How long before we will begin seeing prices falling?

I'm looking to get a property and was wondering whether I should hold off a bit given yesterday's rate rise as the stress on the property market is starting to show.

How long do you think it will start to affect property prices?

 

I say 6 months to see some meaningful price fall. Market sentiment should change sooner, if not already. So should be easier to buy or can negotiate more at least.

However I don’t think it affects all cities or regions in the same way, at the same time.

 

I don't think prices will fall, some areas may flat line for a bit.
I think there will be certain markets that perform really well but the nation wide property boom is over.
Some positives are

-unemployment levels are very low
-rates are going up which can be seen as a good thing and strength in the economy
-record savings in bank accounts
-predicted wage growth
-people returning back to Australia which will most likely cause more pressure on rents

 

If prices fall, how will you know when to jump in? Is there a data point you will be waiting for, or just media reports?

Do what works for you, but as a tip, most people who wait usually regret it.

 

You're already seeing it, but what you won't see are dramatic headlines like you do on the way up.

The declines in real terms will be significant, but all you will really notice is property X selling again for 5%-10% less 10+ years down the road with only the occasional jaw-dropper.

Thats been my observation when in other property market falls I've seen.

 

You will notice when you make low offers on a property and a few months later an agent will call you and see if that deal still holds.

 

It’s not certain. Also we’ve come off one of the most widespread bull markets property has ever seen. Literally every dwelling posted mass gains. Increased money supply and record low rates.

in a tightening phase with raising rates I’d apply the same advice that many applied pre-bull run “don’t time the market”. Sell when you are ready

 

It isn't too hard to.work out the bottom, look at stock on market month by month and talk to agents to find out groups through . How long you'll have to wait to see the upswing is the real question along with the opportunity cost ie buying just on the upswing is the sweet spot

 

From my perspective in many areas prices are already down from where they were. Down by 10% if I was to quantify it. Thing is the aggregate market data won't accurately capture this for various reasons and the data is a lag indicator e.g. by the time we get the data it has already happened.

Agree with this and the psychology is fascinating. Many people are apprehensive about buying in a buyer's market because they're afraid prices might fall further. Yet in the opposite market where there is no negotiation in a hot market they're happy to throw everything at it because of the fear of missing out.

 

I'm seeing a lot of asking price revisions in the areas i watch (ACT, MELB). Many properties in the 1-2M range have lowered their asking prices by around 10-15% over the last month.

However, although the odd private sale seems to be slipping through at a relative bargain price, i cant say I'm seeing the asking reductions filter through to auction results just yet. It seems the lower asking prices are clever agents drumming up interest.

The lead into Spring will be telling, we are seeing listings rise in NSW, VIC, and to a lesser extent QLD, however they are rising from an incredibly low base.

 

... and by the time there is any media reporting - and/or they are talking about it down at your local cafe - it's to late

 

High end properties maybe, but looking at the policies presented by both political parties it looks like the next few years will deliver a favorable environment for low-end properties and the average apartment in my opinion so any price falls I think will be contained to certain property types.

 

We don’t know. My last experience was waited until the fall stabilised. But keep looking and find the best bargains. Buy and sit tight. You would go through a lot of self doubts and kicking yourself for catching a falling knife. Now in hindsight it was a good decision. But holding power is important during such time.

 

I agree with you most people who wait usually regret it. That's because most people who wait..and wait...and wait...end up waiting too long and paying more in the future or they become totally priced out waiting for more and more price drops that when prices 'suddenly' take off again, they are paralysed with fear and it's game over. But for the most part, FOMO takes over and they end up paying even more. It's the psychology of it which gets the better of many people.

You asked about data point to know when to buy. It's a great question. Put it this way.

1.Assuming a buyer has no imminent need to buy asap
2. Assuming they understand how to closely monitor markets
3. Assuming they can accept the risks of not buying now.
4. Assuming they will be very proactive to follow markets looking for deals.
5. Assuming they don't have mindset issues of pulling the trigger if markets pull back X amount which represents long term value.


Assuming all that to be the case, I would prefer to wait for 6 to 12 months and monitor the 1 or 2 markets I want to buy in very closely. Also keep in close contact with agents to get feedback and gauge buyer sentiment.


For the average person who wants to buy and hold long term, would it not be better to then just buy now?

Only the individual buyer can answer that.

 

Good reply. I just think when people ask if they should wait, the response should be "wait for what exactly".

If they just are willing property to be cheaper, that is a fools errand. If they have a particular data point in mind and are waiting for that to happen - well, at least that is specific and we can consider the likelihood of that thing happening.

But just "waiting" is more indecision and procrastination, masquerading as some deep insightful reflection of thoughtful analysis.

 

Yep.

I think anyone buying property should expect that prices will zig zag higher over time. This fetishisation of making consistent returns in a straight line, or making gains in the first year is naive. I never waited for the market to cooperate with my personal goals.

 

I think the bigger issue of poor returns over time has likely a lot more to do with WHAT you bought more than WHEN you bought imo.

 

not going to pretend to understand but arent there two conflicting things going on. interest rates rise so people borrow less so u think prices will come down.

On the other hand if we entering or are in a high inflation environment then its much better to hold assets than cash and any debt can get inflated away and asset prices will rise.

 

This is what Goldman sachs is projecting,
Rate rise, rise, rise, rise, rise, rise , rise, rise => [email protected]% => rise, rise, rise, rise, rise =>[email protected]%

This is what RBA is expecting,
Rate rise, rise, rise, rise, rise, rise => [email protected]% => rise, rise, rise, rise =>[email protected]% (RBA see this as their new neutral rate)

This is what Chris Joye is projecting,
Rate rise, rise, rise, rise => [email protected]% => 15% fall => rise, rise => [email protected]% => 25% fall => can't raise, can't r raise => $400bnFRCliff => 2023@?? => Cut??

RBA interest rate rise will be determined by house prices



Rate-rise made you stop and ponder,
I will be waiting for Rate-cuts for my clues

 

Isn't this interesting.... a lot on here have gone walk about...about arguing that prices can come off up to 20% in Sydney. The evidence is certainly pointing to this....