Springtime

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For many years now, home buyers and investors have had to wade through a sea of negativity on housing price commentary, while all the time prices have been going up.
Bearish commentators have regularly forecast dramatic downturns. None have eventuated in Sydney. And the pessimists were out in force last week on the ABC Four Corners program.
Even well regarded property forecasters don't necessarily get it right either - as they all tipped 2017 would see a significant slow down in price growth.
But here we are entering spring with continued strength. Sydney's annual price growth running at above 10 percent, according to CoreLogic, having done so since 2012.
Imagine if you had missed out because you placed you faith in a headline grabbing forecast by Steve Keen or Harry Dent?
You'd be sitting on the sidelines, having missed out on 10, 20, maybe 50 percent price growth.
Of course there was risk in your purchase, but hopefully you did so with some caution and some cushioning should circumstances turn.
The economic bear Gerard Minack has long been warning of a recession. It was supposed to come as Australia ended its once in a century mining boom. 
"I think it's a powder keg," he told the 4 Corners reporter investigating the forces driving our debt fuelled housing boom.
"I don't know when we get a downturn that pops this, but sure as hell one's coming," he told 4 Corners which found several sad situations where Perth buyers had thought it was all risk-free.
Gerard Minack, the former Morgan Stanley executive, said Australia had been led down a perilous path by current tax arrangements and lenders who had been increasingly willing to leverage up borrowers.
Australia now has a household-debt-to-income ratio of 190 per cent.
“For every $1 of household income, there’s [nearly] $2 of debt,” Mr Minack said.
The same Minack quietly upgraded Mosman homes a little while back to a $4.2 million three storey house.
Minack's former Federation sold for $3.1 million having paid $1.2 million in 1999, appreciating at a nice annual rate of 6.45 percent.
Both featured five bedrooms but the latest has prized harbour views. 
Locals say he bought well as the block cost $2,725,000 some 10 years ago.
Of course there was risk for Minack, like every other purchaser. Ofcourse something could happen to any family or our economy that makes a sound purchase riskier.
In 2015 before his purchase Minack forecast when "we get across-the-board unemployment then we’ll get an across-the-board downturn in house prices; it’s just a matter of time."
Time has moved onto record low unemployment, with most home purchasers happy with their well-leveraged lot. 
A downturn will happen one day, but I sense when it does there will be a buffer that wasn't there last time, in the early 1990s recession.
Given the preponderance of investment property, unemployed homeowners will firstly sell their investment property, rather than get booted out by the banks of their own home.
This article first appeared in the Daily Telegraph.
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