Over the long weekend property analyst Tim Lawless was quoted in The Australian as moving his prediction of the fall in national property prices from 15% to 18% to 20%, peak to trough in 2020.
AMP chief economist Shane Oliver was reported as moving his prediction to a 25% drop across Sydney and Melbourne.
“CoreLogic’s data showed over the past 12 months, properties valued at $1.1 million or more recorded the largest price falls. These homes fell by 9.6 per cent for the year and 4.2 per cent for the quarter, while the second most expensive band of houses fell 6.5 per cent for the year and 2.8 per cent for the quarter”.
This will be the strongest correction in housing prices since 1983 and a significant challenge for retirement village marketers. The first significant housing crunch of the GFC stalled village sales from October 2007 through to mid-2011.
It will also create a challenge for residential aged care operators relying on RADs. What family will sell the family home if they think they will suffer a 25% haircut? Will rental income also be hit, which will challenge DAP payments?
The market will tell us swiftly.
