ExKiwilass

I see listings sitting for longer in my area, which is normally v. sought after.

Whether it leads to significant price drops remains to be seen. If listings keep rising and sales drop, then sure. But the summer is traditionally a slow time anyway.

neil248

Location, Location, Location. It is still a fact that many people from all over the world actually want to live in Australia unlike maybe somewhere like Detroit where I think you can buy an entire deserted neighbourhood for around $10(slight exaggeration)

If prices just about hold then inflation alone will do the job of reducing real term value anyway.

We bought our place for $556k in 2007 and according to the RBA inflation calculator that $556k is now around $590k. The house is probably worth roughly what we paid for it if we were lucky. I could kid myself it has not dropped in value but in real terms it has of course.

Thats at an inflation rate of 3.1% and a few more years of that given that most people do have jobs and need some where to live the $556k will eventually look quite attractive.

Another thought is that a reasonable 4 bed house on a serviced block of land must be costing around $340k to produce and that will be in legoland not the more desirable areas so how low can prices actually go in places that people want to live.

Another thought again is that if prices crash as much as some people on this forum appear to want there maybe other wider social problems in place that
make the price of houses the least of your concerns.

ABCDiamond

The more new smaller homes that are built in the outer suburbs, at lower prices, will have the effect of bringing down the overall Australian medium price without the more expensive properties 'having' to drop in value.

A 44% drop in median price and Australia's Housing price problem fixed, all we need are some, out of the way, cheap terraced houses built.

Kalenge

My sentiments exactly.

There's the usual small band of doom and gloomers on this forum who want nothing less than a total loss of confidence in any sector that can influence the value of houses. This is their ticket to their dream home of course.
I know of a particular individual who admitted a grand plan of spreading as much negativity on forums to hopefully have some influence in the general markets desire to buy a home.

What they fail to understand is that should there be dramatic falls in prices then a lot of other factors will come into play and they may find themselves in a worse situation.

The other factor of course is that should the housing market start having some dramatic falls in value you'll have a load of Brits, South Africans, Chinese et al falling over themselves to take advantage ... cushioning the fall almost before it happens.

mohogony

Australia and Canada are totally two seperate countries on the other side of the world from another, house prices falling 30% in vancouver is meaningless regarding OZ house prices.

spottydog

I love median prices, possibly one of the most pointless stats available. Here are the median house prices in my area according to RP data. These show a "crash" of 24% last year.

Year Median House Price House Price % Change (YoY)
2001 $1,009,500 28.6%
2002 $1,236,250 22.5%
2003 $1,205,500 -2.5%
2004 $1,265,000 4.9%
2005 $1,575,000 24.5%
2006 $1,807,500 14.8%
2007 $1,625,000 -10.1%
2008 $1,700,000 4.6%
2009 $1,290,000 -24.1%

This "crash" is however totally due to last year being year of the first home buyer so more 2 beds and less 5 bed/waterfronts being sold, the same as the rise of 24.5% in 2005 is likely to be because less 2 beds were sold.

man_called_Horse

I have to agree.... I sometimes think its a case of people wishful thinking, Some people know they are going to get stung by the sale of their house in UK and are faced with the reality of inflated house prices in Australia. I think they keep telling themselves that there is bound to be a price drop in Australia in the hope it will turn into reality.

Even if there is a drop in house prices it certainly wont be uniform across the country.. some areas will be hit harder than others and some will only feel a slight ripple.

coolshadows

Totally agree, every country has its little gems, which are havens from disaster.

aussietobe

Interestingly, those who warned of up to a 40% price-drop were experienced old-timers who'd seen it all happen before --- even as real-estate agents and the media continued to talk-up prices


Where and when did Australian house prices drop by 40%????

It has never happened!!! Maybe a couple of per cent here or there, but that statement is just plain mistruth.

aussietobe

Yes this OP has some ulterior motive to his statements: wishful thinking I believe!!

Mind you, I do feel really sorry for new home buyers in Australia. The reality is your first home is unlikely to be your dream home, especially if you earn an average income. Start small and work up. Our first house was tiny and leaked when it rained... not at 55 & 57 we have a nice home after many years scrimping to pay our first mortgage.

ABCDiamond

There is a suburb near me, where all the acreage properties were sold (at $1.x million +) and developed into 600sm blocks (at $400k for land and house).
I am pretty sure the median price for that area has dropped by at least 40%

>Trigger<

There are also suburbs near you which have had land valuations go up by around 70%...so as much as I cant see house prices dropping by 30% I cant see them rising by 70% either

hevs

Absolutely NO SIGN of a drop in S/E Melbourne. We sold in Nov 2008 for $402. Yesterday the house opposite, wayyy smaller, no pool, smaller block sold for $485....

Likewise the house across the rd from us where we live now, 3 bed, one living area...teeny block ..no study (but very nice inside) just sold for 45K more than we bought this for (4 bed/ study/home office/3 living areas) Nov 2008.

Houses here are never on the market for more than a couple of weeks before they sell and the open for inspections block the streets with cars.....

I'm not saying that there won't be a slow down in some areas, but I think holding off waiting for it to happen is a risky gamble. I'd be more inclined to buy a renovators delight...at least that way if there is a slow down you get to add to the value of your home rather that being in neg eq immediately and no way of getting back the deficit until the market rises again....

ABCDiamond

My own land valuation went up by 100% in 2006, from $90,000 to $180,000
The actual property value in that year didn't really move though

An interesting thing about Land Valuations...

2005 Council Land Valuation $90,000 General Rates $184.49 per qtr
2006 Council Land Valuation $180,000 General Rates $182.29 per qtr
2010 Council Land Valuation $180,000 General Rates $229.59 per qtr

Land valuations don't scare me at all

man_called_Horse

The place where you are going to get stung are those sleepy little coastal towns 3 or 4 hrs drive out of the metro areas, the typical Brit's dream of beach-side house with a pool in a rural picture post card setting could turn into a nightmare if all the city slickers decide to sell off their holiday home & local business is affected and the small town un-employment goes up.