Melbourne’s property market has seen its trough in the second quarter this year. It is now in its recovery phase. Sydney follows the same pattern.
Towards the end of 2018, the property market for Melbourne and Sydney slumped to the extent that lots of commentators thought it was comparable to what happened during the GFC or even worse. There were again a number of forecasts made by some well known institutes, economists, banks, etc. Some of these forecasts came with numbers, others were only descriptive. As we pointed out in the past, those forecasts are not reliable (“The forecasts and the media are causing turmoil”, 10th January 2019).
Most of those forecasts had a gloomy view about the 2019 property market. Most of them predicted that the property market would only start to recover in 2020 or even 2021. A couple of them predicted that the market would drop 40% from the peak, which now look unreasonable and unprofessional.
We must give a shout-out for the forecast conducted by Domain. It is accurate and quantitative. Not only it accurately forecasted the degree of the correction, but it also accurately predicted the timing of the trough. This is an excellent work, which should be envied by other commentators.
Our view about the property market for 2018 and 2019 were recorded in our previous blog publications and the consulting work commissioned by our clients:
“What might happen to Melbourne’s property market in 2018“, published on 17th October 2017.
“Government actions to improve housing affordability vs the next market boom“, published on 6th September 2018.
“2018: Australian property market soft landing“, published on 22nd December 2018.
“The forecasts and the media are causing turmoil“, published on 10th January 2019.
Based on Australia’s housing economy and policy environment, our overall view was that this correction was a soft landing engineered by the government, and there might be soon another property price boom if the government does not quickly increase the housing supply in the middle ring suburbs of Melbourne and Sydney. The media and the forecasts were causing potential sentiment turmoil in the early 2019 which should be counteracted by the government to support the market sentiment. Based on these assessments on the property market, our clients were advised that the market would most likely be recovering in the second half of 2019.
Our analysis and forecast of the property market have been verified by what has happened up to date. Clients who have actioned on our advice are now ahead of the game and set them up for the next success.
*An accurate diagnosis of the current market condition can always shed light on the decision making for the market participarts. For further inquiries, please contact us to book in a consulting session (http://www.realestatelogic.com.au).