We haven’t hit bottom yet and there’s still more to come. But there are signs the fall won’t be as long or far as predicted. We’ve seen the predictions of drastic falls. Almost all economists are clustered around 20% from top to bottom this cycle. Some even 30- 40%.
As with most property predictions in Australia, it’s best to take a breath. There’s often self-interest involved; from simply attracting headlines to selling product.
Firstly, some basics. Australia isn’t one market. Victoria isn’t. Even Melbourne isn’t. Regional hasn’t fallen as much as the ‘burbs and cheaper properties have held up better than expensive ones. Development sites have been hit hard (25-35%). So, maybe an average drop of 8% so far in Melbourne.
But another statistic shows why the falls may finish sooner than predicted. Springtime listings are usually about 21% higher than average. This year, they have been below average. Less stock is coming onto the market; this means less choice for buyers. Buyers can’t rely on waiting for the next listing (at a lower price) if they miss this one.
So, fewer options and cheaper prices means more interest over coming months. Our view is the 2nd quarter of ’23 will see the bottom of the cycle. It won’t be clear until afterwards of course. And picking the bottom is more luck than expertise. Best to buy or sell when the time is right for you. Don’t wait for the perfect time; unless you’re feeling lucky. 