What goes up, must come down!”

It is generally believed that property prices go up every year by around 10% per annum. This is what the media would like us to believe. Anyone who purchased a property in mid 2006 and is selling now would appreciate that sometimes property prices actually go down.

For example in 2006 the median home price in Perth increased by 48%, in 2008 during the global financial crisis (GFC) prices fell by 10.3%. In 2009 they went up again by 9.8%. According to RP Data, the median price in Perth since March 2010 has fallen by 2.7% the worst performance of all capital cities.

What does the future hold?

Despite the predictions of some in the Real Estate industry, who are still predicting an increase of 10%, it is more likely that prices will fall or remain flat for the remainder of 2010. The European and American economies are looking very fragile largely due to huge sovereign debt.

China exports to these markets and if Europe and USA experience a double dip recession, the Chinese economy will be affected, which in turn will have an impact on Australian exports of iron ore and coal, our two major export earners.

Retail sales have been slow for quite some time and housing finance applications have fallen for the past seven months. Deleveraging (debt reduction) is now flavour of the month, which effectively means people are spending less on discretionary items, which in turn affects the economy as a whole, including employment. Fortunately the Australian economy is the envy of the world and we are likely to be less affected if the rest of the world experiences another major down turn.

For any advice on real estate or property values please call anytime, or if you are thinking of selling and would like a FREE copy of our booklet “How to Get the Highest Price for Your Property”, delivered to your door, please call us today!

Best wishes

Bernie Kroczek
‘You’re as safe as houses with us.’

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