Is a Property Crash Really Coming?

Is a Property Crash Really Coming

When any of our clients ask about a property market crash, which is happening quite often recently, we ask ‘What’s that?’. Because we certainly don’t see a property market crash coming anytime soon. 

Yes, many economists and commentators are suggesting there will be a crash by the end of this year, and even though we agree there will be a slight dip, we won’t go as far as to call it a crash. 

The Unemployment rate has now fallen to an almost 2 decade low of 3.5% and, while many see this as a positive feat, the June jobs data is an assured guarantee that the Reserve Bank of Australia will lift the official interest rate by at least 0.5 % again in August, or according to some economists, it can be 0.75% as well.

How does this affect the property market, you ask? The increase in the interest rates by the Reserve Bank of India might further stunt consumer confidence because that’s what it is intended to do. Furthermore, due to these high interest rates the property values will fall marginally, but we don’t see it falling by a whopping 15% to 20% and definitely not by 30%, as some reports are suggesting. There is no precedence of the property marking crashing by such a huge number and we don’t see that happening now as well. The largest annual fall of property prices in modern history was between mid-2017 to mid-2019, with a slide of almost 10% nationally, a whopping 5% less than the ‘current prediction’ doing the rounds. 

What we predict is a ‘housing market correction’. At the beginning of the year, in Sydney and Melbourne, we saw a slight downfall in the property values, but there is ample data to support the fact that property values are still steadily increasing in Brisbane, Adelaide and Perth. History has shown us that each market behaves differently, and that there are markets within markets – houses, apartments, townhouses and villa units – located in the outer suburbs, middle-ring suburbs, inner suburbs and the central business district of each capital city.

Furthermore, the total value of Australia’s residential housing market has reached a new record of $10 trillion. The latest figures from the Australian Bureau of Statistics confirm that the value of the country’s 10.8 million residential dwellings rose by $221.2 billion in the three months to March 2022, bringing the total to $10.2 trillion.

Our housing markets will face the following shortcomings in the new few months –

  • Low consumer confidence 
  • Fear of rising inflation
  • Cost-of-living pressure
  • Reduced borrowing capacity
  • Uncertainty about our economic future 
  • Low interest rate and low Affordability 
  • Decrease in demand

On the other hand, we see some positives coming in in the form of –

  • Shortage of good properties
  • Less properties to rent
  • Influx of international immigration
  • Historically low unemployment
  • Growth in wages
  • Strong household balance sheets 
  • Strong banking system 

While the property market will dip marginally, since we’ve moved into a next adjustment stage of the property cycle faster than some expected, these factors are expected to ease over time. 

If you are looking to invest in property amidst this ‘non’ property market crash, connect with our property consultants and get all the help and advice you need! Get in touch with us at at 02-81230180 or dropping us an email at

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