Just how far will property prices fall?
For the last two years, we were feeling rather lonely suggesting that the property boom would end abruptly. Today, property prices are falling, and we are no longer a lone voice. The question is: how much further will they fall?
Roger Montgomery is the Founder and Chairman of Montgomery Investment Management. Roger has over three decades of experience in funds management and related activities, including equities analysis, equity and derivatives strategy, trading and stockbroking. Prior to establishing Montgomery, Roger held positions at Ord Minnett Jardine Fleming, BT (Australia) Limited and Merrill Lynch.
This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.
Brett Edgerton
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Fascinating insights, Roger.
I would add one more important piece to the puzzle. In between the layer of good credits being encouraged to switch to P&I with large discounts, and the weak credits that may continue to access interest-only borrowing, lies the “near prime” borrowers being heavily encouraged (by higher rates and in some cases by direct contact in writing) to switch to non-traditional (shadow) lenders being funded through parcelling up of residential mortgage-backed securities sold to investors.
It’s all a fraught game of pass the parcel at present.
No wonder the Australian economic “elite” in Australia have had no time for much needed microeconomic reform – that parcel has gotten mighty heavy and even more toxic!