The easy answer is probably yes, but the question is flawed. As we know, Australia is not one market and each state, city and even suburb performs differently. For example, Melbourne grew by just 3.9% over the last year yet the regional centre of Geelong grew by 14.7%.
Further, the Melbourne and Sydney markets make up over 60% of all housing value in Australia. This means that what happens in Melbourne and Sydney strongly influences the Australian property market figure.
The current property cycle is no different to cycles before it. Contrary to popular belief, at the top of every cycle there is a downturn. Take Sydney for example, Sydney grew by 79% over 4 years and this year reduced by just over 5%. That means, on average, that if you have owned a property in Sydney for at least 5 years your value has gone up 74%! Hardly anything to be concerned about.
So what will happen to the market moving forward and how much will it reduce? The fact is, population growth is still at record levels and according to BIS Oxford new construction starts are to reduce by a further 30% in the coming years which will just exacerbate the issue.
More demand and less supply should put a floor on prices. After all, those extra people are going to need somewhere to live and until supply increases again substantially that won’t change.
At Nyko, we believe trying to pick the bottom of the market before buying is impossible. The only time you can confidently pick the bottom is when the market has started to rise again.
I will leave you with the best quote I have found on this topic, an ancient Chinese proverb.
“The best time to plant a tree was 20 years ago. The second best time is now.”
And that quote is true for trees as it is for property.