Falling house prices could offer a rare opportunity for younger Australians struggling to buy their first home, comedian Simon Taylor has argued, as he welcomed a modest downturn in the property market.
Taylor, writing from Melbourne, said the recent decline had given him hope that he might eventually raise his children in a house of his own, rather than continue worrying about rental restrictions and recovering a bond.
He acknowledged that homeowners who bought property as an investment might be concerned about seeing its value fall. However, he questioned how much damage a drop of 5 per cent would cause to owners who were not planning to sell in the near future.
For those living in their homes, Taylor argued, a fall in value would matter less if they could remain there. He also suggested that investors with large property portfolios would have time to sell before their debts exceeded the value of their properties.
Falling house prices could help first-time buyers
Taylor said a period of relative stability, in which property prices occasionally declined rather than rising continuously, could improve the prospects of younger generations. He imagined that his own children might one day have a better chance of buying homes.
His comments came against a backdrop of concern about negative gearing and the growing importance of financial help from parents. Taylor said Millennials had increasingly felt that home ownership was possible only for those with access to family wealth or parental guarantees.
He also addressed warnings about negative equity, which occurs when a property is worth less than the outstanding mortgage. Although the prospect would be particularly difficult for recent buyers with small deposits, he said it would not necessarily affect people who could continue living in their homes without needing to sell.
Taylor said he would be watching the property market over the coming year, distinguishing between descriptions such as a “fall” or “drop” and more severe language such as “crumbling” or “freefall”.
He presented the prospect of lower prices as a potential benefit for first-time buyers who had previously been priced out of the market, while acknowledging that property owners and real estate agents faced a less comfortable period after years of rising values.
Taylor is a Melbourne-based comedian who became a writer for The Tonight Show with Jay Leno at the age of 24. He has also appeared at Just for Laughs and performed stand-up on The Tonight Show starring Jimmy Fallon.
