‘Crash’ is a word that gains attention, it makes great clickbait. The real danger in a headline such as: ‘Is Australia’s Property Market About to Crash?’ lies in the media influence on people’s perceptions, which can have a potential effect on buyer behaviour.
But the reality right now is, the Australian property market is going through a pricing correction, not a crash, according to expert economists. We are seeing small decreases each month in median prices in some market segments, mostly due to affordability and finance affecting buyer activity.
In fact the latest Domain House Price Report showed house prices falling by just 1.4% in Australia’s capital cities in the June quarter, and they rose in all cities except Sydney (-3.3%), Melbourne (-3.1%) and Canberra (-2.5%).
The Melbourne property market has meandered along its own path since Covid, declining where all other cities have seen solid price growth. Melbourne and Darwin were the only two cities where house prices have fallen in the past year, with Domain indicating a -0.4% price drop in Melbourne, and -3.1% in Darwin. Darwin did see unit prices soar by 25.6% in that period however and the Melbourne decline is minimal. Besides, when is the best time to buy for a long term investment? When prices are low!
Experts say that without a sudden economic event such as a rapid spike in unemployment or a plunging stock market, a property market ‘crash’ is unlikely. What we are experiencing is a period of declining growth which some suggest won’t fire up drastically and won’t last too long.
So, don’t worry – stay on your path to home ownership.
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By Wendy Chamberlain
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