The chief executive of a Sydney-based real estate group says that skyrocketing property prices have given Australians a sense of entitlement about making money from their homes.
Starr Partners CEO Douglas Driscoll runs a real estate group with more than 30 offices across southern, western and northern Sydney. As CEO, he’s been observing what has been taking place on the ground among buyers and sellers.
While he is seeing a slowdown in the market in some areas, other areas are still doing extremely well and he believes reports of a crash are wide of the mark.
“There has been talk of the market slowing for some time now, but 4.4 per cent over 12 months isn’t much,” Mr Driscoll said.
“If I were being cynical, it’s not inconceivable that property prices might fall another 10 per cent. However, the ingredients just aren’t there for a market crash, in my opinion. Whether they’re buying or selling, owner-occupiers shouldn’t necessarily hold off. Fearmongering certainly doesn’t help and ultimately creates a wait-and-see mentality.”
The CEO believes that the current “fearmongering” is more about the potential lack of profits that property might deliver over the next few years.
“The exponential growth we’ve seen in some pockets of our market has conditioned us to think of property as a way to make money, even that we’re entitled to make money, rather than look at what it truly is: a home.”
In its Australia Insight: Australian Property Update, published on 6 June, ANZ noted that the continual fall in property prices across the country has lasted longer than it anticipated.
“CoreLogic’s housing price data show[s] that the aggregate housing market has continued to soften, with dwelling prices down [by] 0.3 [of a percentage point month-on-month] in seasonally adjusted terms in May.
“That is now nine of the past 10 months that have seen lower prices, and the decline has persisted longer than we originally anticipated.”