I work at the coal-face of the real estate industry. I’ve never said this before, but dark times are coming: ‘Everyone will suffer’

For 25 years, real estate agent Adam Flynn has been dismissing his fear-mongering colleagues’ claims that the Australian property bubble is about to burst.

Now he believes their dark prophecy could become reality. 

Speaking to FEMAIL, the industry expert and property investor claimed that interest rate rises in August or September, plus a potential further one in November, would cripple the market.

‘It (the Australian housing economy) will haemorrhage and everyone will suffer,’ he claimed.

Mr Flynn works ‘at the coal face’ of the industry – selling houses – far away from the pen-pushers at the Reserve Bank of Australia who continue to increase interest rates in an attempt to curb inflation.

‘They don’t hear the conversations in real time, based on the 13 interest rate rises – people are just hanging on by a thread,’ he said.

‘Just the other day I was speaking to a woman, a home-owner, who only had enough money in her account to buy her kid new school shoes.’

And it’s not just the broke and the financially illiterate who are nearing breaking point, he said. 

Australians ranging from budget-savvy first-time home owners to those who had enough pull with the bank to secure loans for big homes worth millions are in trouble.

Even once loaded property developers are stretched too thin.

‘I have been speaking to people in every category. I have never seen it this bad. I think 30 percent of people with a mortgage in Australia are at breaking point. 

‘They will break if rates rise – and many more will be on the brink.’ 

People will be forced to put their homes on the market to pay back the banks.

‘There will be a flood of properties and the only way people will be able to make one look more attractive than another is to lower the price,’ he said.

‘There’s already a flood of homes on the market every spring. This will make that worse.’ 

The rush to stay competitive and sell quickly could lead to a drastic drop in house prices, according to the Melbourne-based realtor.

‘We could see prices wiped by 40 per cent – a haemorrhage like this will take years to recover,’ he said.

‘People won’t get enough back for their homes to pay the banks, or get enough back for another deposit. They will just lose everything.’ 

He suggests anyone who can’t afford more interest rate rises or who don’t want to sit on their property for years to come to sell now 

Then there is the sting in the tail – the fees real estate agents charge sellers, he explained.

Mr Flynn expects prices of property across the country will fall quickly.

And he is preparing for a record-breaking amount of homes to flood the market for a quick sale over Christmas and January when things are usually quiet in real estate.

Mr Flynn says people will need to put their homes up quickly to avoid drama from their bank, and will have to keep prices low because otherwise, after a few months on the market, their homes will be stale. 

Especially if other sellers come in at a lower price and get snapped up. Buyers will think the more expensive house has problems. 

‘And people won’t have that time. They won’t be able to put (up the price) and gauge interest and then take it off  again. The banks will want to know they are serious about selling.’

Mr Flynn said the damage won’t be isolated to a specific location or tax bracket and will change the property market and wealth distribution across Australia forever.

But a total property market collapse wouldn’t be bad for everyone.

‘The people who have never been able to own property, who struggle to come up with a deposit or get a loan will have their chance,’ he said.

He said come December, if there are two rate rises in the next few months, people will be desperate to sell creating a buyer’s market 

If his 40 per cent wipe-out prediction is true then people could be securing homes now worth $1million for $600k, he claims.

‘In my opinion the RBA have no other way to tackle inflation than to put interest rates up. But it would be wildly irresponsible for them to do it.’

Australia could have a new wave of first home-owners and a ‘new money’ class could evolve from the ashes, he said.  And of course the super-rich would still benefit.

‘There are investors with cash waiting for this to happen. They will swoop in and buy good homes for dirt cheap,’ he said. 

‘The next two years will be a buyer’s market. Until inflation settles.’

Then things will begin to rebuild, slowly. 

Mr Flynn says the wave could start as early as the day interest rates are put up – with most people aware they are already pushing against their limit.

But it could be a two-stage process with others rushing to offload property once they are unable to make the next repayment.

Previously Mr Flynn has had confidence in the market, claiming there will be small bumps, but that the bubble would never burst completely. 

‘I have never said this – and I have been in the industry through the GFC, 9/11 and Covid,’ he said. 

Mr Flynn says anyone who’s not prepared financially or mentally to stay put in their home for the next three-to-five years should sell now, before prices drop off.