I’ve been considering buying a house here in Australia, but can’t seem to make up my mind on where house prices are going, and whether or not this is a good idea. Seems there’s just as many predictions of prices falling as there are of prices skyrocketing. And while prices have dropped significantly in the US and UK, it’s hard to say whether Australia will follow suit, especially given the resources boom here and apparent lack of supply.
As an example of the diversity in current forecasts, this link talks of Western Australian property prices jumping 20% a year from 2010, while this one says that Western Australian house prices will fall 10%.
Anyone else looking to buy their first house in Australia? Any opinions on where property prices are headed?
According to those who seem to be in the know, the median house price has dropped in the major centres like Sydney and Melbourne over the last two quarters. Recent interest rate reductions mean that housing ‘affordability’ is probably at its best for quite a few years
In terms of where the prices are headed? Who knows! If anybody actually had that information they are either psychic or have insider information/ability to manipulate the market substantially…and either way, they ain’t gonna tell.
Also, making any predictions while the o/s financial markets are misbehaving so badly is probably quite unwise (that’s economist-speak for bloody stupid).
C’mon kambuckta, this is the Straight Dope! We don’t give up that easily!
I believe housing prices have fallen about 6% this year here in Perth, but I still need to know in which direction they’re heading. They may have dropped, but they’re still nowhere near affordable…
If you want my honest, unbiased and totally unfounded opinion…I wouldn’t have a freakin’ clue.
Commonsensically speaking, you’d assume that the price of housing was actually pricing itself out of the housing market, and that it would HAVE to drop. People on average incomes have less hope of buying a derelict fibro cottage on a pocket-handkerchief sized block on the grungy urban fringes than flying to the moon.
But with the world markets going haywire, a lot of mum and dad/retiree investors who are watching their shares and super-funds plummetting might choose to take their money out of such funds and invest in property…which will then send the housing prices skyrocketting again because of increased demand.
I reckon that if you can afford to buy a house at the moment, jump in. There’s not been a better time for quite a number of years, and who knows what the future holds.
My husband and I bought our apartment in mid-2006. The experts were united that inner city apartments were a terrible investment because of oversupply, and that the market would remain flat until 2008 at least. We bought anyway, and squeaked in just before the inner city boom that nobody predicted. Moral of the story is that the experts who have access to all the data and market information can - and frequently are - wrong, so what chance do we mortals have?
The newspapers are saying that auction clearance rates have gotten a bit of a bounce thanks to the interest rate reductions and expected future reductions. I don’t know about the WA market but in my area houses are definitely down from last year’s ridiculous prices. Hideous 2 bedroom apartments that were going for 400k+ last year are fetching maybe 350-380k.
So the answer is - I don’t know. I mean, I could give you a layman’s guess but that would only be relevant to my pocket of the country. And the suburbs you are looking at would have a huge bearing - here, I probably could find you a well-located inner city suburb that had 15% growth last year (attributed to Gen Y wanting to live close to work), a prestige suburb that had 30% growth (I remember reading this was on the back of the strong domestic market, with high bonuses paid out to CEOs and executives), and an outer suburb that didn’t even keep up with inflation (lots of supply and rapidly increasing petrol costs).
I have a unit in Sydney that I am paying off and living in. I am considering investing in Success in Perth next year. It may be more expensive than previous years, but I think the rental boom will continue in Perth (I grew up in Fremantle, how I would love to buy there )
Ah. Join the club. I’d hold out. New government means a new mining boom (uranium) which means more people moving to Perth which means prices will jump again by the end of next year. Now is the right time to buy, I think, while investor confidence is low. I’ve got a second property in a nice part of town and I’m hanging onto it for the mid-to long term because if we were to sell now despite interest rates going up i think we’d really, really regret it.
My wife and I spent six months earlier this year searching for an affordable 3 bedroom house, without any luck, and as we were re-focusing to 2 bedroom places, things went pear-shaped at work and I had to resign, which has put a hold on any house-buying for the meantime.
My prediction is that house prices will just keep going up; they’re not making any more land and most of Australia is uninhabitable desert. The problem is that infrastructure isn’t keeping pace with new housing developments; we could probably afford a decent house further out west but it would take hours to drive to work and there’s usually nowhere local to get a decent job, unless you want to work in a bakery, petrol station, newsagent, or IGA- which won’t pay enough to cover the mortgage anyway.
Or we can continue to rent, which is cheaper but doesn’t give us any equity. It’s a tough situation to be in at the moment.
They may have dropped, but they’re still nowhere near affordable…
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