Opinion
While I was wistfully selling off my child’s bassinet on Facebook Marketplace, a potential buyer simply sent me a link to someone selling the same item at a lower price. It’s a pretty good tactic, I admit, but I’m so stubborn it made me want to have a third child just to hold on to the bassinet and get my money’s worth.
No one likes to see an asset fall in value … except all the people wanting to buy that asset. So with all the angst around the recent dip in property prices – not least from real estate agents lamenting the buyers’ market – I need to share my optimism. Before the changes to negative gearing, Millennials like myself felt home ownership was only possible if you had access to the bank of mum and dad. It appeared Australia was becoming an inheritocracy – where hard work and diligent saving meant naught unless you had parental guarantors. It really makes you feel for the parents who have to wonder if their kids visit them for quality time or just to ensure they get enough for a down payment on a townhouse in Sunshine.
I’m feeling positive about this modest fall in property values. It gives me a little ray of hope that I might actually be able to raise my kids in a house of our own – that way when my toddlers use Blu-Tack to stick their drawings on the wall, I don’t have to fret about whether I’ll get my bond back. Heck, I might even be relaxed enough to one day hang a framed photo on the wall.
If house prices stabilise over the next two or three decades – that means prices sometimes go down, instead of endless growth – then my kids might even be one day able to afford their own homes. It’s nice to dream of a stable life for my kids, one where my wife and I can spend their inheritance on needless renovations.
And look, I’d be remiss to minimise the pain of individuals who bought property as an investment and are concerned they made the wrong call. Though I do wonder just how much pain a 5 per cent drop in value has really caused? Property owners still have an appreciating asset – unless they’re desperate to flip it within the next few months – and can sit pretty while the market continues to grow long term.
Given the rollercoaster of emotions this economy is already bringing, it’s a good thing that I’m used to dealing with big feelings. My three-year-old recently cried like I’d ruined his life by only giving him three scoops of ice cream instead of four, saying he “really, really” wanted more. Being the sensitive new-aged dad that I am, I acknowledged his feelings and avoided saying anything callous like “you’re lucky you even got ice-cream at all”.
I’m trying to have a similar empathy for real estate agents freaking out about falling house prices. They’ve been eating buckets of proverbial ice-cream for decades and now they’ll only be able to make a decent living. Until the entire investment market falls into cataclysmic negative equity, I’ll just acknowledge their feelings and do my absolute best not to tell them that they should be happy they even got ice-cream.
There’s also been some talk of property owners falling into “negative equity”. This is when the value of the house falls below what you currently owe on it. That would suck, though it seems to be an extremely rare occurrence at this point. While this situation primarily affects first time home buyers who have put down small deposits of say 5 per cent, it’s worth noting that if you’re living in the house without an urgent need to sell, then it won’t bother you.
If you have an extensive property portfolio, you have plenty of time to sell up before your loan is more than the value of your houses. And if you plan to sell, please let a few of us millennials know so we can chuck in a bid and maybe get a fair price on our first home. I’ll happily live with negative equity if it means I get to repaint the vomit-yellow bathroom without begging for approval from my landlord.
Like many of you, I’ll be keeping an eye on the property market over the next year. If we continue to hear language such as a “fall” or a “drop” in housing prices, then I’m sure it’s a normal market correction. If I see headlines saying the market is “crumbling” or in “freefall”, then I’ll start to worry – but then again, I wouldn’t mind picking up a house in Kensington for a couple of bucks.
Simon Taylor is a Melbourne-based comedian.
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