The bubble hasn't burst

The RBA recently noted about four per cent of the nation’s residential properties changed hands last year — half what is was a decade ago. And transaction levels tend to dip when the market gets tougher.

Given the bloated stock levels tracked by groups like RP Data, Australian Property Monitors (Fairfax-owned) and SQM Research, it’s clear that many, many, many properties are being listed but not sold. That, of course, threatens to put downward pressure on prices.

But here’s the thing — the long-heralded crash hasn’t happened. House values dropped by 4.5 per cent nationally in the year to February, but there was no catastrophic across-the-board fall despite all the predictions there would be.

 

Property Values, Year to Feb 2012
  House Unit
Sydney -2.8% -2.4%
Melbourne -5.6% -4.1%
Adelaide -3.3% -7.1%
Perth -4.5% -5.8%
Hobart -9.6% 6.3%
Darwin -4.9% -6.1%
Canberra 0.8% -4.3%
Brisbane -7.9% -5.0%
National -4.5% -3.5%
Source: RP Data-Rismark

 

Some areas will be protected from the worst effects of a collapse by virtue of their features, while others will inevitably been slammed due to the sum of their weaknesses.

There is no all-encompassing property market that can be said to be performing uniformly. It’s a fiction — a convenient narrative device.

Story credited to Twitter, Domain and The Age.