Is the Australian property market going to crash?
Everyone’s talking about it. Everyone has her or his opinion on this topic.
And yes, everyone is asking, is the Australian property going to crash?
Before you panic, let’s get things into their proper perspective.
In this short video, Wealthi co-founder Domenic Nesci identified the three tiers or levels of the property market – each with its own distinct characteristics and price range.
Once you know these different tiers you will have a better understanding of the property market.
Going back to the question – is the Australian property market going to crash? There’s no point rushing to conclusions.
Domenic says depending on which tier of the market you’re looking at, there will be price disparities.
For example, the middle and upper tiers of the market may be seeing some softening in prices. A recent news article for instance reported that an existing home that sold for $1.2 million a week ago (based on the publication date) was valued at about $1.1 million a few days later.
On the other hand, Domenic pointed out that apartment prices in some inner-city suburbs in Sydney are still rising.
“What we’re seeing is that there may be price corrections in some segments of the market,” Domenic says.
“Different areas of the market will perform differently,” he adds.
A major financial news site recently reported on the top Australian suburbs where apartment prices have actually risen. According to the report of the 899 suburbs analysed, units outperformed houses across 489 markets by up to 8 percentage points.
This was based on a CoreLogic report that showed rising rents are attracting property investors into units and apartments.
Who will benefit from this price divergence?
In this analysis, Domenic shares some interesting views on who will benefit from the price divergence.
If you are looking for a discount, you may have to look at the high end of the market or those above $1.5 - $2 million property where competition will be less. And sellers may also be open to offering discounts, up to a point.
If you are a property investor looking for affordable and high-growth investment opportunities, there may not be a lot of bargains to pick from.
However, with the government grants aimed at property buyers, you may have better chances of getting into the market now.
If you want to jump on a call with our Investment Specialists and see 3 key examples which we think are great investment opportunities at the moment, feel free to pick a time below: