The media gets it wrong more often than right
As mentioned in my last post, I just bought a house. And I'm pretty excited about it. It was a great purchase for a few reasons, and not only because I was able to purchase the home without having a deposit. But that's a story for another time.
What's really interesting at the moment is how the real estate market is currently being discussed by the media during this pandemic. The current situation with COVID-19 has caused the media to repeatedly claim that we're going to see a massive drop in real estate prices, some articles have even stated that we'd see a drop of up to 35% in house values.
This isn't at all the situation in my home town (Adelaide) here in Australia, and from what I understand isn't being experienced in many parts of the country. If anything, we've seen a massive drop in available properties on the market. And while fewer people are looking to buy properties, the competition is still fierce. What this has meant is that property values are not at all dropping. They aren't increasing in value in any significant way, but to claim that prices are falling is quite simply a blatant lie.
For example, the house that I am finalising a purchase of right now ended up selling at about $1,500 below its valuation. And virtually every house that I put a bid on sold for either at its valuation, or higher. The number of people attending home opens is insane so it is clear that there is continued demand for property, but the current climate also appears to be making people behave more cautiously. And this has led to a lower number of homes being placed on the market.
Could house prices fall in the future? Maybe... The government subsidies will come to and end at some point, and if the unemployment figures continue to grow during this time then there will most likely be more properties coming on to the market as a result of financial distress. But in Adelaide, Australia, we're not seeing the same level of impact on our economy as a result of this virus. We largely have the virus under control and, at the time of writing, there are no active cases in the state.
Thankfully, the media has very recently started reporting more realistic views of the property sector. So it's not all overly dramatic views on the sector being promoted.
But it would be nice if the media stopped promoting the poorly informed views of the supposed "experts" who make such pathetic claims as 35% price slumps and so on.
