The sky is falling – watch out for the property market crash

The sky is falling!

The experts have started switching their property market predictions from boom to gloom, pointing to the current market slowdown as the first sign of an imminent collapse which threatens to bring down prices everywhere.

I want to explain why they are completely wrong.

These doom and gloom forecasts are guilty of the “Chicken Little syndrome”, which is to expect the worst possible outcome from any situation.

It’s based on the story of a chicken who thought that the sky was falling.

When a piece of wood hit Chicken Little on the head, he panicked, crying out that the sky was falling.

He quickly attracted a large following of squawking chickens, who ran around panic struck with the prospect of imminent doom.

Naturally, the sky was not about to fall and it was only their own panic which led them to destruction as clever Foxy Loxy lured all the hens to the supposed safety of his cave, where they became his dinner.

So, could the market crash?

Not when we have:

1. a massive housing shortage,
2. record population growth and
3. the prospect of lower interest rates to come.

The only reason that price growth is slowing in Perth, Adelaide and Brisbane is because many investors are taking their profits to invest elsewhere, while the falls in Sydney, Melbourne and Canberra have occurred at the top end of town and strong growth is occurring in the lower priced suburbs.

Those doom and gloom merchants simply can’t talk the property market down, because the fundamentals are all pointing the other way.

About John Lindeman John Lindeman has well over a decade of experience researching the nature and dynamics of various types of assets at major data analysts and is a leading property market researcher, author and commentator. For more information visit Lindeman Reports.