The debate

I understand the frustration, but equally, I understand the conundrum. ‘Conundrum’ isn’t really the right word to reflect the economic, emotional, and social impact that is the complexity around housing affordability. It’s a huge issue that rightly should be debated in an election campaign but I’m afraid it’s naïve to expect consensus.

Don’t worry, I’m not going to get into the politics of property access and ownership. I’ll leave that to others but what I will talk about are the practicalities.

First. Always remember there are no guarantees. Whilst COVID has forced us to recognise that life can deliver extraordinary curveballs it’s been easy to ignore the fact that reality also applies to residential property. Values have remained resilient while much of the rest of the economy has COVID imploded, but that doesn’t mean growth is guaranteed.

I do think we’ll continue to see growth ease in response to the changing economic and inflationary dynamic, but the context of any easing is important. Double-digit growth per quarter for consecutive quarters was extraordinary. Single-digit growth is still great. Negative growth isn’t quite so glamorous, but it will take a significant chunk of months to neutralise the enormous value gains already delivered. So, we are doing okay.

Second. There is no quick fix. Housing isn’t going to become more affordable overnight. Obviously, that’s good news for those already in the market who want to protect the value of their investment, but not such good news for those hoping to get in.

Yes, market sentiment can change quickly in response to even the flimsiest of factual analysis or assumption. Yes, predictions of waning confidence in the ability to achieve value growth will dampen potential buyer determination but it won’t smother demand completely. Homebuyers will still be looking to enter the market, albeit with more caution, and the very conditions of waning demand will entice investors back.

Meanwhile, the structural change required to meet housing supply whilst maintaining investment security is a pathway harder to navigate than an Olympic mogul course in a blizzard with a blindfold on. That is to say, it’s very tough and certainly, I would never expect a magic solution that finds the perfect route to delivering access and investment security to emerge in an election campaign.

So again, whilst the debate goes on if you are trying to determine whether to buy or sell my advice is to keep listening and to keep talking. As I advise my daughters as they prepare to vote in their first Federal election: listen to people you respect and those who are experts in the areas which mean the most to you, take the time to look at all sides and collect the facts. Then you are best placed to make an informed choice on who you want to vote for – or if you want to list or sell.

Posted in Ewan's Blog on 11th May, 2022