Media scare tactics are running true to form
Have you noticed how many media outlets have begun spreading ‘doom and gloom’ stories about the property market, with a strong emphasis on forecasts of how far property values are going to fall?
Whilst the Melbourne property market is clearly going through a slight re-setting of property prices at the moment, it is important that homeowners understand two key things…
1. What we are seeing at the moment is a market ‘catching its breath’ after an extended period of record-setting growth. This should come as a surprise to no-one.
2. The fact that various media outlets are resorting to making ridiculous forecasts about how much prices may fall should be treated with a great deal of scepticism.
When you’ve been involved in the real estate world for an extended period of time you get to see a lot of ‘attention-seekers’ who call themselves experts making predictions about the future, and the huge majority of them are always wrong to an amazing extent.
Indeed, I was reminded recently of a so-called expert from the U.S. who has visited Australia several times this decade, and every single time he has forecast that our property market would crash spectacularly within the next 12 months…and we know how that turned out! There was a high-profile Australian economist who said in 2005 that home values would not rise over the next 10 years, not to mention all those commentators who said that the property price boom was over in 2013 and 2014…oops!
The problem is that the media tends to quote sources like these as reliable information. Worse still, some people will make important long-term decisions based on these ridiculous forecasts.
Never forget that here in Melbourne we live in the fastest growing capital city in the country, and every one of those new arrivals needs somewhere to live. Indeed, the State Government has forecast that we will need an average of 47,000 new homes in Melbourne just to keep up with the demand…a level we have achieved only there times so far this century.
Anyone who has studied even the most basic economics will know what happens when demand consistently outpaces supply. Of course, if you need more reliable and experienced advice that relates specifically to your property and your circumstances, don’t hesitate to give me a call on 9807 6686.
Brandon Chuah
Director
RT Edgar – Monash
Co-Founder of Bagnato Architects | Founder of The Invisible Architect | Architect, Builder, and Property Developer with 30+ Years of Expertise | Instagram @bagnatoarchitects @the.invisible.architect @dominic.bagnato
6 年Brandon Can I also add one point to your article which I agree in it’s entirety. There are actually no experts at all. In fact know one knows anything and that includes me and you. We are not gypsies and we don’t have a crystal ball. Know one can ever predict the future or the unpredictable nature of human decision making. All we can do is give opinion from our own prospective and set of values and interactions with the circle we belong to. There are those that follow expert opinion, those that follow market trends and those that choose to follow there own path. Without the latter we wouldn’t have the many innovations we now take for granted today. So do experts exist? NO We just give option and as I said earlier know one knows anything.
Commercial and Development Finance Mortgage Broker since 1985
6 年Well covered Brandon. “People have to live somewhere” ...never a truer statement.
We help developers and investors get finance
6 年The market is going through an orderly process. ?I expect a 15% price correction? Demand will slow but cannot be curtailed indefinitely with population growth; bank easing and other factors leading to a surge in 2-3 years time.?
Senior Business Development Manager, VIC/Tas & QLD, Westpac Group
6 年Definitely on point there Brandon.