What will happen to property prices?

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  • This topic has 0 replies, 1 voice, and was last updated 7 months ago by AvatarPK Gupta.
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    • #24941
      AvatarPK Gupta
      Guest

      If Australia’s last recession is anything to go by, the answer is – it depends on the geography.

      Australia’s last actual recession occurred in 1990-1991 when unemployment rose by c. 5%. This is the same quantum that the Australian government has forecast for our current recession.

      How property prices performed in 1991 was different in different cities. Each have their own growth drivers. The trick is to understand these.

      • ASX 300 – Dropped 40%
      • Sydney Property prices – Dropped <1%
      • Melbourne Property Prices – Dropped >2%
      • Perth Property Prices – Dropped 1%
      • Brisbane Property Prices – Increased <7%
      • Hobart Property Prices – Increased >4%
      • Adelaide Property Prices – Increased >5%

      There are 15,000 suburbs in Australia, so even the above isn’t that useful. There will always be suburbs that perform poorly, and suburb that outperform the average (it’s an average for a reason!).

    • #24948
      Matt DjolicMatt Djolic
      Moderator

      I believe it will have a bigger impact this time on property because of the heavy reliance of the economy on construction in general. Although restricted supply might have a positive impact on prices, it seems people are reacting a little different this time and are cautious due to the overextended nature of many households. I guess the only thing we can do is rely on data—hunches loose appeal at times when fear pervades.

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