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Media Fearmongering: The Property Upswing is Here
fear

The media has a long history of predicting the end of the world, playing on our natural fear of the unknown. As property investors, we’ve seen countless headlines warning of a property market collapse, fueled by the media’s need for attention and survival. Fear sells, generating clicks and ad revenue. While the media can provide valuable information during real threats, it’s crucial to separate the noise from the signal.

The media’s negativity can influence home buyers and investors, making it difficult to make sound decisions. However, it’s important to remember that the media is often “wrong”, they often publish so called experts’ press releases as well researched fact, they need content, don’t forget that. 

Property investment is a long-term game that requires focus on the bigger picture. So despite some challenges, the Australian property market remains one of the best places to invest in real estate.

Here’s the current bigger picture:

  1. National home values rose 1% in the three months to April. This marks the first quarterly lift in home values since May last year. 
  2. The combined capital cities dwelling market value rose 0.7% in the month of April, following a 0.8% lift in March. This takes dwelling values 1.4% higher from a trough in February this year.
  3. The amount of time it takes to sell property is starting to pivot. Median days on market nationally is down to 33 in the three months to April. This has fallen from 37 days in the three months to February.
  4. At the median level, vendors are now offering less of a discount on their property across the combined capital cities market. The median vendor discount across the combined capital cities has eased from -4.35% in the September quarter of 2022, to -3.88% in the three months to April 2023.
  5. At the national level, there were 137,629 listings observed over the four weeks to 7 May 023. Total listings are still markedly lower than the previous five-year average due to the relatively low volume of new selling decisions.
  6. Annual growth in rent values held steady on the previous month, at 10.1%. Across the combined capital cities, rent values rose 11.7% in the past 12 months, which was the highest annual increase on record.
  7. The portion of home sales that took place in regional Australia comprised an estimated 37.0% of home sales in the three months to April. This is down from a peak of 42.3% in the three months to September 2020, but remains above the decade average of 35.3%.
  8. Australia faces a housing shortage that will worsen as the population grows by approximately 1.5 million in the next three years. This creates a strong demand for properties to rent and buy.
  9. Property markets across Australia have hit their lowest point and are now rebounding due to supply and demand dynamics. This is not a short-term trend but a fundamental shift.
  10. Interest rates and Inflation are high, and while they will decrease in the future, they will remain relatively high for some time. Interest Rates may limit borrowing capacity, but it’s part of the property cycle for long-term investors. Real estate serves as a hedge against inflation, benefiting savvy investors.

Instead of succumbing to fear-driven headlines, now is the time for long-term thinking. The property market is entering a new cycle, presenting numerous opportunities for those who stay committed. Challenges and risks are inevitable in any investment, but residential property in Australia has consistently trended upwards over the long term. With a focus on long-term growth, investors can ride out short-term fluctuations and succeed.

It’s not the media’s responsibility to ensure your investment success. Stay informed, rational, and committed to your strategy. The property market has turned the corner, and the road ahead looks promising. Don’t be swayed by the media’s reports of impending doom and focus on your long-term perspective.

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