The media is having a field day with gloomy house price forecasts.
Recently the NAB cut its house price forecasts for the next 2 years citing weaker than expected residential markets in Melbourne, Brisbane and Perth have added to ongoing weakness in the Sydney property market.
Sounds ominous so far , doesn’t it?
NAB, also now expects more severe falls in unit prices this year and next than it was predicting, and NAB chief economist Alan Oster warned:
“Any further tightening in lending standards or additional changes to government or prudential policy to address affordability or financial stability concerns are likely to have an impact on these forecasts,”
The poor performance of our housing markets is directly linked to credit availability with new loans to property investors falling to their lowest total in more than two years in May.
So how bad is it going to get?
The following 2 tables tell the story and if that’s really as bad as it’s going to get I’d be very happy.
A fall in the Sydney median house price of 3.7% this year and then only 0.7% next year is nothing to worry about.
Not after the long run up in prices over the last 5 years.
And Melbourne house prices falling 2.3% this year and holding steady next year doesn’t sound anywhere near as the headlines scared me.
And unless you’re selling a short flat period of house prices is not something that should rattle property investors, especially as many properties will outperform these averages, just as many will underperform these.
On the other hand, if you’re a property investor looking at getting a foot hold in the market, now’s a great time to take advantage of the opportunities that will look cheap in a couple of years.
If you’re looking for independent advice, no one can help you quite like the independent property investment strategists at Metropole.
Remember the multi award winning team of property investment strategists at Metropole have no properties to sell, so their advice is unbiased.
Whether you are a beginner or a seasoned property investor, we would love to help you formulate an investment strategy or do a review of your existing portfolio, and help you take your property investment to the next level.
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