While investors still see property as a growth asset, with zero gain as a negative towards their investment, property economist with Suburbanite, Anna Porter, disagrees, given the current environment.
“Many Australians have become so accustomed to the property market going up so much in the past five years they forget that every market has its corrections and downturns,” said Ms Porter.
With a changing market, however, Ms Porter believes investors need to change their expectations when it comes to property prices.
With an environment that has been peppered with banking royal commissions, elections, a tightening lending environment and more changes of prime minister than we change seasons, the property market is expected to take a tumble, said Ms Porter.
“If investors can maintain a neutral position, or even some modest growth, then they should see that as a good outcome for the past few years,” said Ms Porter.
According to Suburbanite’s research, this year saw a 37 per cent increase in the number of suburbs where values fell compared to the same report last year.
“Liverpool’s unit market saw declines of 7 per cent. We’re seeing the same thing Brisbane has been seeing for years starting to filter through here. There is an oversupply of units,” said Ms Porter.
How are regional areas being affected
The mining boom is slowly coming to an end, meaning regional towns in Western Australia and Queensland prices are falling sharply.
In Queensland, the suburb of Mount Isa has seen a decline in house prices of 27.9 per cent, which is a direct reflection of business in the area continuing to wind down.
“Regional mining towns are great when there’s a mining boom, but if you go regional, you have to think what happens when the market turns that corner,” said Ms Porter.
“The mining city of Kalgoorlie has been hit hard in recent years, and according to my report, the nearby town of Kambalda has seen house prices fall up to 35 per cent,” said Ms Porter.