Property prices are falling, but the market is far from crashing

There have been many strident headlines in recent weeks claiming property prices are plummeting, nosediving or crashing.

Notwithstanding four interest rate rises and the impact of the Federal Budget, nothing as dramatic as that is actually happening.

To put prices into some kind of perspective, the latest data shows that median house prices have fallen to some degree in many jurisdictions across Australia, but certainly not all of them.

And, with one or two exceptions, the decline in median house and unit prices is quite minor.

The data also shows that regional markets are holding up better than the capital cities, that the smaller capital cities are doing better than the big ones and that units are performing better overall than houses. The common trend is that affordability rules.

According to Cotality data in the month of September nationally, house prices rose, slightly, in some jurisdictions, including Darwin, regional Western Australia and regional Northern Territory.

There were monthly declines, but very small ones between 0.1 per cent and 0.4 per cent, in Hobart, regional Victoria, regional South Australia and regional Tasmania.

Larger monthly decreases between 1.0 per cent and 1.6 per cent occurred in Sydney, Brisbane, Adelaide, Perth, Canberra and regional Queensland.

What this shows is that the Australian property market is not one homogenous market. It can differ substantially from state to state, city to city and suburb to suburb. And in some suburbs from street to street.

A housing “downturn” does not affect every property equally.

Investors should be eyeing opportunities

Real estate consumers appear to believe the current disruption afflicting property markets is exceptional. It’s nothing of the sort. As far as government-generated inconveniences go, this one is relatively ho-hum.

In the 1980s buyers were paying interest rates of 17 per cent. Yes, house prices were lower then, but so were wages and for many it was a struggle but the majority survived.

The doomsayer frenzy over the Albanese Government’s deterrence of property investors is a tad tedious. Forecasts of values nosediving, plummeting and collapsing are boringly predictable. Savvy investors shouldn’t be intimidated by the white noise.

Investors should be viewing the current market as an ideal opportunity to buy.

Uncertainty is understandable, but allowing headlines to dictate your next move is hardly a sound property investment strategy.

Very little has changed in the fundamentals. Underlying demand remains strong, driven by population growth and infrastructure investment, while we continue to under-build. Rental vacancy rates have hovered between 1 per cent and 1.5 per cent since Covid.

It’s a recipe for ongoing growth in prices and rents, and the Budget has turbocharged it.

Rents are already at record highs and continue to grow. The winners will be independent thinkers who see opportunities amid the political smokescreens and those whipping up hysteria.