Previously known as “The Property Planner, Buyer and Professor”
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Show Notes – Property Predictions that Missed the Mark!
This week, the Trio take a data-driven look at the property predictions that never quite came true.
From mortgage cliffs to phantom crashes, they revisit some of the biggest doomsday headlines of recent years and unpack what really happened in the market.
The Mortgage Cliff That Wasn’t
Remember the panic about borrowers “falling off a cliff” when fixed-rate loans expired?
The Trio revisit those 2023 headlines that warned of a 63% surge in repayments and a flood of defaults.
Instead of collapsing, home values rose nearly 9% throughout the year.
We revisit why the media and experts got it wrong.
We had pre-empted this earlier in episode #225 “Navigating the Fixed Rate Mortgage Cliff – Is It Real or Hype? Data Behind Headlines, Property Market Repercussions & Managing Risk” where we explained in advance why the so-called “mortgage cliff” would never eventuate.
The Crash That Never Came
In 2022, as the RBA began lifting interest rates, forecasts warned of a 20% plunge in home values.
Many feared the market was heading for a major correction.
In reality, prices fell just 8.4% before bouncing back within a year.
The Trio break down how strong migration, limited housing supply and tight listings helped turn a predicted collapse into a short-lived dip and why a rapid fall doesn’t always mean a deep one.
Distress vs Data
The Trio also tackle repossession myths and “negative equity” scares.
Bank repossessions rose 160%, but that figure jumped “from virtually nothing to slightly more than nothing.”
The message?
Look beyond the headlines. A 160% jump sounds dramatic, but the actual number of bank repossessions is tiny compared to the total number of properties on the market.
Far too small to move prices.
Australians tend to hold for the long run and will do almost anything to keep their property, especially their home.
When prices fall, most simply wait it out rather than crystallising a loss.
Loss aversion is a powerful motivator.
Banks, too, are far less eager to sell borrowers up than they once were.
The bad PR isn’t worth it and lenders are no longer as ruthless as they once were!
Myths, Models & Misreads
From 18-year-cycle theories to “foreign exodus” fears, the Trio show how simple narratives often ignore complex fundamentals.
Migration, under supply and employment continue to shape the market far more than any cosmic cycle or international buyer movement.
Property astrology might be fun at parties… but it’s useless for planning.
Key Takeaways
The Australian property market keeps bending, never breaking and that resilience is worth remembering the next time a headline screams catastrophe.
Gold Nuggets
Dave Johnston’s gold nugget: As Dave says, “Doom sells, but data wins.” Dave reflects on the elements that mitigate crisis in our property markets.
Mike Mortlock’s gold nugget: Mike wanted to share some resilience for people who can get scared by these types of headlines. “If you see a headline predicting a disaster, remember that Australia’s proeprty market is much more rubber ball, than crystal vase.”
Cate Bakos’s gold nugget: Cate reflects on the previous downturns we’ve had and she encourages listeners to check out the chart cited in the show notes.
Resources:
- Ep. 129 – What is contrarian investing and how can you make it work for you?
- Ep. 158 – How interest rate cycles have impacted the property market since 1990 when the RBA first started targeting the cash rate and some predictions on what will happen this time
- Ep. 225 – Navigating the Fixed Rate Mortgage Cliff – Is It Real or Hype? Data Behind Headlines, Property Market Repercussions & Managing Risk
- Ep. 292 – Property Trends to Watch in 2025 – What Every Investor and Homebuyer Needs to Know
- Ep. 316 – How Long Does It Take to Double Your Property’s Value? Busting the Myth & How Rates, Supply & Market Fragmentation Changed the Game
