Things are changing, no doubt, but it comes down to what you're looking to buy and where you're looking to buy. Relying on the media's headlines will get you nowhere, as they're there out to sell a story - a nationwide statement isn't necessarily relevant to the market you're buying in.
Let's look at capital city house prices
The media talks about property prices going backwards and the numbers are constantly changing. However, if you look at the results as at 30th September, 2022, only Sydney & Melbourne's median value is down by 6.0% and 3.9% respectively, compared to this time last year.
All of the other capital cities across Australia have a median house price much higher than they were a year ago. Leading this trend is Adelaide at +19.2%, Brisbane +13.4%, Darwin +6.2%, Perth +4.1%, Canberra +4.0% and Hobart +2.0%.
What this tells us, is that whilst property prices may have tapered down slightly, we're still above the levels we saw only 12 months ago and this is a natural occurrence of any property cycle.
We've seen it time and time and again and we're going to see it in the future too. The growth we've seen over the last 12 - 24 months wasn't sustainable forever, so a correction was very well expected and needed.
Local property prices
Instead of reading the general headlines, take a look at what is happening in your local area or the market you're looking to buy an investment property in.
You can do some basic research online for free using websites like Your Investment Property Magazine, realesate.com.au and domain.com.au or speak with local agents in the area for more detailed information.
If you're looking to purchase in high sought-after areas, you'll probably find prices are still holding quite strongly.
The natural property cycle
As mentioned above, the property cycle is in perpetual fluctuation. If you find yourself worried by the headlines, it helps to take a step back and look at the bigger picture.
Yes, there is a slight property 'softening' in some parts of Australia at the moment, but this is not significant when you look at the unprecedented growth over the past few years.
All the statistics point to the fact that property always goes up when you look at the Year On Year (YOY) statistics. Core Logic numbers have shown that in the 25 years between 1992 and 2018, house prices rose 412%. That's why property is one of the safest bets when it comes to long-term investing, as long as you choose the right property, in the right market.
As seasoned investors, we look at what's called the 'property clock' (shown below). This tool allows us to monitor the current performance of a market and helps us determine whether now is a good time to buy. Whilst one market may be in a 'slowdown' phase, another may be in the 'recovery' phase, which is an ideal time to buy.
Should You Buy Now?
No one has ever created wealth by sitting back and waiting.....just think about that! I believe the best time to buy was 10 years ago and the next best time to buy is today.
If you have a decent borrowing capacity, a secure job and income and a healthy buffer, then you're probably in a good position to start your property investing journey. Seek advice from your account or other professionals to discuss your personal situation.
Remember, prices will usually always rise in the long-term. If you set some clear goals and implement a bullet-proof strategy, your investment will increase in value to help you achieve your financial independence.
Are You Thinking Of Investing?
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I hope all of this info has been helpful and wish you all the best on your property journey. Please don't hesitate to get in touch if you have any questions.
Disclosure: The information contained in this blog is our personal opinion only and is not to be taken as financial advice, as we do not know your financial situation. Please speak with your accountant or any other licensed professional for specific advice based on your own personal circumstances. We will not be held liable for any losses.
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