Sydney
Jun-2009 $490,000
Jun-2010 $610,000 up 24%

Melbourne
Jun-2009 $401,200
Jun-2010 $500,500 up 25%

Brisbane
Jun-2009 $420,000
Jun-2010 $465,000 up 11%

Adelaide
Jun-2009 $363,000
Jun-2010 $410,000 up 13%

Perth
Jun-2009 $455,000
Jun-2010 $510,000 up 12%

Hobart
Jun-2009 $310,000
Jun-2010 $349,800 up 13%

Darwin
Jun-2009 $465,000
Jun-2010 $530,000 up 14%

Canberra
Jun-2009 $460,000
Jun-2010 $545,600 up 19%

1995: The average house was probably 3 bedroom, 1 bathroom and 1 garage.

2010: How big is the average house now? 4 bed, 2 bathrooms, 2 garages ? and should we REALLY expect it to stay at the same price as a smaller house ?

When we start building more smaller houses again, maybe then the prices will look better.

I’ve actually never met anyone who was in utter denial about the housing market. Most are realistic, but some have been saying it will drop 40%-50% next year since 2004, and we are still waiting for those promised drops in 2005, 2006, 2007…

There are plenty who have seen and acknowledge how the Sydney property market died after 2003 and never really recovered, but others who are in utter denial that it did actually die.

It is very confusing.

Figures from the Australian Bureau of Statistics show these annual percentage changes for each year, for the movement in Established House prices in Sydney:

Year	Sydney	Australia
1995	1.3%	11.5%
1996	1.5%	1.2%
1997	5.2%	4.3%
1998	7.8%	6.7%
1999	9.5%	7.8%
2000	11.3%	7.5%
2001	10.4%	14.0%
2002	21.0%	17.3%
2003	16.5%	17.6%
2004	5.4%	8.2%
2005	-4.7%	1.0%
2006	1.4%	9.5%
2007	5.2%	10.6%
2008	-0.4%	2.8%
2009	5.9%	6.2%
2010	11.0%	11.5%

Australian House Price Crash

“One year ago there was utter denial the housing market was in trouble at all. Now the realization is starting to dawn on some smarter thinkers that something incredibly serious is underway, but as usual their belief (faith?) is that they can manage the fabled short lived ‘soft landing’. Well good luck with that is all I’ll say. The larger the boom, the larger the crash. The real estate boom that started in the late nineties began long and slow and over its course turned into the greatest housing bubble the world has ever seen. This bust that’s unfolding will be exactly the same. Hold on to your hats real estate speculators. As the year unfolds you’ll come to realize real estate in this country is dead for a generation or more. This bust will be a doozy.”

It will be fun to watch the market when the interest rates go back to 9.6% as they were in 2008.

But, what if they don’t, what if people just carry on as normal, buying what they can afford, and not panicking ?

Have house prices REALLY, as you say, “snowballed into the biggest property bubble the planet has ever experienced” ?

Look at the Sydney prices above, an increase of just under 10% over a total of 4 years. That is an average of 2.36% per year, that is even less than the average wages have risen.

However, people who rely on “boom and bust” for entertainment, tend to use more exaggerated figures, rather than averages, and will look at say Sydney City prices, and similar expensive areas, where no one disagrees that prices have sky-rocketed. But out in the suburbs, where most normally financed people live, there has actually been little price movement.

Some areas do show massive increases, especially when these new estates are being built, which push up the median prices, as they now include 5 bed, 3 bathroom houses instead of the older 3 bed, 1 bath houses.

Obviously this will change median prices, but it doesn’t mean that actual house prices have changed, it just means that more people are choosing to buy the more expensive properties.

I’ve been listening to these boom and bust spruikers since 2005, and the message has always been the same. The property crash is upon us.

Unfortunately, this has become the same as those few people who walk around with placards saying “The End of the World is upon us”

One day it will happen, one day they will be right, but for 5 years now they have been wrong.

Who knows what will really happen ?
I sure don’t, but I have somewhere to live, that I can say I own, and if wages stay the same it doesn’t matter what the median price of any area really is.

Dank.