Residex CEO John Edwards said the outlook for the Australian property market was not as gloomy as some forecasters had predicted.
He said the recent rate cut by the Reserve Bank of Australia (RBA) was a positive sign, and the latest figures show “there’s still money to be made in the market”.
“Yes, I said some time ago that the market might be looking at a once in 100–year event,” Edwards conceded in a recent report. “However, since the RBA’s move to cut interest rates, I’m less inclined to think that and believe the RBA has acted to manufacture a soft landing.”
Median house prices over the last quarter were down in most state capitals, as well as 1.3% nationally, according to Residex. But Edwards said these drops were only minor.
“I don’t think the housing market is going to collapse as it has in the US, nor do I think you will see prices falling away to the levels these commentators suggest,” Edwards said.
The Residex report said looking further back over the last two years, state capitals Adelaide, Brisbane, Darwin, Melbourne and Perth had averaged double digit growth. “That was simply unsustainable,” Edwards said.
Over 10 years, the national median value increased 8.6%, the report said.
“These statistics show this isn’t anywhere near a collapse in property values, it’s the market positioning itself for a soft landing,” Edwards said.