Are you sick of house price predictions changing every month?
Almost every week there is a new housing price growth forecast. And they are all really different.
They all talk about about ‘Australian’ house prices, and almost never break down their analysis by specific location.
Here’s a case study by a major bank.
“We still see Australia’s house prices falling, but now only -5 to -10 per cent.”
Now let’s look a Brisbane to show how meaningless this statement is.
The ‘median’ house price in Brisbane is $495,000, the ‘average’ price is $550,000 but a recently renovated four bedroom house on a 500m2 to 600m2 lot in Brisbane’s northern suburbs is currently selling for between $900,000 and $950,000.
The values in the first two samples are pretty stable at present, but in the third they are rising fast, as demand is high while supply of that property type in that location is pretty weak.
The demand to supply balance is different across Brisbane, what to speak of across Australia.
This is super important to know, because it enables us to be very clear about what property markets we are talking about.
There are many housing market market, some are doing it tough right now, most aren’t.
As mentioned, how a property market is preforming, entirely comes down to supply versus demand in the streets or suburbs.
There is no national property market, there is no capital city or regional town market either.
There are only suburbs and they differ a lot from each other.
To “buy well” you should define which housing market you are looking at and analyse that.
Ignore the generalisations and the “experts” that talk in generic terms, no matter if they are Chief Economists of major national banks.
Unfortunately, in property markets, it is the simply things that get measured, and the hard things – where money is made – are misunderstood.
Play chess, not snakes and ladders.