Betting against the house

If you hear a strange counter call, it’s probably generation Y, sitting in the nosebleed section, hoping, pleading, fingers-crossed; building up a chant: “Crash, crash, crash, crash”

Playing the property market is a serious sport in Australia. Our addiction to it rivals our dedication to any football code. Participants and spectators hang on each morsel of news concerning building approvals, auction clearance rates and median house prices as they would the result of their Rabbitohs or Blues in the Friday night game.

No surprise then that the recent announcement of a slide in housing loan approvals was met with concern and consternation. Loans to owner-occupiers fell 1.8 per cent in April, to 47,669 new finance commitments, Bureau of Statistics figures showed. Not since March 2001 has this measurement dropped so low and it was the seventh monthly slide in a row. The spectators in the stands are nervous. There’s anxiety in the players’ dressing room. What’s happening to our team?

There is one group of punters, however, who are pinning their hopes on the failure of the housing market (and it’s not Goldman Sachs betting against their own collateralised debt obligations). You may be able to hear them. If you hear a strange counter call, it’s probably generation Y, sitting in the nosebleed section, hoping, pleading, fingers-crossed; building up a chant: “Crash, crash, crash, crash.”

Generation Y want, no scratch that, need to see property prices come tumbling down. We’ve had the obsession of home ownership instilled in us, but we just cannot afford to get on board. Even the federal government’s increase of the first home owner’s grant during stimulus didn’t help us. Sure it was a helping hand with a deposit, but all it really did was keep house prices inflated. You’ve got $21,000 from the government? Well guess what, that house you want is now $21,000 more expensive... funny that. In the end, property owners are the ones benefiting, but lowly gen Y is still scrambling to get on the ride.

For our entire lives we have read and heard and seen nothing but news about property prices going up... and up and up. Record prices. Auction fever. Even just last week the Knight Frank Global House Index placed Australia as the fourth fastest growing property market in the world behind China. With a backdrop of a global financial crisis, Australia still managed to crack 20 per cent year-on-year growth of the price of houses. When will it stop?

Just to add salt to the wound, generation Y are continually lambasted for their propensity to live at home with their parents for longer than previous generations. Is it any wonder? While previous generations had the luxury of free university education and then the opportunity of buying into a relatively affordable housing market, we are lumped with the complete opposite. Housing in Australia has never been so unaffordable.

So that’s why we’re betting against the rest of the country. With each news report of a stumble in building approvals here or skittish investors there, we are willing the whole property market to come tumbling down like a house of cards. Once it does, we’ll get on board and be just as addicted to the sport of property as current investors are. But until then we’re sticking to our section of the stands.

Now where’s my vuvuzela?

BRW

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