Carrington Clarke

I mean, I think the fair thing to say is that the property market momentum had shifted well before even the leaks about capital gains tax and negative gearing started coming out in the lead up to the budget.

Basically, as soon as the Reserve Bank started talking about raising rates towards the end of last year and then actually did it in February, that was a hammer blow to the momentum, which until then, you know, second half of last year had been red hot in the property market.

I mean, the price gains were, you know,

again, almost out of this world and running well ahead of inflation and wages and all these things.

So in a sense, and Tim Lawless from Cotality, their senior analyst says this in the release about the data.

there was a sense that momentum had to run out because the gains were so strong.

But you factor in rate rises and now these tax changes that affect property, and it's no surprise that the market's really run out of puff.

Yeah.

And also, again, well ahead of incomes, well ahead of consumer price inflation, well ahead of rental increases, meaning that yet again, rental yields for Australian property have fallen even further and are incredibly low.

For any other asset class, you'd look at getting a 3% or less gross yield and professional investors would be running a mile, especially with the risk of potential price falls if there's the market correction.

So

As I said, it seems like a story if we had this big momentum, it's almost fallen under its own weight as it does from time to time.

The Australian property market is not immune from falls and particularly when you look at it in real terms rather than factoring in inflation.

So if you take inflation out.

And actually, if you go back all the way to May 2021, Cotality says Melbourne's prices are only 3.3 percent higher.

And then you go to the other extreme of the market,

Perth's prices over that period have almost doubled.

They're up 91 and a bit percent.

And Perth, again, over the past year, nearly 26% higher.

And even with the slowdown in the Perth market, still up 1.5% in a month.