Forecasts of a nationwide property crash are overblown, according to property analyst Michael Matusik, who says price falls in Australia’s largest capitals are being offset by regions still climbing and markets already moving into recovery.
Michael’s latest Deep Dive: Property Clock + Market Outlook report pushes back on predictions of price falls of up to 20 per cent nationally, arguing instead that the market is undergoing a period of affordability repair.
The report breaks down trends across 30 major urban centres, each sitting at a different point in its own cycle.
“Australia is now a highly segmented market, not a single national story,” Michael said.
“The country’s 30 largest urban areas each sit at a different point on the property clock with some easing, some stabilising and others still climbing. This segmentation is why the next decade will reward informed, selective buyers rather than those relying on broad national trends.”
The report attributes the price corrections under way in some markets to softer borrowing capacity and a natural cooling following the post-COVID surge.
“The correction has already begun and for many markets this should involve moderate nominal price falls,” Michael said.
“For others it will mean several years of relatively flat values while inflation and wage growth quietly repair affordability.”
Vacancy rates of between 0.7 and 1.8 per cent will continue to support rental yields and buffer values in markets undergoing price moderation, the report says.
Michael points to that tightness, along with what he describes as the defining feature of the next 12 to 18 months, as reason to expect the market to increasingly resemble the 1990s.
“The likely destination for the market is not collapse, but rather stagnation, and that is why the comparison with the 1990s matters,” he said.
“That means longer periods of limited real price growth, greater market segmentation and substantially more importance attached to local incomes, employment, affordability and genuine housing demand.”
The report identifies Newcastle-Maitland, Wollongong, Hobart, Darwin, Albury-Wodonga and Rockhampton as markets in the rising phase of the property cycle, while Perth, Townsville, Mackay, Bunbury, Hervey Bay and Wagga Wagga are approaching their peak on the back of strong local economies and tight supply.
Central Coast, Geelong, Ballarat and Bendigo have already moved past their correction and into early recovery, the report says.
“These cities are seeing improved turnover, stabilising prices and renewed buyer activity, the classic signs of a market finding its feet again,” Michael said.
Brisbane, Adelaide, Gold Coast, Sunshine Coast, Canberra and Cairns are easing, while Sydney and Melbourne remain in decline, according to the report, though Michael describes the adjustment in those cities as orderly and driven by affordability repair rather than panic.
“The emerging picture is one of rotation, not collapse,” he said.
“Australia’s housing market is recalibrating, not retreating. That means for buyers, investors and developers, opportunities still exist, but they’re simply more selective, more localised and more dependent on understanding where each market sits on the clock.”