After the boom comes the bust, but for the vast majority real estate owners and investors the bust will not cause a fuss.
Seven interest rate rises in 7 months from the Reserve Bank of Australia have dented demand and confidence but are yet to fully impact household income and spending.
However heavy falls in property prices have little impact on most long-term owners and can benefit others.
People who are buying and selling in the same market at the same time also do not suffer in the long term. For example, if they get 10-20% less for selling their property, they should pick up the new property at roughly the same discount.
The biggest reason why a bust should not worry people is because they are completely normal - especially after a boom – and historically, numbers show that property prices have always gone up over the long term.
In 20 years, Sydney’s medium house value has jumped from $472,000 to $1.19million.
BRISBANE WENT FROM $195,000 TO $832,000 according to pro Track and REI data.
If you are a typical property owner or investor, what happens with prices in the next six, 12 or 18 months really does not matter. As long as you keep paying the mortgage, you will be fine in the years and decades to come.
EXTRACT THANKS
Anthony Keane & GC Bulletin 12/11/22
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