If house prices are falling as rapidly as some headlines impute, can we expect this to impact AREIT investors?
Let’s begin by looking at the facts, rather than the headlines.
Housing demand and supply ebbs and flows. Because of the lower barriers to entry there’s often volatility in residential housing. We’ve experienced a five year bull run in residential housing which has seen average Sydney house prices rise more than 75% to the middle of 2017. Melbourne was not far behind, growing more than 55% over the same period. It’s not surprising that after a sustained period of extremely strong housing growth, we’re now starting to see a price correction.This is part of a normal cycle.