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A leading real estate expert has raised concerns about the long-term stability of the booming property market.
Real Estate Gym founder Tom Panos would not be surprised if the market dropped off in two weeks.
The market hit a bump in 2017, and property prices dropped across Australia. Then, earlier this year, the tide began to change, and fast.
With the unexpected results of the federal election, and the banks lowering interest rates and making it easier to get a loan, strength returned to the market, Mr Panos told Real Estate Business.
“All of a sudden, it created the quickest turnaround in living memory,” he said.
“The market was down and out, and in a matter of six to eight weeks, we saw Sydney and Melbourne rebound strong, nearly rebounding the losses they suffered in two years.”
The strong rebound in property prices saw a lot of property owners rush into the market to try to get in and cash out.
“They were concerned this is going to be the height of the market for some time,” Mr Panos said.
As a result of the spike in prices, property buyers who once feared of missing out now have patience because prices grew too quickly.
Mr Panos believes the market hit a plateau two weeks ago.
“What will be interesting is to measure the [auction] clearance rates over the next few weeks,” he said.
Raine & Horne Newtown director Duncan Gordon believes market conditions will remain strong until supply and demand even up.
“Probably not this year, but next year you might start to see the result,” Mr Gordon said.
“That is why I’ve been telling sellers to get on the market now. This market isn’t going to last forever.”
If people think prices will continue to climb, it is not going to happen, he said.
“We are seeing a good amount of buyers and buyer inquiries, but a month ago it was a little stronger.”
However, Starr Partners boss Douglas Driscoll said he would be surprised if Sydney property prices did not increase by at least 5 per cent next year.
“We saw 60 per cent growth across Sydney in the five-year period before 2016,” Mr Driscoll said. “Then in 2017 until April or May this year, we saw 17 per cent come off property prices.”
With listing numbers in the Harbour City are at a 10-year low, Mr Driscoll believes prices are going to come back.
“I think we are going to see ongoing, modest growth,” he said. “I don’t think it is going to increase at the rate it did during the boom ... but I think we will see prices continue to increase.”
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