Despite the gloom, Australia’s residential property market is still in good shape. Sydney is starting to flatline, driven by lower supply and rising construction costs. I published a Tiktok video on this last month, at the time, it seemed ridiculous.
But today’s data tends to confirm what I was thinking…
Anybody annualising one or three months movements is just dumb or trying to scare monger the public.
Here’s how I’m reading the market...
Vendors are pulling their properties when they can afford to hold, buyers on the sidelines are starting to step up.
Yes, property prices are down but this so far is a healthy correction, part of a normal cycle. Mean reversion taking place.
As long as employment doesn’t deteriorate too much, we will see inflation starting to moderate next year and prices forming a base for the next upward cycle.
Yesterdays inflation numbers showed only a 0.2% month to month rise in the trimmed mean, which means the pace of inflation is starting to moderate too.
Great chart as always via the NEOVAL team.
PS: Melbourne is missing from the dataset. I didn’t exclude it intentionally.