If you believed everything you’ve heard recently about property prices, you couldn’t be blamed for stocking up on canned goods and retiring to your underground bunker. Unfortunately, you’re probably only getting half the story.
The media loves taking about “the Australian property market” - especially if they can work "boom" or "bust" into the headline. For property investors and homeowners, however, there’s one big problem with that.
There is no one Australian property market. Rather, it’s made up of thousands of individual property markets. And more importantly - there are always very different things happening in different parts of the country.
So trying to work out what will happen to your home or investment property, or making decisions about buying or selling, by listening to reporting on "the Australian property market" is fraught with danger.
The reason national property prices appear to be going backwards is pretty much exclusively because of what is happening in Sydney and Melbourne right now.
Sydneysiders and Melbournians have enjoyed several years of massive growth - on average, Sydney property prices grew by more than 60% in the 5 years up to January 2018, and Melbourne wasn’t far behind.
What the reports, particularly in the tabloids and on TV, often don’t mention is that outside of our biggest two cities, property is doing very different things. In fact, there are plenty of locations experiencing exceptional growth right now.
For example, towns in regional Victoria (like Ballarat and Bendigo), and parts of the New South Wales Central Coast and South-East Queensland are all growing, and with the right advice and assistance, property investors can do very well there right now.
The simplistic doom and gloom stories masks the very positive signs in property markets in much of the country. But so what?
Firstly, it’s misleading. It does a disservice to viewers and readers, and the wider community. It’s not ok for the media to sensationalise by telling only half the story - and it should be called out when it happens.
Secondly, and perhaps more importantly, misleading reporting talking down the economy or property market can actually be a self-fulfilling prophecy, and cause or increase a lack of confidence generally. And that's bad for everyone.
The absolute last thing that the attention grabbing headlines want to tell you - and it’s a big one - is that this is all pretty normal (worst headline ever, right?).
The reality is that following every property boom, it’s normal for prices to come back slightly, and to plateau for a period. That is what we are seeing in Sydney, for example, right now.
It’s not new, or shocking, or cause for mass panic. Between 2000 and 2004, Sydney had a property boom. Prices were growing at up to 22%. And after enjoying those years of solid growth, Sydney prices saw a slight reduction and plateaued for a few years. A similar thing happened in 2010, and here we are again.
Property, like all markets, moves in cycles. It’s normal and expected. And painting property in the entire country with the one brush is both inaccurate and pointless.
It doesn’t give you the information you need to make decisions about buying a new property, or selling an existing one. In fact, rather than following the latest headline, the real story behind what’s happening in property lies in research, and understanding what the data is saying for a given location.
Good research is easier said that done though. Finding the right information and knowing how to interpret it can be a challenge, particularly if you are time-poor or lack experience in this area. That is why the assistance and expertise of a property specialist is so important for you to be able to make smart, informed decisions.