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decline in property prices

Are you concerned about a decline in property prices?

The world around you seems to be going beserk !

The media is full of stories about a potential decline in property prices. It’s hard to keep a cool head and stick to your plan.

Just look at the crazy behaviour of people in your local supermarket. You’d be forgiven for thinking we were preparing for some sort of apocalypse. The media obsession and people’s lack of understanding of the new flu virus, has lead to the herd mentality at its worst.

But how will all this affect the housing market, and will it affect the housing market at all ? Will there be a decline in property prices ?

As Australia’s favourite asset class you can see why this is a topic close to everyone’s heart. But for starters can we remind everyone out there that Australia is made up of many different housing markets. They all experience growth (or not) at different levels, at different times for different reasons. Also can anyone out there remind us of when the most recent housing “crash in house values” occurred ? In any property market in Australia that had stable growth drivers, a growing population, a diverse economy, infrastructure spending? We challenge you …

Of course, we’re not talking about single industry mining towns here. We’re talking about very solid, stable “normal” suburbs where “normal” families live, work, go to school, enjoy their spare time. Of course all property markets flatline, correct a little, grow again …. this is normal, but actually “crash” ??

So as the stock market goes through its ups and downs over the coming weeks, one thing we can expect in a potential recession is for different parts of the country to perform very differently. And Australia survived the last global recessions very well, admittedly with a major buffer in its coffers from the resource boom.

If Australia goes into recession then  the kind of recession we have will most likely determine where it is felt most deeply. That’s stating the obvious of course.  If it is a financial crisis, then Sydney would be hit the hardest. Whereas if the price of resources decline, then Western Australia and Queensland will suffer the most.

“The lesson of all this is that property prices can fall outside a recession, just as they can rise during a recession — and the national average can hide all sorts of risks and opportunities.”

History has taught us that Sydney is particularly prone to this boom and flat-line cycle..

..and every time Sydney booms we get the same headlines and the same concerns. Tell property owners in Melbourne, Brisbane or Adelaide that their properties have boomed and their markets are about to crash. They might have a different opinion on this.

So if you are one of those property buyers who is waiting for the right time to buy, rest assured that the next crisis will be just around the corner.

Call us on 1300 077 766

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