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Property costs are falling yet there are no victors in a downturn

For as far back as decade, there was apparently one story and one story just to be told about Australia's property market and it resembled the following: a youthful couple, more often than not from Sydney or Melbourne, begins sparing to purchase a house however battles to stay aware of soaring costs.They go to many auctions, however are out-offered by person born after WW2 and abroad speculators, who are storing up tremendous property portfolios to enhance from stocks, or, in some case, simply get rich and retire early.For as far back as two decades, plus or minus the odd amendment, it's been a similar story of rising costs and progressively bolted out first homebuyers.And so it was the case in my own working-class, albeit gentrifying, suburb where the call of auctioneers became the soundtrack to my Saturday mornings, as 30 or 40 people would compete kerbside to ?win? a $1m mortgage for a house that needed work. Younger buyers, watching aghast, couldn?t get a bid in unless their parents stumped up extra cash from the auction sidelines.It was the age when consultants flogged cheap apartments under the guise of ?free? property seminars, and spruikers wrote books about how to buy 10 homes before you retire, which inevitably included a chapter on millennials spending too much money on smashed avo and drop-in yoga classes.And afterward, some place over the span of 2018, the tide completely changed. The Australian Prudential Regulation Authority fixed loaning standards, broad investors became skittish, and prices started falling, gradually at first, but now at a rate that?s surprising even housing wonks.Ratings agency Moody?s has just forecast that Sydney house prices will drop by 9.3% this year, revised from its January prediction of 3.3%. It?s a similar story in Melbourne, with Moody?s original January forecast of a 6% decline updated most recently to an 11.4% fall this year. The Reserve Bank, most recently, warned that more than 3% of Australian homes are in negative equity.And what now of first-home buyers? prospects? Are they finally nudging out investors and buying up the houses?Not exactly.While the dimension of first homebuyers in the market is at a six-year high and properties are clearly more affordable than they were two years prior, it is still a long way from shabby to purchase or verify a home loan in metropolitan Sydney or Melbourne. Truth be told, an investigation of information by Ernst and Young has discovered that property holders in Sydney would have been more than $600,000 better off over 10 years if they had kept on renting and put a 20% deposit into a leveraged ASX200 fund instead.The decade-long story we have been told about our property market is based on a progression of deceiving assumptions: that property is the best and most secure way to accomplishing riches; that recent college grads are particular and have no reason for complaint; that the boom period will go on forever because the property market, unlike volatile stocks with their shorter run cycles, are as safe as houses.We have additionally turned into a country that sees the homes we live in as a speculation, at the same time, one in which, strangely, downturns can't reach. Presently the drapery has been pulled back, plainly property isn't some exceptional speculation class where the typical dangers don't make a difference. Purchase 10 properties by all means, but be prepared to take responsibility for the losses as well.Granted, the narrative is changing. People who bought six or seven properties on average wages are no longer held up as shining examples of entrepreneurship and admirable derring-do, but as ticking financial time bombs saddled with huge debt.Naturally, you may expect millennials to relish this moment. It?s their chance, perhaps, to claim some ground in the inter-generational property war, which has favoured investors through tax breaks.But it?s pointless.The truth is no one wins when you live in a society that amasses homes like trophies, refuses to take any responsibility for risk, and expects the good times to keep rolling in.