Breaking the seal

It was a momentous moment. After four months and two discounts, the pictured house dropped below the 400k price level. Why is this so momentous? The house sits within one of Burnie's McMansion estates, where eight houses, equating to over 20% of this estate are up for sale, and all houses were listed over 400k.

That was until this week.

It's now at $399,000 (I'm sure that $1000 was a true psychological barrier for buyers) down from $425,000. Reluctantly this owner has seen the writing on the wall and offered a token discount, while no doubt the other vendors keenly observe. Only one other vendor has seen fit to discount, and this amongst a group of houses that have sat, without interest, from two to seven months.

The pictured vendor may still walk away with significant gains, the house was purchased in 2002 for $179,500, but it's the newer owners in the estate who will be getting edgy. When you shelled out 400-600k over the past couple of years and the guy across the road is struggling to get 399k, that's more than his equity evaporating, it's yours too.

Of course it's your house though, and it's always worth more, but c'mon - 399k for that solid brick home above, or 450k for ugly blueboard, sloshed with render, now warping and cracking in less than 6 years?

Well, they're still both overpriced, so I'll pass.

In the end, it's stubbornness that will be the undoing of all of these owners. Seven months without a discount shows the belief: property can only ever appreciate, has been well drummed into their heads.

With interest rates predicted to rise five times before the end of next year, and almost assured next month, the amount of potential debt a buyer can hoover up is reduced. Meaning less will be paid in the future than will be now.

Or you can take the property council's word that retirees from all over Australia will wheeze into the state over the next few years, pushing up prices for the next boom.

I can only assume we'll then be expected to become in home caregivers to the hordes of mainland codgers when our health system fails to cope.

And wasn't that always your dream? Washing the scrotum of some cantankerous old bugger in his own home, while you can never afford your own.

I'll get my sponge.