With the Sydney market starting to slow, media outlets are reporting dramatically with very little fact or data included in their stories. The Sydney market is doing what property markets are supposed to do. It is correcting itself. Correction of a property market always follows growth and is perfectly normal.
Last week 60 Minutes ran a story on Australia’s housing crisis, stating that several experts they interviewed estimated house prices would drop as much as 40 per cent in Melbourne and Sydney in the next three years. One of those experts, Martin North of Digital Finance Analytics, has spoken out stating that 60 Minutes took the worst case of the four scenarios he presented and used it as the basis of their story. “It [forty per cent drop in prices] was not my central scenario, it rated only as a 20 per cent chance as I made it clear when I interviewed”, he said noting that his caveat did not make the final cut in the story. Martin said the figures used in the program did not reflect his “central scenario” and Channel 9 “chose not to cover” the more likely alternatives. “My best call would be that property values fall in the region of 15-20 per cent from top, over two to three years” Martin says.
It is also important to note that delinquent loans are very stable and low. This is something that 60 Minutes also failed to report in their sensationalist journalism.