Property prices drop by 20%!
Well, as we all know they like to emphasis the negative by telling us that the property prices are collapsing.
The media pushing out headlines like…
RBA tips property prices to drop 20 per cent amid interest rate hikes
RBA predicts property prices to drop by 20%
Property prices to fall up to 20 per cent: RBA
What the media didn’t tell us is, that the predicted RBA price drop of 20% is based on a worst case modelling scenario. Which hasn’t even been published by the RBA officially. Furthermore, RBA got house price movements wrong several times in the past. This is very bad journalism and analysis by the media.
SQM Research numbers show that house prices in Brisbane have increase for the last month by 0.4%.
Here a some number of other capital cities: Sydney 0.1%, Perth 1.5%, Adelaide 1.4%.
There are various reasons that property prices will rise in 2023. There is a serious shortage of real estate in Australia. We don’t build enough new homes to cover the demand. The current rental shortfall is a clear indication of that. On top of that, overseas migrants and international students are coming back into our country. And, the federal government is looking to lift the number of migrants to fill job vacancies. This will put pressure on rents and on property prices in general.
These blanked national wide forecasts don’t consider that different markets doing different things at the same time. We still have the affordability factor in Brisbane compared to Sydney and Melbourne. There is also still a huge volume of interstate migrants coming into Queensland. And, let’s don’t forget that the Olympics are coming to Brisbane, which always propels the performance of an economy and property market as well.
All forecasts that prices will drop by 15% to 20% just because interest rates are rising will be proven wrong again as they have been many times in the recent past. This is a Kindergarten mentality, since it is a lot more complex than that.
Feel free to checkout my blog “Rising interest rates! What now?“
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