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Australian Property Market

Blog | Has the property market fallen 40% as we were told 12 months ago?

Nathan Lear
Partner/Private Client Adviser
16 Sep 2019

Exactly a year ago, I wrote a blog following a sensationalist 60 Minutes report titled “Bricks and Slaughter.” The segment claimed the Australian property market could fall as much as 40% within the next 12 months.

My blog from last year can be found HERE and as we are now exactly 12 months on, I wanted to take stock and see what ‘actually happened.’

*Source: Cannstar, Core Logic

Although across the board prices declined over the past 12 months, the statistics show the fall in property prices was nowhere near the 40% decline some of the so-called property experts predicted. Core Logic data shows that the nation’s annual growth for the 12-month period to 31st August 2019 was -5.2% and a total return of -1.5% when accounting for rental income. Not quite the 40% decline reported on the 60 minutes segment.

The two biggest Australian property markets, Melbourne and Sydney seemed to have turned the corner both showing positive returns of 1.8% and 1.9% respectively for the three months to the end of August 2019.

In addition, auction clearance rates that at one stage were dwindling below 50% have consistently been up above 70% in recent months.

What has caused the shift? The market has responded positively post the federal election result, lower interest rates (that appear that they will be getting even lower), tax cuts and an easing in lending standards.

What is the main lesson to take from all this? Firstly, don’t act upon sensationalist media reports. As I said 12 months ago if you are planning to buy or sell a property, do your research, understand the market and make an informed decision. I have heard stories of people “waiting for the market to fall” before purchasing a property. I wonder if these people are still waiting as some parts of the market already appear to have turned the corner. It is almost impossible to predict markets.

Hewison Private Wealth is a Melbourne based independent financial planning firm. Our financial advisers are highly qualified wealth managers and specialise in self managed super funds (SMSF), financial planning, retirement planning advice and investment portfolio management. If you would like to speak to a financial adviser on how you can secure your financial future please contact us 03 8548 4800, email info@hewison.com.au or visit www.hewison.com.auPlease note: The advice provided above is general information only and individuals should seek specialised advice from a qualified financial advisor. The views in this blog are those of the individual and may not represent the general opinion of the firm. Please contact Hewison Private Wealth for more information.