PHOTO: Sydney, Australia
Media outlets have published various articles over the last week with a range of tantalising headlines that declares something along the lines of: RBA predicts up to 40 percent drop in house prices.
Now, if you’re a first homebuyer or someone who is keen to get your foot on the property ladder, this might seem like good news. Finally, Sydney prices might fall back into reasonable territory!
Wrong – it’s just not going to happen.
Those who own their own home or have an investment property may read this type of headline and find themselves worried and anxious about the value of their properties – yet another thing to fret about in 2020.
These headlines are successful in that they generate “clicks”. But they also feed into people’s fears and insecurities. As a community, we talk about RUOK? Day but it’s important to do more than talk – when we see an opportunity to educate, inform or support others so they sleep easier at night, then it’s our duty to take it.
As a property and finance journalist with more than 15 years experience, who has interviewed more economists, bank executives, industry CEOs and researchers than I’ve had hot dinners, I’ve been exposed to a broad range of insights and expertise about the drivers of growth and influences over the Australian property market.
And so, before you get too concerned, I’d like to offer another viewpoint.
What will stop property values from falling 40 percent?
Australian property prices are not likely to collapse by 40 percent – and the latest research from the Reserve Bank of Australia (RBA) did not suggest that they would.
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