Will this property price downturn be different to the last?

In previous property booms, house prices on average rose 32.7 per cent and the upswing on average lasted on average 33 months.

In previous downswings, house prices on average declined 3per cent and the falls on average lasted nine months.During the early 2000s, the boom lasted 42 months and prices soared 76.4 per cent. While it was unlikely the median house price across the combined capitals would return to pre-pandemic levels, which would mean a 25 per cent decline, Powell said the current downswing could be steeper than the last one in 2017-19, when prices fell by 7.9 per cent.

“Over the last 30 years rates have come down, each time they went to a new low – that enabled people to gear up, propelling prices to a new high. It also meant that any downswing was relatively brief. That started to change in the 2017-19 downswing,” Oliver said. At record property prices and levels of debt, Oliver said it was unlikely for property prices to record upswings of previous magnitudes achieved thanks to rock bottom rates.

“This downturn we’re expecting will be the largest and deepest downturn since the early ’80s,” McMenamin said.He said there had been a structural decline in interest rates over a long period of time, but that trend has now ended, meaning the same magnitude of property price increases is now unlikely.

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