Rob Di Vita, buyers advocate with National Property Buyers in Melbourne was out to dinner with some friends a few weeks ago. Being in real estate, the conversation eventually (or inevitably) turned to the housing market.

The immediate future of the market was widely speculated; one of Rob’s friends (for the purposes of this article, let’s call him Chris), who had sold recently and was looking to buy believed ardently that prices were going to drop. Not only that, but were going to drop significantly.

Chris’ plan was to take advantage of the anticipated drop in value and pick something up in the new year comfortably under current prices.

Rob’s response was simple: are you sure?

Chris was confident in his read of the market based on the available information and despite the ensuing conversation left diner still strong in his conviction that prices would drop.

However, gazing into the real estate crystal ball will only ever reveal at best a prediction of things to come. You can second guess the market, but do it at your own peril.

It is very interesting to look back at the commentary over the last 12 to 18 months and compare the predictions made to the events that transpired.

At the end of 2014 and the early days of 2015, there was an expectation that the boom of the previous two years was coming to an end. 2015 would be a year of slowing down.

Core Logic research director, Tim Lawless was quoted by ABC News Online in January of this year that the investor driven surge in Sydney and Melbourne over 2013-2014 would likely “moderate” over 2015.

Greg Jericho of The Guardian (view article) wrote in November 2014 that there was good news for those who were “worried that housing prices are growing too fast [as] the boom seems to have peaked.” Looking at the below data from June 2011 to September 2014, it would seem that could have been the case:


Domain Group wrote in May of 2014 that the “biggest property boom in a decade” in Sydney had come to a close, following the release of Australian Bureau of Statistics.

The stats from the ABS as reported by Domain showed that a 5.4% increase in prices in the December 2013 quarter had not continued and prices had dropped to 2.4% in the first quarter of 2015.

Domain Senior Economist Dr Andrew Wilson said that the figures were “the final nail in the coffin of Sydney’s property boom.”

Fast forward to today and the market will look back at 2015 having seen records smashed.

Contrary to predictions, Sydney didn’t slow down and blasted its way to a $1million median house price in the June quarter, having increased a massive 22.9% YoY.

Melbourne recorded a 10.3% increase in median house prices over the 2014-15 financial year.

Predictions made 12 months ago don’t seemed to have transpired.

There has been speculation that prices will begin to drop as of next March for two years before rising again. However, those who are waiting to take advantage of these forecasted drops may want to reconsider their strategy.

Buyers should remember that these predictions are still only predictions. 12 months ago, Sydney, and the larger property market was anticipated to slow. And then look what happened.

In fact, only this week has Domain Group reported that a survey by the New South Wales division of the Australian Property Institute has revealed that a significant number of property professionals expect the booms in Sydney and Melbourne to continue for at least another six months.

44% of the industry professionals surveyed (such as analysts, fund managers, and financiers) believed that Sydney would continue to move upward for another two quarters, while 33% believed growth would continue for another year.

Half of those surveyed also predicted prices would continue to rise in Melbourne for another six months.

These predictions fly in the face of the forecast from Macquarie Bank that prices will decline by 7.5% over the next two years.

If these speculations tell the market anything, it’s that the reality is often that the best time to buy property – good quality property – is yesterday.

The property market will continue to move upward in value over the long term. There isn’t necessarily a golden time to scoop up a property when the market dips.

Currently, buyers are presented with an opportunity to get into the market as price growth seems to be easing.

According to Core Logic RP Data, prices in Melbourne and Sydney have moved 0.6% and 0.3% over the month of October (3.1% and 1.5% over the quarter). The research firm also released their findings of a consumer sentiment survey last week.

The findings revealed that 68% of respondents believed that the housing market is “vulnerable to a significant correction in values.”

Sentiment in the market is certainly feeling that prices will correct in the coming year. However waiting to pick the right time to buy should come secondary to finding the right property to buy.

Attempting to time entry into the market or make the next purchase with the aim of getting good value is very difficult to do. Picking the right time to capitalize on an easing or sloping market to buy is a very challenging task even for property professionals, and will almost always involve a good stroke of luck. More often than not, the market will move beyond buyers if they wait too long for the ideal time.

Securing a good property that has a lot of admirable qualities and good capital growth potential should be the primary objective of every purchase. At the end of the day, it doesn’t matter what stage of the cycle buyers buy, quality is what counts.