But a recent analysis from one of our favourite property gurus shows that when it comes to Australian house prices, the upswings tend to be bigger than the downturns.
In his latest Matusik Missive post, ex-Brissie property oracle Michael Matusik takes a look at Australian house price cycles dating back to 1989.
The data shows that the upswings – that is the increase in property values leading up to the peak – were always larger than the subsequent downturns – that is the decrease in property values before they plateaued and rose again.
Historic downturns have ranged from -1% following the 2004 peak, to -7% following the 2007 peak.
The current downturn is shaping up to be bigger, but will it erode all the growth we’ve seen in the lead up to our 2022 peak?
Time will tell, but Matusik thinks it’s unlikely.
“If that happens, that will bring median house values back to where they were at the start of this current cycle, being in late 2020,” he says. “A similar recoil has not happened before in the other eight cycles illustrated in this post.”
So what does this oracle forecast instead?
“I will go out on a limb here – and say that I believe the median Australian house sales price will decline by 15% from the $1.074 million peak – dropping to a median value somewhere around $915,000 in the second half of calendar 2023,” he says.
He then predicts house values should start to rise in early 2024 and it will take another year for the median Australian house sales price to break the $1 million barrier again.
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