Housing price growth ‘decelerating’: What a word!

Adam Cursio

Director

Here’s a short excerpt from a recent article about house prices from the Sydney Morning Herald, which made me laugh.

House prices continue to decelerate from what is likely to be the last property price boom Australians will see for many years, says Bank of America Merrill Lynch, adding that investors may be second-guessing the validity of negatively geared investments.

March data shows that median capital city prices rose just 0.2 per cent, with annual growth decelerating to 6.6 per cent year-on-year. These figures are down from a July 2015 peak of 11.6 per cent year-on-year and 11.9 per cent in April 2014.

Source: Sydney Morning Herald

I like the use of the word ‘decelerate’.

Excuse my ignorance but have we not witnessed share markets collapse time and time again? I’ve see two huge collapses in my life. But I’ve never seen house prices plummet.

When large financial institutions state that a slow down in growth in house prices is a reason to be cautious, it would be wise to read between the lines.

With the population consistently rising and infrastructure being forever tested I would ask clients to keep an open mind about what this data actually means and how it might affect you.

We all have an opinion on house prices and so we should. Generally our home is our largest asset and a decrease or increase could mean the difference between financial success or failure. But remember, every home sits in a different market within a market, and units and apartments are again in another dimension unto themselves.

So to the institutions and the media we say calm down. We do not know what will happen, we just ask that our clients don’t panic or react to anything the media says as there is always an alternate motive at play.

If you would like to discuss the housing market and how the price of your home affects you, get in touch with us. We’d be happy to chat.

Any financial advice provided is general in nature. It does not consider your needs, financial situation or objectives. You should consider the appropriateness of this advice to your circumstances before you act on it.