There are never ending predictions about the state of the property market. Especially when it comes to the property price predictions. There are predictions about property price increase which will make a lot of people happy and many people sad and there are also predictions about falling property prices which again will make many people happy and sad at the same time. To make things ever more interesting, the prediction can change totally within 12 months. Here’s one such prediction from an advanced property market. (not us Malaysia yeah)
Article in smh.com.au This was the consensus about the property market in Sydney and Melbourne real estate markets. It was predicted that there would be a deep and painful fall in home values and this would have shaved hundreds of thousands of dollars off the value of a median house. With this fall, some home owners would be forced into negative equity, where their debt is larger than the value of their asset.
This did not happen. Now, the predictions are totally different. ANZ now predicts home prices in Sydney and Melbourne will experience their strongest year since the 1980s and expected to rise 19 percent and 16 percent respectively. Meanwhile The Sydney Morning Herald / The Age Scope Survey predicts Sydney property prices to grow 5.9 percent in 2021 and 4.5 percent in 2022. Meanwhile Melbourne prices will rise 4.5 percent in 2021 and 5 percent in 2022. Do read more details here: Article in smh.com.au
Who do you believe then?
Think really carefully. Why do we need to believe all these predictions? Is it because we want to follow them? Well, if we did, then we would have been encouraged to sell our properties BEFORE the prices fall and if we did, then we are now looking at a big loss because we would have sold at a lower price and now if we want to believe property prices will be rebounding, we should buy a property? What if next year they predict property prices are going to fall again? It’s not even double whammy. It’s triple whammy! Haha.
How about researching and understanding then?
If someone is predicting a blanket kind of property price falling, then it has to be only be a crisis. Are we really in a financial crisis or is this a ‘lockdown’ induced negative sentiment? If someone is predicting property prices are falling, do we know if ALL areas would fall at the same percentage? Aren’t there any area which the price will remain strong and well supported by the owners who would not easily sell lower just because someone is predicting so?
What if it’s the other way? If someone is predicting that the price is going to move up, are they talking about some kind of economic revolution? Or are they talking about a rebound in consumption because people are no longer under lockdown? If they are saying prices will be moving upwards, then are they saying rising tide carries ALL boats? If they are, then better be very wary yeah. An unwanted area will still be an unfavourable area after the frenzy is gone…
Better believe what you found out versus simply listening to anyone yeah. If you know your neighbourhood very well, your prediction is likely to be way better than all these researchers in the bank who ARE not on the ground but are basically looking at just numbers, putting in another number and then announce the final results. Then, this result is shared by everyone,suddenly become viral and well, it may influence the market to react the way…for a while. Happy understanding.
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