Look what I just read on news.com.au

Home prices on the verge of collapse
By Nicolette Casella
May 4, 2004

THE worth of Sydney homes has fallen for the first time since September 2000.

The median value of houses dropped by 0.5 per cent in the first three months of this year, while units lost 0.6 per cent, according to preliminary figures from property market research firm Residex.

The worth of houses in some suburbs near the CBD has slumped by as much as 10 per cent.

The middle and top echelons of the market suffered the greatest losses, although almost all sections failed to continue the strong capital growth they have enjoyed in recent years.

Last year’s two consecutive interest rate rises, the Carr Government’s property tax changes and record low housing affordability were blamed for the downturn, which some property experts believe could signal the start of a market crash — especially if interest rates were to rise again soon.

But Residex managing director John Edwards said the market was already at its lowest ebb and would start to pick up as a new housing cycle began.

He said before the heady price rises of the past year, negative growth was not uncommon. He advised homebuyers to take advantage, especially in areas like Kensington, Canterbury and Mascot, where big losses had been recorded.

“Across the city you are now more likely to find prices

falling rather than rising,” Mr Edwards said.

“For people who don’t have a housing investment, now is the time for the bargains. These sort of openings offer fantastic opportunities to negotiate a good deal.”

He warned homeowners and vendors not to panic.

“Property investment is for the long term not the short term,” he said, adding that the market would pick up in the next year or so.

Australian Property Monitors head of research Louis Christopher was not nearly as confident. He said the market was on the verge of crashing.

“We are absolutely sure the market is at the slowest it has been since the last property crash during the late 1980s-

early 1990s recession,” Mr Christopher said.

“We think the probability of a property crash has increased from about 20 per cent before the tax changes to 50 per cent now. Things could get very scary if we continue to see an auction clearance rate at below 40 per cent.”

The Daily Telegraph

“Looking forward to the day when I can tell the boss where to go”