Property market Australia showing a drop for the first time since 2018
The main reason stated for the decline in home values is because the demand has dropped and this was caused by the rise in interest rates by Reserve Bank of Australia (RBA). In other words, buyers may have deemed the rise in rates as making the repayments too high for comfort and thus they are now taking a look and see attitude. Sellers meanwhile may have had to drop prices in order for the repayment to be lower in view of higher rates.
Article at focus-economics.com At its monetary policy meeting on 7 December, the Reserve Bank of Australia (RBA) hiked the official cash rate (OCR) from 2.85% to 3.10%.
Meanwhile in a report via an Article in corelogic.com.au
“The -5.3% drop in housing values through 2022 marks the first time since 2018 where national home values fell over the calendar year. The 12 months toDecember also mark the largest calendar year decline since 2008, when values were down -6.4% amid the Global Financial Crisis, and successive interest rate rises.”
“Despite the downturn across many areas of the country, housing values generally remain well above pre-COVID levels. Across the combined capital cities, dwelling values remained 11.7% above where they were at the onset of COVID (March 2020), while values across the combined regional markets are still up 32.2%.” Read more here: Article in corelogic.com.au
Are the home prices in Australia considered low after this annual fall in 2022?
I think the answer from the potential buyers is a firm No. Do take a look at the prices below for some ideas yeah. Median price showed that New South Wales price in the capital, Sydney is above AUD1 million. Meanwhile in melbourne, the median price is close to AUD800,000. Reference: Article in corelogic.com.au
High property price and falling property price can be at the same time
Some people get too carried away with property prices falling and failing to understand the actual happenings on the ground. Property prices cannot keep rising because if it does, very soon, it will suddenly crash. This is not to anyone’s benefit. Thus, any property price increase sould be moderate and should correspond to the economic growth and salary growth too. Else, more and more buyers would be stretching themselves too much and the whole market would be full of risky transactions.
Hopefully this gives a good perspective for everyone when it comes to property price and falling prices. I have zero idea if property prices would move up or down yeah. Happy deciding.
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