How long will the property downturn last ın Sydney and Melbourne?
Despite all the developments, Sydney and Melbourne are behind the real estate market.CoreLogic’s head of research Tim Lawless believes that the capital cities are still up for the biggest downturn they have seen. Well, this situation mean for real estate?
According to Mr Lawless, property values in Sydney are down by nearly 10 per cent after they peaked back in mid-2017, while Melbourne’s property values saw declines by an average of five per cent.
According to experts, the decline in the real estate market in both states will continue.
“The market’s in a downswing after very long upwards trajectory. We should expect this housing downturn to be more substantial than what we’ve seen in the past, mostly because the past is a really low benchmark.”
“This will be the biggest downturn the Sydney market’s ever seen, and our data goes back to the 1980s, during the last recession. During the early 90’s, we saw Sydney values fall by about 10 per cent over about 24 months. Sydney’s almost down by 10 percent now.”
“I think we’ll absolutely see Sydney record a larger decline than 10 per cent—probably more like 15 per cent, and over a long timeframe as well,” Mr Lawless explained.
The recession in the real estate market is due to economic uncertainties.
“We haven’t seen the normal catalysts of a market cycle just yet, which is typically monetary policy changes or economic conditions either worsening or improving.”
According to experts, the real estate market in Sydney and Melbourne will be on the decline over the next 5 years.
Mr Lawless said: “What happens with the economy? Do we see any changes to taxation policy? What happens with our population growth? There’s a lot of factors that could obviously impact the marketplace.”
“Gut feel is we’ll probably move through the downturn sometime in 2020. From there, we’ll start to see a gradual upswing in prices. Sydney and Melbourne will be quite similar, even though the population growth and the economies are a little bit different. I think we’ll probably see both markets behaving quite similarly.”
“If you find out where the bottom is, you’re probably guaranteed a 15 per cent uplift in about 18 months to 2.5 years,” Mr Lawless concluded.
Sevdenur Demir / realestatecoulisse.com
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