A level playing field: Housing market corrections not crash
The attention-grabbing headlines around Australia’s falling property prices fail to take into consideration another key factor. Property fluctuations are common in real estate and after several years of skyrocketing growth, the market is now levelling back out. This means we are currently experiencing a housing market correction, not a crash.
Domain data highlights the soaring growth that has dominated the property sector, showing that Melbourne’s elite inner-east suburbs saw as much as 144 per cent growth from 2012 to 2017. This level of exponential growth has been unprecedented and has naturally slowed down.
Other factors within the marketplace point to a more positive outlook, including data from last week’s report confirming that median sales prices increased between 2017 to 2018 in some areas of Melbourne. Another indicator of the market’s fallibility can be seen in the increase in housing stock volume for sale. SQM Research figures have shown December’s property listings in Melbourne were 25.4 per cent above the year earlier.
Adding to the insight around a market correction, Steve Mickenbecker, Canstar’s group executive of financial services, shared in the Domain Price Report that existing homeowners should not be overly concerned by price falls, as they will reverse in time.