Perfect Storm: Home Price Falls Are Spreading Like A Rash!

Well, it seems the truth about the current slide in home prices is emerging, as falls are now quickly spreading to almost every suburb in Sydney and Melbourne, and also into smaller capitals too - once regarded as a one way upward bet by many - as the perfect storm of high inflation, flat wages, three recent interest rate increases and the fear of more plus the changes to popular tax concessions all hit. While on average, residential real estate prices fell just 0.7 per cent to $928,421 across the country last month, that was the biggest monthly decline since December 2022 and averages mask. Analysis from Cotality now shows that in Sydney 97 per cent of suburbs have registered price falls in the past three months. When taken over the past 12 months, that figure is 46 per cent. Similarly in Melbourne, 98 per cent of suburbs have seen the median value of residential real estate fall, compared with 67 per cent over a year. And even in the smaller capitals – Adelaide, Perth and Brisbane – between half and two-thirds of suburbs have experienced price declines over three months though over a year, no suburb has recorded price falls so far, but if trends continue, that will change. Two-thirds of Brisbane suburbs saw a fall in the average price over the three months to the end of July, according to the data compiled by Cotality, while in Perth, that figure was 57 per cent. In Adelaide, it stood at 53 per cent. Prices in the 12 months to the end of April, before the last budget was announced, rose 26 per cent in Perth and were up 19.7 per cent and 12.2 per cent in Brisbane and Adelaide. Of course there is some demand from First Time Buyers, but as I highlighted in a recent post, there are both reasons to consider buying, but also reasons to wait – why buy now if you can buy for less later. The other demand driver, migration is looking a little wobbly now as even Labor appears to be considering a tightening of the rules, for political reasons of course. Buyers are already shy as more falls are predicted. National Australia Bank, last week increased its forecast decline in prices for Sydney this calendar year from 6 per cent to 10 per cent, and for Melbourne from 7 per cent to 9 per cent. Median days on market picked up in August to 34, a five-year high. The number of attendees at open inspections held by Ray White agents nationally over the week to Saturday fell to two from 2.2 a week earlier. The figure was nearly double, at 3.8, at the same time last year. REA Group told investors that property listings would be “flat to down low single digits” this financial year – which is better than some had been expecting. Many across the property industry are now outwardly concerned that without further Government intervention, price falls may accelerate, with REA Group, the country’s largest real estate portal, reporting surging listings in the smaller capitals, suggesting sellers were trying to get ahead of a market on the edge of a slump. I see that in my surveys, too as investors switch to other higher yielding asset classes in reaction to tightening of rules and a compression in real net investment yields. If you are buying your home in Sydney’s contentious market, you do not need to stand alone. This is the time you need to have Edwin from Ribbon Property Consultants standing along side you. Buying property, is both challenging and adversarial. The vendor has a professional on their side. Emotions run high - price discovery and price transparency are hard to find – then there is the wasted time and financial investment you make. Edwin understands your needs. So why not engage a licensed professional to stand alongside you. With RPC you know you have: experience, knowledge, and master negotiators, looking after your best interest. Shoot Ribbon an email on info@ribbonproperty.com.au & use promo code: DFA-WTW/MARTIN to receive your 10% DISCOUNT OFFER. Find more at https://digitalfinanceanalytics.com/blog/ where you can subscribe to our research alerts Please consider supporting our work via Patreon: https://www.patreon.com/DigitalFinanceAnalytics Or make a one-off contribution to help cover our costs via PayPal at: https://www.paypal.me/MartinDFA We also can receive bitcoins at: 13zBL1oRib9VJu8Uc9zUGNhxKDBBgUpDN1 Please share this post to help to spread the word about the state of things.... Caveat Emptor! Note: this is NOT financial or property advice!! 🚨BEWARE OF SCAMMERS🚨 As there are accounts impersonating Walk The World in the comments on YouTube, note that our comments will have a distinguishable verified symbol. And remember that we will never message you asking you to give us money or talk to us on other platforms such as WhatsApp or Telegram