If you are starting out in the property market, you would not want the property bubble to burst, you would want it to explode. Unfortunately, for new buyers, neither has taken place. This is despite ample commentary warning people to step back because it’s going to blow at any moment.
From a conveyancer’s point of view, any downward correction in prices has typically brought with it a reduction in sales activity. Therefore, it is with some relief to know that April was not the month that the so-called bubble burst.
Is it possible that the tried and true trend of lower sales activity following lower prices might not play out in the next market cycle?
When prices are going up, sales volumes usually go up. Although prices have been going up in recent times, sales activity seems to have uncharacteristically tempered. Perhaps it is because people can’t afford to upgrade and they are staying put.
In April 2017, the bubble didn’t burst and it didn’t inflate either. According to CoreLogic, combined capital city dwelling values increased by 0.01% in April 2017. In Sydney, dwelling values increased by 0.0%, i.e. flat, Melbourne up 0.5% and Brisbane up 0.6%.
The hope is that if it all blows, the result will be more property sales, not fewer sales. Although this would be against historical patterns, it is not inconceivable in this unusual market.