Louis Christopher

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Underquoting is a hugely tricky topic for many in property, with the “quote [or price] it low, watch it go” mantra said to be the modus operandi of many in the real estate selling business, especially when it comes to auction sales.
Recently, <a href="/news/29454-online-petition-for-mandatory-reserve-price-publishing-launched" target="_blank">EPS Property Search’s Patrick Bright began a petition against underquoting</a>, and encouraging the consideration of early publishing of the reserve price for properties heading to auction. Property Observer covered this petition upon its launch, and <a href="/news/29129-should-reserve-prices-be-published-for-auctions" target="_blank">discussed it with him prior to its inception</a>.
<blockquote>
SQM Research’s Louis Christopher has also expressed his dislike of the practice of underquoting and is vocally backing Bright’s petition.
</blockquote>
Property Observer recently attended an auction in Sydney where <a href="finding/29729-agent-underquoting-will-not-always-help-buyers-get-the-price-they-want" target="_blank">there was around a $200,000 discrepancy between reserve price and the price guide</a> provided by the real estate agent. The property sold at auction just above the reserve, and we have clear reason to believe that the vendors would never have considered an offer around the price guide provided. Certainly, there may have been buyers that were unable to afford this price and that may have spent money on inspections and conveyancing to prepare for the auction, let alone time. As a buyer's agent, Bright says that this is all too common and that he sees underquoting at the majority of auctions he attends.
SQM Research’s Louis Christopher has also expressed his dislike of the practice of underquoting and is vocally backing Bright’s petition.
"I am personally sick to death of underquoting in real estate.  It wastes time, money and breaks people’s hearts once they know they have been deceived. Ultimately it is damaging to the property sector and all those who participate in it,” said Christopher in his recent newsletter.
"One thing Patrick and I share in common is that we have a very strong belief in property market transparency and ensuring people don’t get ripped off in property transactions. Recently, Patrick has gone so far as to get a petition going to make it compulsory to advertise auction reserve prices to stamp out underquoting and dummy bidding,” he said, noting he 100% agrees with the objective, urging others to <a href="https://www.change.org/petitions/the-honourable-stuart-ayres-mp-nsw-government-make-it-compulsory-to-advertise-auction-reserve-prices-to-stamp-out-underquoting-and-dummy-bidding%20%20" target="_blank">sign the petition</a>.
However, Christopher also expressed his dislike at media ignoring the petition.
"Sadly, I can tell you now there are some dark forces out there who don’t want to see this happen. Indeed, Patrick has recently told me of some media outlets who won’t give this petition coverage, even after promises they would! No doubt they are worried they may lose advertising dollars due to these dark forces,” he wrote.
He said he had a message for those outlets: "Please show a bit of spine on this issue and give it the coverage it deserves.”
He told Property Observer that despite the pain some interests may feel in the short term, price transparency will create overall benefits across the market, and it should be given a run and prominence.
Recently, mainstream media outlets went gangbusters writing about Queensland’s potential change to ban price guides from auctions – something<a href="/news/qld/29009-queensland-auction-price-guide-ban-defies-common-sense-john-mcgrath" target="_blank"> Property Observer also wrote about</a> – and he noted that it is startling to see the contrast between some experts’ exposure and others.
"[Underquoting] does come out in a rising market,” Christopher explained. “Markets can move quickly, but what Patrick has put forward is that the reserve price isn’t provided until a week out.”
Discussing the Queensland potential price guide ban, he noted that he sat on the fence, saying there were many pros and cons. However, he noted that no guide is better than a phoney guide.
<blockquote>
"They’re big businesses protecting their bottom line, and it’s completely their right to do that,” Bright said.
</blockquote>
While neither would disclose which media outlets said they would cover the petition and since changed their minds, Property Observer notes that online there have been stories from Australian Property Investor magazine. Patrick Bright confirmed that API had been in support of sharing news of the petition.
Bright said that he doesn’t want to criticise individuals as he is sure there are powers above them calling the shots.
"They’re big businesses protecting their bottom line, and it’s completely their right to do that,” he said.
He also said that he is getting a lot of support when he personally speaks to sales agents, but finds that many are concerned of ridicule from their peers if they support the petition.
Disclosure: Jennifer Duke has signed the petition for reserve prices to be published, as well as <a href="/news/qld/29277-queensland-auction-price-guides-the-more-info-the-better" target="_blank">a petition opposing the Queensland price guide ban</a>.
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jduke-EHk3XBmHkn

Louis Christopher and Patrick Bright say media outlets are ignoring underquoting petition

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Can anyone explain the absence of rental growth in our major markets?
Are we not suffering from a housing shortage crisis, with an accumulated undersupply of hundreds of thousands of dwellings?
Can the economists who speak constantly of this dwelling shortage explain how three of our eight capital cities recorded declines in house rentals in the March quarter, while four others recorded no growth?
Can the Housing Industry Association, the great champion of the shortage theory, explain why four of the capital cities recorded marked declines in apartment rentals, while two others recorded no change?
Do the laws of supply and demand no longer apply to residential property, such that Perth, Canberra and Hobart now have house rentals lower than a year ago (6% lower, in the case of the national capital), Sydney and Darwin have recorded zero growth, and only one city has recorded annual growth of more than 3%.
<blockquote>
The only capital city experiencing a boom worthy of the name is Sydney – which was overdue after a decade of under-performance.
</blockquote>
Out of eight capital city house markets and eight apartment markets, there is only one instance of solid annual growth in median asking rents – a 7% rise in Darwin’s apartment market.
Otherwise, according to the March Quarter Rental Report from Australian Property Monitors, it’s a story of stagnation or decline in residential rents in the capital cities.
This result, which is similar to the outcomes with rental reports from previous quarters stretching back to 2012, runs counter to the notion of shortages.
It’s also inconsistent with the idea of a national property boom, with markets rising as “a blistering pace”, as the ABC’s News 24 morning program misinformed us recently.
And speaking of research evidence that makes nonsense of claims about market performance, I continue to disbelieve the notion of a booming Melbourne market and I note similar sentiments expressed by SQM Research managing director Louis Christopher this week.
Christopher’s research on the number of residential properties listed for sale in each of the capital cities shows there are exceptionally high levels of supply available in Melbourne.
Melbourne currently has about 44,500 residential properties listed for sale. To put that into perspective, Sydney has only 24,200 properties listed.
This can be explained, partly at least, by the extraordinarily high levels of inner city apartments being marketed.
Christopher writes, “There are no new trends that have come out of the data this month - other than we note that Melbourne still has an elevated amount of listings in the market and so this has made us sceptical of recently-reported large increases in dwelling prices for that city.
“There is also further evidence that Melbourne vendors overall have struggled to lift their asking prices.”
Notions that the Melbourne market is rising strongly have been created by rubbery figures from the Real Estate Institute of Victoria and the rude haste with which RP Data spits out statistics under the “publish and be damned” principle.
In my view, the only capital city experiencing a boom worthy of the name is Sydney – which was overdue after a decade of under-performance.
You can contact Terry via <a href="https://mailto:ryder@hotspotting.com.au" target="_blank">email</a> or on <a href="https://www.twitter.com/hotspotting" target="_blank">Twitter</a>. 
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terryryder-YECXbqmri2

If the market's so hot then where's the rental growth?

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SQM Research has recorded flat asking prices and rising stock levels across the country for the first quarter of 2014.
According to the research firm’s latest figures, the capital city average house asking price fell 1.6% over the March quarter, while unit prices stayed flat. Sydney asking prices for houses dipped by the same 1.6%, with units rising by just 0.2%, a result that may surprise some given the bullish outlook many commentators had for the city at the beginning of the year.
Adelaide was the quarter’s strongest capital city market, with house asking prices increasing by 0.9% and units climbing by 3.5%.
SQM Research managing director Louis Christopher noted that SQM’s findings for the quarter differ from those provided by RPData.
“This is all in contrast to the very bullish findings from the RP Data daily index, which among other things, reported a very sharp rise in Melbourne dwelling prices of 5% for the quarter and now has Sydney up over 15% for the year,” said Christopher.
“While that index may be meeting our forecasts this year of 15-20% rises for Sydney, SQM Research continues to remain dubious of it and strongly recommends for you to follow the ABS and APM versions of house price sold data, which will be reporting early next month based on a lot more sold data for the quarter gone by.”
The firm also reports a rise in stock on market for March, with a 1.8% increase over the month to 352,369 dwellings.
However, the national stock level was down 5.2% on a year-to-year basis, with Sydney’s stock on market down 17% from March 2013.
Darwin recorded the highest jump in stock on market from the previous year, with listed dwellings rising 12.8% from 1,221 in March 2013 to 1,335 last month. SQM Research noted that stock on market levels are particularly vulnerable to seasonal influence, making monthly fluctuations a less useful indicator of market conditions than year on year analysis.
The research company expects a fall in listings over the Easter holiday period.
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jrichardson-uRX5hFdKfN

Asking prices flat for March quarter: SQM Research

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Guest OBSERVATION
It might sound quite bizarre discussing areas that have not been good to existing property owners in Sydney. The general consensus is that all areas have done very well in the Sydney property boom.
That however is not the reality.
The facts are there have been large regions in the Sydney housing market that have significantly underperformed compared to the average Sydney-wide recovery that has taken place since late 2012. 
I have picked three full regions showing clear evidence of underperformance against the wider Sydney average. That doesn't mean prices have not risen in these areas. All areas have risen but some have done a lot worse for their property owners and put them behind the rest of the pack.
Here are three of the worst:
Sydney's Northern Beaches
<ul>
<li>Sydney total house price change in last three years: 23.1%</li>
<li>Northern Beaches' total house price change in last three years: 17.5%</li>
</ul>
Effectively, anything north of Manly and the further up the beaches you go, the flatter the recovery it’s been.
Suburbs such as <a href="https://www.urban.com.au/property-observer" target="_blank">Curl Curl</a>, <a href="https://www.urban.com.au/property-observer" target="_blank">Newport</a>, <a href="https://www.urban.com.au/property-observer" target="_blank">Bayview</a>, <a href="https://www.urban.com.au/property-observer" target="_blank">Avalon </a>and others have all been rising below the average. It’s a strange turn of events in that in much of the 1990s the Northern Beaches was almost the leader of the pack. So why is this happening?
Of course, many residents love the northern beaches. Many locals deem it “God’s country” and truly, the region does have some of the best beaches in the world.
That’s great for living but the real problem lies in the infrastructure. When it can take up to and hour and a half to drive to work that is just too much for most people. There has not been a major piece of decent road infrastructure for decades and yet the population has continued to build up.
Each morning those taking either the Pittwater Road or Wakehurst Parkway know exactly what I am talking about. Until such time there are underpasses, tunnels and a fix for the spit bridge (which should ultimately be a second harbour tunnel) this area is likely to underperform for the long-term.
Let’s not even talk about the rail line for there isn't one and we are unlikely to see one in our lifetimes!
Article continues on the next page. Please click below.
<hr class="system-pagebreak">
The Lower North Shore
<ul>
<li>The Lower North Shore total house price change in the last three years: -8.5%</li>
</ul>
One of the most affluent regions in Sydney and generally has not been the best property performer for its existing owners. Over the course of the last three years, prices have actually fallen. 
Now to be fair the falls took place over the course of 2011 where this market fell by over 15%. But even in the recovery period, the market has not done much. 
I put this down to many areas in the lower North Shore being too expensive. When house prices get above $2 million, the number of buyers that can afford such prices narrow up very quickly and investors (which this overall recovery has been driven upon), are virtually non-existent.  
I've seen this in other areas around Sydney in that real estate priced above the $2 million market has been underperforming. <a href="https://www.urban.com.au/property-observer" target="_blank">Strathfield </a>comes to mind as one example where, in a sea of surging prices, that suburb has seen underperformance for properties prices over $2 million.  
The reality is the majority of free standing homes in the lower north shore are priced at or above the $2 million mark and this is the primary reason why this region has seriously underperformed.
Eastern Suburbs
<ul>
<li>Easters suburbs' total house price change in the last three years: 9.5%</li>
</ul>
Similar to the Lower North Shore, the market corrected back in 2011 by over 20%, and similar to the North Shore and other locations, it was the prestige end of the market that fell the most in that period and has underperformed the most in the current upswing.
Yes, property investors who have purchase or hold real estate valued under $2 million have experienced very good performance in line and above the Sydney wide average.
The one clear trend in all this is that anything where buyers are having to folk out $2 million plus for a house is largely being rejected. Quite simply it’s just too much debt, plus investors do not like to operate at these levels. Prestige property is simply not an efficient investment at these levels. Stamp duty is higher proportionately and in absolute terms; land tax is in play and also rises proportionately the higher the land value; rental yields tend to be lower and vacancy rates tend to be higher.
I also believe most Sydney families are still seeking a house with a backyard for the kids and quite frankly most prices for free standing homes in the inner ring are way out of the reach for most families including upper income earners and its been that way for a long time now. Instead families are looking to the middle ring and outer rings of Sydney and strangely that is where the price gains have been the greatest.
Consider the following charts for the Upper North Shore, Sydney’s West and Liverpool (click charts to open in new window). <a href="https://sqmresearch.us5.list-manage.com/track/click?u=9badbd870addb4af72206c2eb&amp;id=04eebca90b&amp;e=0aab96dc54"></a>
<a href="/images/2014/10/22/sqm-oct-22-one.jpg" target="_blank"><img src="/images/2014/10/22/sqm-oct-22-one.jpg" alt=""></a>
<a href="/images/2014/10/22/sqm-oct-22-two.jpg"><img src="/images/2014/10/22/sqm-oct-22-two.jpg" alt=""></a>
<a href="/images/2014/10/22/sqm-oct-22-three.jpg" target="_blank"><img src="/images/2014/10/22/sqm-oct-22-three.jpg" alt=""></a>
It is no coincidence here that we have seen transport and infrastructure improvements in three of these regions, plus real estate is more affordable.
The interesting part in all this is that the price gap between affluent and affordable real estate in Sydney has narrowed up.  There is no question about this.
I think too that for those who do have budgets up to $1.7 to $1.9 million, they should consider taking a look at the real estate that is just above the $2 million mark, for there may well be some large quality differences for not that much just a few extra purse strings. 
Louis Christopher is the director and founder of independent property advisory and forecasting research house <a href="https://www.sqmresearch.com.au/" target="_blank">SQM Research</a>.
SQM Research provides property related advice, research and data to financial institutions, property developers and real estate investors.
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louischristopher-TWpYcZDLBK

Not all Sydney areas are booming: The city's three worst performing regions

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Australia’s housing market will likely record moderate dwelling price rises in 2018, which will beat a slower rate than the price gains in 2017, led by a slowdown in Sydney, according to SQM housing expert Louis Christopher in his new report. 
SQM Research’s base case forecast is for capital city dwelling prices to rise between 4% to 8% in 2018, which would represent a fall from a growth rate of approximately 8.5% over the past 12 months to 30 September 2017. 
The rate of property price increases will be slower in 2018, predominantly due to a slowdown in the Sydney housing market, which should continue into the first half of the year. Melbourne’s property market will also lose some momentum, however, this will only be a relatively modest slowdown, according to predictions in Christopher’s Housing Boom and Bust Report. 
“Offsetting a slowdown in Melbourne and Sydney will be first-year property market recoveries for Perth and Darwin and an ongoing real estate boom in Hobart’s property market, which is set to record the highest level of accelerated price growth of any capital city next year at between 8% to 13%,” Christopher said.
Click here <a href="https://www.propertyobserver.com.au/images/2017/10/18/Crash1.jpg" target="_blank">to enlarge</a>.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/10/18/Crash1.jpg" alt="">
Brisbane’s property market will experience slightly stronger gains than those posted in 2017, with property prices forecast to rise between 3% to 7%. However, the persistent overhang of surplus property listings will hold back property in that city from a faster rate of inflation. 
The base case for all capital cities forecasts assumes no changes in interest rates next year, a stable exchange rate and the existing restrictions by APRA on investment lending to remain in place. 
“Through the actions of APRA earlier this year, a possible deeper housing correction in Sydney and Melbourne has been averted, for now. Accelerated population growth rates in Melbourne and Sydney have enabled the cities to avoid severe property downturns. On the flipside, housing affordability will likely continue to deteriorate in 2018 with growth in property prices still outpacing wages growth,” said Christopher. 
“The authorities were right to take action earlier this year to restrict investing lending by banks. Failure to have taken action would have resulted in out-of-control Sydney and Melbourne housing markets, where additional aggressive monetary policy may well have triggered a large fall in dwelling prices in 2018,” said Christopher.
“APRA’s action, which came earlier than I had expected, has meant that the Sydney housing market is cooling sooner than expected. That has meant our Sydney forecast for this year of price growth of 11% to 16% will not be reached and a more moderate 6% to 8% increase in prices can be anticipated for 2017.
“Our Sydney forecast for 2018 is for a 4% to 8% increase in prices whereby Sydney will record a soft market in the first half of the year, but property prices will start to recover in the second half as the banks will likely increase investment lending once again. There have been reports of banks investment lending ratios being under the maximum thresholds allowed, so we can expect a rise next year as banks increase investment lending up to this limit.” 
“Hobart’s property market is expected to remain the fastest growing city in 2018, with the combination of a fast economy and housing supply shortages likely to ensure the second year running of double digit price rises for that city,” Christopher said. 
Christopher’s Housing Boom and Bust Report this year also has a full breakdown of every postcode in the country covering current market statistics and its postcode investor ratings. The full report can be found on <a href="https://www.sqmresearch.com.au" target="_blank">www.sqmresearch.com.au</a> for $69.95.
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jonathanchancellor-7SQnKwU6yx

No Sydney housing crash in 2018, but we will see a slowdown: SQM's Louis Christopher

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SQM Research has calculated the national residential vacancy rate was 2.1% in October, with the number of vacancies Australia-wide falling to 67,781.
It was a slight drop on September.
Hobart's vacancy rate fell to a record low of 0.3%, the lowest since SQM started recording data in 2005. 
In Adelaide, the vacancy rate dropped to 1.4% from 1.6% in September and down from 2% a year earlier.
In Canberra, the vacancy rate dropped to 0.8% from 1.0% in September.
In the bigger cities, vacancies fell in Sydney to 12,435 in October, down from 13,114 in September, giving a vacancy rate of 1.9%, down from 2.1% the previous month.  In Melbourne, the vacancy rate fell to 1.8% with 9,390 rental properties available.
Click <a href="https://gallery.mailchimp.com/9badbd870addb4af72206c2eb/images/298d5ea0-09c4-42e3-8c4b-21e4e5134c6a.png" target="_blank">here to enlarge</a>.
<img src="https://gallery.mailchimp.com/9badbd870addb4af72206c2eb/images/298d5ea0-09c4-42e3-8c4b-21e4e5134c6a.png" width="620" height="114">
Elsewhere, the vacancy dropped in Perth to 4.1% from 4.5% in October, but is still the highest of any capital city. 
Darwin’s vacancy rate fell from 2.7% to 2.5% over the month.
The vacancy numbers highlighted tighter rental markets in many capital cities.
"We’ve seen big falls in Perth and Adelaide and even Brisbane appears to be recording a slight trend downwards right now," SQM's Louis Christopher said.
"However, we expect vacancies to rise in November and December due to seasonality such as students finishing up their semester and heading home, which may take some pressure off rents."
In Hobart, the shortage of rental accommodation is the most severe, with just 75 properties available for rent in October, prompting a record low vacancy rate of 0.3% and higher asking rents, especially for units which were up 7.9% over the month to 12 November.
Capital city asking rents over the month to 12 November fell 0.4% to $548 a week for houses. Unit asking rents rose 0.2% to $439 a week. Asking house rents jumped the most in Canberra by 2.6% over the month while asking rents for units jumped the most in Hobart by 7.9%. 
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Residential vacancy rate dips in October: SQM Research

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EXPERT OBSERVER
I was disappointed and unhappy with how the 60 Minutes segment Bricks and Slaughter, which aired on Sunday and sensationalised the country’s property downturn. The interview I conducted with the 60 Minutes team spanned approximately 45 minutes, of which approximately one minute was featured in the segment.  I stated in my interview with 60 Minutes the risks as well as the safety valves that are still present in the property market, including strong local economies, strong population growth, banks very unlikely to fail, the RBA and/or the Federal Government likely intervening in the property market should the market quickly deteriorate. The program covered my comments on the risks and overvaluation only, which distorted my views. During the interview, I actually covered the following:
<ul>
<li>A city-by-city state of the market. Which capital city markets are strong. Which are not.</li>
<li>The magnitude of overvaluation of Sydney and Melbourne and how the markets got to that point.</li>
<li>The weakening rental market in Sydney.</li>
<li>How many distressed properties there were in Sydney and where they are located.</li>
<li>How the market is vulnerable to further price falls if any adverse factors came along.</li>
<li>The banks potentially holding back information on the health of the market.  </li>
<li>The rapid growth of the non-bank financial sector.</li>
</ul>
  Crash unlikely Overall, I think a full blown housing crash scenario playing out is unlikely. What is far more likely is that Sydney and Melbourne will record further ongoing price declines, followed by a lengthy period of price stagnation. The magnitude of those price declines still depends upon future events that have yet to unfold, if they do at all. A housing crash in Sydney and Melbourne is unlikely for the following reasons:
<ul>
<li>Our various government bodies have the capacity and the will to intervene if such a scenario were to become apparent. They can cut interest rates. They can introduce a first home owner grant. They can introduce quantitative easing. They can loosen recent regulatory requirements on the banking sector. There are precedents for all these actions.</li>
<li>Leading indicators such as auction clearance rates, housing finance approvals, rental vacancy rates, credit growth rates, while not always perfect in their forecasting abilities, are suggesting this will be a correction that will be material but not calamitous. SQM Research continues to monitor these indicators closely for further deterioration.</li>
<li>The economy is healthy and has shown itself to be somewhat resilient when past housing downturns have come and gone.</li>
<li>Population growth rates are still very strong, if not excessive.</li>
<li>
The mining downturn has come to an end and the mining sector is now creating positive input into the economy.
</li>
<li>
While it has become tougher to qualify for a home loans, the banks are still lending and conservatively competing for borrowers within the APRA boundaries set.
</li>
</ul>
This all said, a housing crash, however unlikely, is not an impossible scenario. A string of events couldmaterialise that could translate to peak to trough declines in our two largest cities of greater than 20%.  Such events could include:
<ul>
<li>A significant additional contraction in the supply of housing credit brought upon by perhaps a second global financial crisis.</li>
<li>
A deep domestic recession triggering sharply rising unemployment which would have flow on effects into housing in the form of lower demand and rapidly rising defaults thereby creating a cascading effect of bank forced sales.
</li>
<li>A nationwide oversupply of new real estate brought upon by either too much speculative property investment combined with rapid cuts in population growth rates.</li>
<li>A rapid cut in population growth rates.</li>
<li>A rapid and significant rise in lending rates.</li>
<li>A lengthy series of other miscalculated policy action.</li>
</ul>
There is also the possibility of an adverse feedback loop whereby the housing market commences a correction which triggers a domestic recession. Such a recession could easily feedback into the housing correction, turning it into a crash. I am watchful of this scenario but I do believe governments would intervene to prevent this possibility. I note some recent mixed signals in the economy via weakening retails sales data and new car sales data but other sectors of the economy remain robust including ongoing strong jobs creation. Overvaluation still present The Sydney and Melbourne housing markets though, despite the recent falls, remain excessively overvalued and in our opinion vulnerable to future negative adverse events. These events, while perhaps may not be strong enough to create a precipitous crash, may still create larger price falls than currently recorded.  These events could include:
<ul>
<li>The banks, out of step with the RBA, lift lending rates once again.</li>
<li>The repeal of negative gearing which is the Labor Party’s current policy.</li>
</ul>
<img src="https://gallery.mailchimp.com/9badbd870addb4af72206c2eb/images/43f1ddc7-57bb-4e87-a681-2468410b5979.jpg" width="550" height="338"> <img src="https://gallery.mailchimp.com/9badbd870addb4af72206c2eb/images/a65c3eb1-9d45-435f-a3c4-0267f23c5ac4.jpg" width="550" height="361"> SQM Research measures relative housing market valuation by studying dwelling price changes to changes in nominal GDP, which is a good measure of a nation’s total income. We have found there is a relationship between the two where in the past, excessive dwelling price growth over nominal GDP growth has eventually unwound. The charts presented illustrate the relationship as well as where Sydney and Melbourne currently sit. The red lines effectively represent the excess (in other words overvaluation) over and above of dwelling prices to nominal GDP while the green represents a discount (undervaluation). The charts clearly illustrate that both Sydney and Melbourne are excessively overvalued. Indeed, on our numbers, Melbourne has never been more overvalued since the data began in the mid-1980s.  Our forecasts for 2019 will hopefully be released by November via the 2019 Housing Boom and Bust Report. I do note that the current downturn has parallels with the one incurred by Sydney between 2003 to 2006. During that downturn, prices fell by 9.6% from peak to trough. The magnitude of overvaluation was similar to what we are experiencing now (indeed it was slightly worse on our numbers). The magnitude of oversupply that was in the Sydney market at the time is also similar to now. Finally, banks also took some steps to restrict lending to new apartments in the Sydney inner-city market. The levels of lending restrictions now are greater than at that point in time. So the current thinking is that this current downturn will be at least on par with the 2003 to 2006 downturn. And given the price falls to date (down 6.5% for Sydney) the market will likely have a larger fall. How much more, we are very unsure at this stage as the final result will be driven by events (some of those mentioned above) that have yet to pass. As per previous years, the Housing Boom and Bust Report will provide further evidence backed details surrounding our forecasts. Overall the point of the exercise for me featuring on 60 Minutes was to note that any additional adverse events or adverse policy action could trigger a deeper correction which may have consequences for the economy overall. The property market is vulnerable right now and will remain that way until we see valuations return to more normal levels.   Unfortunately, the segment was sensationalist to say the least and so going forward, I have decided to only work with trusted reporters and to heavily rely on our newsletter to put forward any messages.
Louis Christopher is the <a href="http://sqmresearch.com.au/about-us.php" target="_blank">managing director at SQM Research.</a>
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jrobinson-rf4aSBido9

SQM's Louis Christopher disappointed with 60 Minutes Bricks and Slaughter editing 

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EXPERT OBSERVER
Massive though it is, the property market isn’t a monolith – it’s a seething mass of individuals all trying to make their mark and make money from one of the most talked about assets there is.  
And whether you want to get into the property market, hate the property market or are already up to your neck in it, you’ll know that any notable movement in the market can cause a major shakeout and affect the rest of the economy.
As part of the annual Boom &amp; Bust Report for 2019, SQM Research will present a list of the real movers and shakers in the Australian housing market. 
These Top Ten people listed can impact either the demand for or supply of property or direction and sentiment in the market.  
These are the people we at SQM listen very closely to.
These influential individuals who have moved housing prices in 2018 and may well move them again in 2019 are listed below.  In our 2019 Boom &amp; Bust Report we will cover off what they could do next and how it will impact the property market. 
The Top Ten List:
10. Mark Steinert - Stockland CEO
9. Bill Shorten - Opposition Leader
8. Daniel Andrews- Premier of Victoria
7. Gladys Berejiklian - Premier of NSW
6. Donald Trump - US President
5. Scott Morrison - Prime Minister
4. Brian Hartzer - Westpac Bank CEO
3. Matt Comyn - Commonwealth Bank Australia CEO
2. Wayne Byres - APRA Chairman
1. Dr Philip Lowe - Reserve Bank of Australia
Louis Christopher is the <a href="http://sqmresearch.com.au/about-us.php" target="_blank">managing director at SQM Research.</a>
 
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j.ballantyne1990-6AQqhLzZaK

The 10 people most likely to shape property prices: Louis Christopher

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SQM's Louis Christopher has forecast dwelling prices across Sydney are likely to fall 6 percent to 9 percent during 2019. 
It will happen for the most part in the first half of the year, he suggests.
"There is a chance we may well see a bottoming out but that is dependent on a number of events which have not yet unfolded, for example we may see the RBA intervene in the market," he told a <a href="http://harrispartners.com.au/resources/videos" target="_blank">Harris Partners podcast</a>.
"It's looking increasingly likely that this will be a 15%-20% peak to trough decline."
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Christopher described the inner west as a market "correctly fairly fiercely" because the market was overvalued.
"I think we will still see some fairly rapid falls," he said.
Christopher noted the ongoing crosschecking of loan applicants incomes and expenses.
"That will result in a number of potential buyers having less borrowing power.
"I fear there may be a second credit crunch playing out in 2019.
"If the RBA come to the view that these price drops could lead to an economic recession, it is likely they will cut rates to put a floor in the market place."
Louis Christopher is the <a href="http://sqmresearch.com.au/about-us.php" target="_blank">managing director at SQM Research.</a> 
 
 
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Louis Christopher

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