Reports that Australia is in the midst of a property boom which is set to crash are inaccurate and misleading, according to the CEO of a leading real estate group.
Charles Tarbey, owner and managing director of CENTURY 21 Australasia, said recent reports by commentators such as Harry Dent that Australian property prices are likely to crash are simply hyperbolic versions of what “the rest of us just call a cycle”.
“We’re hearing about the bubble again, caused by China. This is Harry Dent’s fourth year in a row that he’s predicted a bubble. He will get it right one day, and that’s when he will claim the prize, but what he’s referring to is what the rest of us just call ‘a cycle’ – when things get a little overheated,” he said.
Despite recent hype and heat in the market, Mr Tarbey said the Australian market is not set to burst because it’s not even booming yet.
“You have to remember that traditionally boom markets are when clearance rates nationally are in the 80s,” he said. “Clearance rates have not been in the 80s nationally except for one week over the past three-plus years. One week.
“Last week Sydney and Canberra were 84.2 and 82.2 respectively, but the average was 76.2 across the country. So we’re certainly not in a boom market.”
Mr Tarbey said a true sign a national property market is beginning to boom is when the “discretionary spending areas start to move”.
“You can still buy some incredibly magnificent coastal properties at prices well below what they were three or four years ago, before the crash. So until that market picks up I would not even consider calling it a boom," he said.
“That’s where you should be watching. If you start to see that economy moving, in holiday homes and so on, you’ll start to see a move across the entire market. But when you’ve got holiday areas that are only just starting to get interest, you are nowhere near a boom.”
To see Smart Property Investment's interview with Harry Dent about why he believes Australian property prices are set to plummet, click here.