Latest Housing Figures Look (Really) Bleak, But Are We Just Interpreting Them Wrong?
It's the latest installment in a series of bad indicators regarding the current state of Australia's property market -- but not everyone is buying the dire headlines.
Sydney and Melbourne were the weakest housing markets -- their values falling by 7.4 and 4.7 per cent respectively in past 12 months.
The median house price in Sydney has fallen by $72,041 in a year, while Melbourne has lost $45,376 according to CoreLogic data released on Thursday.
"The latest results take the annual decline across the national index to 3.5 percent, signaling the weakest macro-housing market conditions since February 2012,” CoreLogic head of research Tim Lawless said.
Property author, commentator and Sky News television host Chris Gray told 10 daily the current dip is a pretty normal part of the property cycle.
"If you look at the figures isolated over a one year period it does look bad, but property should be a ten, 20 or 30 year investment," he said.
The report found the weakest conditions continue to be felt across Australia’s two largest cities where investment buyers have been the most concentrated, supply has been highest -- and housing affordability, the most stretched.
The regulatory crackdown on lending standards and the reluctance of banks to lend as much money to prospective buyers following the royal commission has impacted the market, CoreLogic said, bringing the steepest national falls in six years.
"If you're suddenly forced to sell, you may be in a fragile position and get affected, but the majority of homeowners aren't in that position," Gray said.
Sydney real estate agency owner Simone Azzi says she is "not surprised at all" by the latest data.
"I would dare say in the area I look after, Sydney's inner west that prices have dropped by 10 percent in a year. The market was crazy and now feels like it is returning to a normal market." she told 10 daily.
Azzi has been in real estate for 14 years and says she has seen this cycle three times.
"The dip, plateau and then it goes up again in two or three years as it always does," Azzi said.
And she says she sees the "market calming" as a good thing.
"My message to buyers is that banks tightening up is a good thing, it's making sure people don't overextend and end up losing their homes.
"Also see this as good news, now people are able to get into the market for the first or maybe upgrade the family home -- and a year ago these people were priced out," she said.
Hold on to your property unless you absolutely have to sell, Gray said.
"Speak to a mortgage broker and see if you can get a better deal or lock in a five year interest only deal," he advised.
"It should be a no-brainer to buy now but now is the time when the average buyer will be scared off by all the media headlines, whereas astute investors are buying up."
And if you are buying property now, avoid large apartment complexes, Gray said to opt for ones in blocks of less than 20.
This week, Capital Economics said falling house prices could reduce household wealth by $800bn over the next few years.
Last month, AMP Capital downgraded its forecast for the housing market to 20 per cent top-to-bottom falls in Sydney and Melbourne spread out to 2020.
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