might go.
02:37Now it's about how hard they might fall and how wide and deep the economic impact crater might be.
02:43Paul Allen, Bloomberg, Sydney.
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02:45the 50's.
02:46West View, New York City.
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02:4670's.
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02:47And the excited about that from the Linus.
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