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28/10/2020

Where are all the doomsayers now?

When COVID-19 first hit our shores, all the prophets came out and proclaimed that the Australian property market was going to be shredded by up to 30% or more. We would all right-off hundreds of thousands of dollars off the value of our homes and Armageddon was finally here.

Many of us who’ve spent more than a decade or so in the industry laughed this off because we’ve heard it all before. There’s a reason why we use a 10-year cycle to determine the ‘average’ success or failures of any given property investment. Key word ‘cycle’. During any given 10-year period, there will be peaks, troughs, ebb and flow. It’s what balances out in the wash that’s important, not the spin cycle itself.

Whilst Sydney and other capitals around the country have had but a blimp, we thought we’d look at the situation in Melbourne – the hardest hit due to such unprecedented conditions.

Even with an enforced lockdown due to the Government’s botched quarantine program, Victoria’s capital’s prices are only down approximately 4.6% since the pandemic hit us in March. Yet prices overall remain around 5% higher than the same time last year.

Rental vacancies are nowhere near the doom and gloom numbers of some ‘prophets’ with REIV recording a healthy 3% vacancy rate in Melbourne and 1.8% in regional Victoria.

Clearance rates around the country last weekend were as follows: VIC 78% (1,442 sales), NSW 84% (2,417 sales), QLD 64% (1,402 sales), SA 81% (441 sales), WA isn’t giving us a percentage but according to REA, they had 628 sales, NT 83% (147 sales), ACT 87% (147 sales), Tasmania 100% (186 sales).

The moral of this story? The longer you wait, the more you’ll pay. Unless you see the sky falling or a meteorite the size of Texas heading our way, the next time the ‘self-proclaimed prophets’ come out of the woodwork, ignore them and start looking for opportunities.