I get the impression that if property prices in Sydney were to fall by 20%, then the entirety of civilisation itself would come to a shuddering halt and the earth will plunge into the sun.
This great wen we call Sydney, is so obsessed with property that it has almost ceased to manufacture real products within its environs, is the measure by which society actually values people and I'm convinced that the only reason that the two daily newspapers in Sydney continue to operate is on the back of the revenues generated by people advertising houses that people are selling to each other.
The difference between Sydney and a pot of yoghurt is that after 200 years, a pot of yoghurt develops a culture. Sydney as a city refuses to and quite frankly, is more concerned about the value of the land that the pot of yoghurt is sitting on.
There are only three kinds of people who truly benefit from rising property prices.
There are people who are just about to sell their houses; rising property prices mean that they can get a higher list price without doing any real work whatsoever. Landlords like rising property prices because they can then justify rent increases without doing any real work whatsoever. The last group of people who like rising property prices are real estate agents; whose whole income cones from living inside the space between lessors and lessees and creaming their cut from the top. Real estate agents who maintain rent rolls on behalf of lessors certainly do no real work whatsoever and when it comes to buying and selling houses, they prefer to run auctions because they can cream a larger cut from the top of the sale for as little work as possible.
There's a really strange sort of irony in the fact that people who pull in more of their income from directly owning property and collecting rent, of owning part of property trusts which collect rent, are often the sorts of people who complain the loudest and longest about the government taxing them and then making transfer payments. The irony is that for most people who earn less than about 60% of AWOTE, their biggest expense is usually rents and those people are the direct recipient of those rents. There's also a rather interesting display of hypocrisy here in that rents are more likely to be paid from the proceeds of doing real work but collecting rent requires almost no real work whatsoever.
Actually in my personal experience, landlords and real estate agent are almost totally derelict in doing any real work whatsoever. I've been in a few places now where basic maintenance needs to be done and either because landlords are lazy or maybe willfully neglectful, they avoid it altogether. Even doing any real work whatsoever, is too much of a task for landlords and real estate agents but the second that tenants stop paying them for some reason, all sorts of fire, brimstone, Sheol and Hades are rained down.
The people who shouldn't care about and probably don't need to care about rising or falling property prices are those people who have laid off their mortgages and live in a house that they own outright. For them, it matter not a dot, not an iota, nor a tiddle; zero, zip, nada, nought, nothing and zilch, what the price of their house is or whether it is nominally rising or falling, except in incidental costs inllcurred as a result of council rates.
Someone who lives in their own house, doesn't pay anyone else rent; nor do they collect it. An owner occupier only really needs to bat an eyelid at the subject when they choose to move houses or at the point that they have died and their estate needs to be liquidated; at that point they can't care anyway because the grave sort of renders that difficult.
The people who would actually benefit from falling property prices are renters and people looking to buy. People who are looking to buy property, once they have settled on a property, transform into a lessor or an owner occupier. People who are renting and more than likely are doing real work to pay for that rent, unless they receive transfer payments, would very mub like to see falling property prices because this results in a pause in the amounts demanded that they should pay. I have never ever ever ever heard of rents falling as a result of falling property prices and I suspect that such a thing is like a blue swan. Such a thing may exist and it is conceivable but there's probably a greater chance of me becoming Prime Minister before that happens.
I don't think that a market correction or property prices falling by even as much as 20% is likely to be all that calamitous or even noticed by much of the general public. I don't think that falling property prices are worse than terrorism, or ISIS, or even Hitler, as much as callers to talk back radio would have us believe. The only reason that it gets so much airplay is that the people of Sydney are obsessed with property prices and the sort of people who complain the loudest and longest are those people who try do do no real work whatsoever if they can get away with it.
Aside:
Dear ISIS,
If you really want to destabilise western societies and cause as much outrage and have people complaining really loudly, why not start investing in cheap affordable housing? By buying property and undercutting the complaining classes, you'll lower rents and you'll start to lower property prices. That really will get the sort of people who ring up talk back radio angry.
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