Exclusive analysis reveals the winners and losers from the 2017-2019 reversal – and the lessons for current markets.
Inner-city apartments were the most resilient real estate performers during the last major property downturn in 2017-2019 when banks tightened their lending controls to tame soaring prices driven by investors.
For example, Sydney’s upper quartile is down more than 4 per cent compared with a 0.5 per cent fall in lower quartile houses. The Blue Mountains, 60km west of Sydney, was one of the top 10 regions that recorded the smallest drop in values. This time a 200 basis point lift in interest rates could knock 15 per cent off the value of Australian property, according to the Reserve Bank of Australia. Other market analysts predict bigger falls. Yesterday’s increase of 50 basis points follows a 25 basis point rise in May and a 50 basis point increase in June.
For example, economists predicted the housing market would plunge by around 30 per cent at the outset of the COVID-19 pandemic when there were restrictions on auctions and house inspections.“Prices moved in the opposite direction and ended up increasing within two years,” says Conisbee. Some inner suburbs, including Essendon, about 12 kilometres north-west of Melbourne, “held reasonably firm in value”, its analysis shows.
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