If you’re a regular reader of these posts, you’ll be aware that from time-to-time we feel the need to remind people that market forecasts about property prices are just that…forecasts. This means that they are someone’s best guess on what the future holds, not a reliable guide that you can base important decisions on.
We thought that this would be a good opportunity to remind everyone of this after another member of the Big Four banks updated their property market forecasts last week. In case you missed it, the ANZ Bank came out last week with a prediction we would see the strongest levels of growth in house prices in Melbourne and Sydney and Melbourne since the 1980’s, with rises of between 16 and 19 per cent!
We need to keep in mind that this same bank was forecasting substantial falls in property prices this time last year. In fact, if you look back over the past year you will find various reputable economists saying at different times that prices will fall, prices will rise, apartments will fall while houses will rise, and that regional markets would outperform metropolitan markets.
Even the smallest amount of objectivity would show us that we are dealing with a market that has been impacted by a wide range of forces that are unlike anything we have seen before. The arrival of coronavirus triggered an economic recession that had a rapid impact on the nation, but that rebounded just as rapidly due to the injection of vast amounts of money into the economy through various emergency measures. The JobKeeper program, mortgage repayment deferrals, supplements for those on government benefits, the HomeBuilder grants and a variety of business stimulus programs have all helped keep the country get moving again. However, they have also created an artificial market that is still yet to reach anything close to ‘normal’ conditions.
Just as no-one was able to predict the rapid return to growth in market, no-one really knows what will happen now that some of the stimulus programs, such as JobKeeper and the HomeBuilder grant, are currently being phased out.
Make no mistake, the current property market in Melbourne is extremely favourable if you plan on selling. It is also challenging if you plan on buying, particularly in certain areas and property types.
The key to making the most of the current opportunities for sellers, as well as protecting your best interests as a buyer, is to get experienced and objective advice and guidance on every aspect of your property dealings. It’s an ideal time to give one of the team at Ian Reid Buyer and Vendor Advocates a call on 1300 400 400. And don’t forget to download your free copy of our booklet, “Fatal Real Estate Traps Exposed”, while you’re here.