Keens prediction spanned a 10 year period, he may still be correct, hope not though.
Not just high end properties have dropped, most properties in whole regions have dropped 20-30% e.g Gold Coast, Sunshine Coast, Northern NSW already that I know of. Brisbane, Melbourne, Tasmania look like they are following.
if we go back to statistical reality, and take the median of the national market in terms of value, i expect the numbers on average would be less than 10 % at a max in any period of time.
Some segments have come back 50 %, some have put on 20 %+.
Just because a 15 million dollar Pre gfc house on Sovereign Is sold for 8mill doesnt mean that the median house price in Sydney is now down to 356k from 668k.
Just a point of note, using Residex stats
2012 year, sydney median up 5 %, Melb up 1.5, Perth 2.6 ( and moving fast this quarter), and even post flood Brissie didnt go backwards.
These are pretty sad numbers if you are a CG investor looking for the 7% average over a couple of cycles, but they are reasonable evidence that a 40% dump isnt just around the corner.
Assume a 40 Correction in the median price of units in sydney for a moment.
the rental yield would go from 5.15 to 8.6 %.
Entirely possible if there was zero money to be able to borrowed, but in a moderate credit environment, any big dump in prices will probably be underpinned by humans doing the numbers and working out that a 2 year fixed mortgage at 5 % is a bunch lower cost than 8.6.
Are we in for a rough ride..........yes, I think the economy is more broken and segmented than is being revealed, but while there is some powder in the RBA's monetary policy bag we will be well sheltered.
If that bag runs out, and the general economy hasnt moved on, then we may have some issues,but still not 40 % below median levels when those ambit claims were made
Anways, I will now go back into my 12 ft tinnie, rather than the 100ft boat in the bahamas that one would have if their economic crystal ball was really spot on.......................
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