Weren’t we here in 2009? Wasn’t it back then that international economist Harry Dent made national headlines by predicting that the Australian stock market would crash and our property prices plunge by 40 to 50% by 2011? Well, post GFC held some pretty ordinary years for our local markets, but the predicted implosion never happened.
Fast forward to September 2014 and some analysts are back talking bubble, all because the property market in Sydney has experienced a growth rate of 15% in the last 12 months. Even our Governor of the Reserve Bank, Mr Glenn Stevens, a man I normally respect and admire, has taken to warning Australians that property prices sometimes go down (no, really?!).
Well, here’s a newsflash: the Australian property market is not homogenous.
Surprised by that anyone? Nope, didn’t think you’d be.
Which line stands out in the graph posted by Alan Kohler, shown above? That’d just be the red one – Sydney.
Even the Federal Treasurer Joe Hockey agrees, talk of a property bubble is lazy analysis.
In Perth, the median house price has pretty much moved sideways for most of 2014, but again, Perth is also not a homogenous market, with some suburbs and price brackets outperforming others. And whilst anecdotally agents are suggesting that buyers are emerging from their Winter slumber and enquiries are on the uptick, I haven’t met one yet who’s expecting anything great out of the market for the rest of this year. And a property bubble? Um, doesn’t there need to be one first to burst?
I guess there’s no money or publicity in predicting that not much will happen. And it wouldn’t be the first time that economists and pundits based in Sydney have fallen into the trap of thinking it’s the centre of the universe. But if I was putting a bet on what was going to happen in the foreseeable future in the Perth market – “not a lot” is where my money would be.
Disclaimer: the information presented above reflects the personal opinions of the author and should not be relied upon by individuals when making property buying or selling decisions.