Over the new year’s break, I read an article on how Australian property values plunged by 4.8% over the past 12 months. Now we all know it’s the media’s job to create catchy headlines and write stories to fit their narrative. If it bleeds, it leads – simply because it sells. However, it did get me thinking, what percentage drop constitutes a plunge and more importantly, is it cause for alarm?

To find out, let’s ask the following questions:

Have you actually lost any money on your property? If you haven’t sold your property and you don’t have to sell, you haven’t lost anything! (even if your property has gone down in value in the last year)
If you do sell, will you be able to sell it for more than you bought it for? Obviously, there are selling expenses and holding costs associated with owning property so these need to be considered.
Has your property actually plunged 4.8% in 2018? This data is based on all the recorded sales across the country. The majority of the biggest declines in value were recorded for properties in Sydney. It is quite possible your property has increased in value in 2018.
Do you actually know the value of your property? If not, I can arrange to get you an estimated valuation of your property’s current value.

Now, let’s actually assume that every property across Australia has actually gone down in value, what is the good news?

If you are looking to buy, you are going to get a bargain!
If you are looking to upgrade to a more expensive home you are in luck. Eg if your current home was worth $400,000 (your home has lost about $20,000) and you want to buy a home worth $800,000 (this has lost about $40,000) so your changeover cost has gone down by about $20,000
If there are less people buying and selling, there are less people getting new mortgages which mean less money for the banks. To make up for this lack of new business they will often try to poach their competitor’s customers by offering very attractive rates to refinancing customers. Have you had your home loan rate checked in the past 12 months?

As with all things in our ever changing real estate market, it’s not what you know, it’s the actions you take with what you know that makes all the difference.

Have a great 2019, I hope your actions get you the results you are after this year!

Michael