Australia's house prices could dive by 80% - Daily Mail (7/10/2020)
Cast your mind back to the beginning of the COVID-19 crisis. What were the headlines printing at the time? What were the pundits claiming? And what were you thinking? Everything you read, and everything you think about the implications on the property market is wrong. Here's why.
The apocalyptic scenario the experts were predicting never eventuated à la the stock market. Data that is being released in relation to consumer confidence and property is turning, as can be seen by the orange line in the chart below. Melbourne property prices have turned from their peak, as represented by the blue line, and have been falling since the beginning of the year, although nowhere near as much as the experts had predicated.
Looking back in history, we can see the consumer index has been quite accurate at gauging when the right time to buy a property has been. Take a look at 2009, consumers were telling us it was time to buy - right when prices (blue line) bottomed out. During 2010, consumers were indicating it was not the time to buy (as represented by the falling of the orange line) as prices were peaking. And in 2012, we saw property prices truly hit their bottom and investors were indicating prior to, that the time was just right.
Consumers probably need a little more credit than they get. As much as the headlines do their best in catching the readers' eye, ask yourself, what needs to happen for this to be true?
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