Is this really how much house prices will fall?

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. Houseprices

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. 3d Image Of House With Graph Falling

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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Michael is a director of Metropole Property Strategists who help their clients grow, protect and pass on their wealth through independent, unbiased property advice and advocacy. He's once again been voted Australia's leading property investment adviser and one of Australia's 50 most influential Thought Leaders. His opinions are regularly featured in the media. Visit

'Is this really how much house prices will fall?' have 2 comments


    September 29, 2018 Sasa

    An average fall of 3.2% is just an average- certain areas in Sydney have gone up and others have actually decreased significantly. Price falls of 10-15% in certain areas aren’t uncommon and this is just the start. Too much money has been lent to people that can’t afford it. There are many reasons why prices will decrease over the next few years. 1. Greater banking regulation and stricter lending criteria. 2. There is lots of supply becoming available especially in Sydney. 3. Labour will likely win next election and may decrease incentives for housing investors. 4. Interest rates are going up- this will occur even if official interest rates aren’t increased as banks get significant proportion of their funding offshore. 5. Many mortgages are currently interest only and will transition to principal and interest over the next few year. Some owners will not be able to afford higher repayments and will be forced to sell.


      Michael Yardney

      September 29, 2018 Michael Yardney

      Your’e absolutley right Sasa – a few property owners will get into trouble, but this is always the case at this stage of the cycle – but they won’t be enough to move the market significantly


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