WHEN writing a regular “opinion piece”, on occasions the subject can become exciting.
This week’s offering may well create credibility issues as I’m commenting on figures released in relation to real estate sales last quarter said to be in a price slump involving sales in 938 suburbs.
Clearly, I’m not an expert in this area but I do own my own home and have owned professional chambers on main street frontage for many years.
What I do know is that figures can be misleading when you don’t know if it is the worst home on the best street whose value has been realised due to its sale or if it’s the best home in an average street that we are comparing it to.
The PropTrack data said, in the beach side suburb of Bronte, some $1.93 million has been wiped off the area’s overall median value, a fall of 30.7 percent in the past three months involving the sale of some 30 homes.
Apartments in the Waverley suburb fell by 36.5 percent in the same period abd the better than average suburb of Blakehurst saw its values decline by a similar 36 percent.
In Newcastle sale values fell by 27.7 percent with similar strong falls in Queensland, Western Australia, Victoria and even in regional NSW.
For some period of time, my view has been that housing values in our economy have been over the top when compared to household incomes minus taxation and the cost-of-living.
When incomes can’t keep up with expenditure, debt accumulates and the economy of nations rapidly deteriorates.
In this way we all lose asset value.
Even the society suburbs of Kirribilli in NSW and Toorak in Victoria have suffered falls in the area of 30 percent, showing that even the top end of town is now experiencing economic pain due to asset revaluation.
With real estate values peaking, the price of gold now at eye watering levels, the equities market never looking more expensive, and interest rates falling as business borrowers hold off on more expenditure and investment, it is indeed a time to reflect, rethink your position and decide to live within the budget you can handle.
By John BLACKBOURN
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