A shortage in stock for sale across the country has driven up prices in several capital cities, creating the idea of a ‘bubble’, according to a leading real estate group's CEO.
Speaking at a media briefing yesterday, CENTURY 21 Australasia’s owner and chairman Charles Tarbey said talk of a property bubble in Australia was misguided and misinformed.
Mr Tarbey said for a boom to occur, results would have to be consistent across the country.
“A lot of people are talking about how we’re in a boom market and it’s just not true,” he said. “It doesn’t matter what you see out there with the auction clearance results – we’re not in a boom. We’re that far from it, it’s ridiculous.”
Mr Tarbey said areas that have experienced record prices were simply subject to a shortage of stock. He highlighted that real estate markets across the country are actually at different stages in the property cycle.
“A boom is when auction clearance rates are sitting consistently in the 80s right across the country on a national basis,” he said. “That has happened once this year. The rest of the time it has been in the 60s and 70s.
“The recovery that we had in spring is exactly that – it’s a recovery. It’s not a boom.”
Mr Tarbey said Sydney’s recent solid performance was actually a correction.
“The Sydney marketplace fell backwards in the last cycle. Last cycle, the Sydney market didn’t move. We reached the point where even Brisbane’s median price got close to Sydney’s. If you look at them today - three years later - Brisbane is at $445,000 and Sydney is not far shy of $750,000. It’s a massive difference between the two," he said.
“It looks like Sydney’s prices have moved rapidly but that's only because of what you’re hearing in terms of auction results. They’ve [median house prices] only climbed eight per cent on average this year. I wouldn’t call that massive when you think about the fact they would climb; literally, real estate prices would double every seven to 10 years if you go back over the cycle. If you go back over the last seven years, or even 10 years, we’ve gone nowhere near that. So it’s a catch-up phase, it’s not a boom.
“The reality is that there is a significant number of buyers who have missed out on property and capital gains because they’ve paid attention to that sort of advice instead of looking at the numbers.”