Reading the property market now depends on where you live and who you are talking to. Everything is location specific and it is hard to get the right info each specific city or region. Reading national news or listening to broadcast media can be confusing with this topic.
If we look at the attached chart from CoreLogic, we can see that the national trend line is generally down. The drop in median house values has been -7.2% nationally in the last 12 months. The Sydney and Melbourne markets have been the hardest hit with around a 12% drop in values since the highs of late 2017. This is the highest property price reduction since 2009 and the GFC.
But it is not across the board. Hobart, Canberra and even Adelaide have stayed in the black, as have all regional markets. However, Hobart did see a decline of 0.9% for April so this could be a signal that these previously strong areas are catching the bug.
Local Market Activity
Basically, Byron and the Northern Rivers area has plateaued after strong gains over the last couple of years. But this year we are starting to see some discounted sales and this is showing up as a negative price trend in the data for 2019. I have heard of individual highly discounted sales that have affected our property market data. But quality properties are selling and there are still plenty of buyers. But it is patchy and no longer a seller’s market. I have heard of some sales that have been listed for a while that sold well under the original listing price. I have also heard of sales with multiple bidders and deals going above the listing price.
This recent, or pending, interest rate reduction should have a positive impact on the property market. Confidence will strengthen for both investors and owner occupiers as holding costs have never been this low. There is also talk that the Sydney and Melbourne slump has ended with stronger auction clearance rates. There is plenty of commentary suggesting that the regions (that’s us) will remain firm as more people migrate from the cities for economic and lifestyle reasons.
Just what will occur post-election is also anyone’s guess. Of course, the Murdoch media, and most of the property industry is predicting doom and gloom because of Labour’s planned cessation of Negative Gearing. Personally, I don’t buy it. Yes, it will be a firm brake on some investors collecting multiple rental houses in property portfolios. As for Byron and the Northern Rivers area, I do not predict much of an upset as the majority of buyers here are lifestyle buyers, owner occupiers or retirees. Negative gearing or capital gain discounts are not the priority for this demographic.