Leading Economist Says We Should Expect More Property Price Declines in Sydney and Melbourne
About the author
Jane Slack-Smith has been named one of the Top 10 Property Experts in Australia by Money Magazine, one of the Top 4 Financial Influencers by Qantas and been awarded the Australia’s Mortgage Broker of the Year twice.
Throughout 2018, Sydney and Melbourne have experienced property price cooling. And now, a leading economist claims that the worst is yet to come.
AMP Capital Chief Economist Shane Oliver delivered the gloomy news.
He discussed the issue in a recent statement on the AMP website.
“Property prices in Sydney and Melbourne are likely to see top to bottom falls of around 20%.”
He points to “credit conditions tighten, supply rises and a negative feedback loop from falling prices,” as key issues.
This would mean a further 15% decline on the 5% fall we’ve already seen this year in Sydney.
This casts a pretty downbeat outlook for the market. However, I have some news that could buoy your spirits.
It’s important for those interested in property investing to remember that there are markets within markets. While Sydney and Melbourne experience a downturn, there are still investable suburbs in both cities, yes there are suburbs still going up in value. In fact now may be the time to act! Sophisticated investors may even be able to benefit while others pull out of these markets. Remember what Warren Buffett said, “Be Greedy when others are fearful and fearful when others are greedy”. Great advice from someone who knows!
It’s also important to note that this is simply a potential scenario. Oliver also agrees that there are regional centres in both cities that may continue to see increases.
Still, it’s important that investors take the potential for such a large decline into account.
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