The headlines are saying:
Brisbane houses have lost more value so far this year than they did at the height of the 2008 global financial crisis.
– Brisbane Times
… which actually makes it sound worse than it is.
Here are the facts:
- Brisbane house values fell 3.9 per cent in the five months to May of this year to $425,000
- Brisbane house values peaked in May last year at $450,000 before starting to slide in June 2010
- In June 2007 Brisbane’s median house price was $407,000
- Between July and September 2008, Brisbane house prices suffered the biggest fall in the country, dropping 5.2 per cent to $415,963.
There was an article in the Courier-Mail in November 2008, pointing out the above fact regarding Brisbane property prices falling late 2008. Someone left a comment at the end of that article:
Property will fall by up to 50% in the first quarter of 2010, this is avery scary fact !! propety in Brisbane and the suburbs will be hit the very worst.
– Courier-Mail, November 10, 2008
Well, that didn’t happen. In fact, property prices now, when everyone’s feeling very insecure about the property market, are still higher than they were back then (current price of $425,000 compared to $415.963 in 2008).
So real estate prices are coming down, so it’s not a good time to be buying up property with the view to selling it at a profit in 6 months. But at the same time, prices can hardly be said to be in free fall. We don’t need to panic – just recognise that prices go up but they can also come down, and that just because they are down slightly right now doesn’t mean we are seeing a real estate apocalypse.