For a while, it was easy to write off the property slowdown as a Melbourne and Sydney story. Specific markets with specific problems. Not a national trend.
That story is getting harder to tell.
Data out this week shows Perth and Brisbane are now joining the softening. Two markets that have been running hot for years are starting to follow the same trajectory that Victoria and New South Wales mapped out ahead of them. It’s not a crash. But it is a pattern.
What this does to how people feel
There’s a well-documented relationship between property values and consumer confidence. When people believe their home is worth more, they spend more freely. They feel wealthier, even if nothing has actually changed in their bank account.
The reverse is also true. When prices slide or stall, people pull back. Not necessarily because they’ve lost money on paper. Because the feeling of wealth has shifted. We’re starting to see that now. Petrol prices are up, cost of living remains a pressure point, and now the property wealth effect is running in reverse in more parts of the country than it was six months ago.
The most important question: do you have to sell?
A property expert put a clear framework to this recently. The expectation is prices stay soft or flat for roughly two years, then begin recovering. If that timeline holds, investors who can sit tight will be fine. The pain is reserved for those who can’t.
This is a principle worth internalising well before you find yourself in a position where it matters. Forced sellers don’t get to choose their timing. They sell into whatever market exists, at whatever price the market offers.
If you’re holding investment property right now, the question isn’t whether prices have come off. They have. The question is whether you need liquidity in the next two years, and whether your position can absorb that if prices don’t recover on schedule. If the answer to either of those is uncertain, it’s worth reviewing your plan now rather than when the pressure is on.
Victoria as the leading indicator
There’s also an interesting flip side to the Victorian story. Some interstate buyers are now looking at Melbourne and asking whether it’s become cheap enough to be a buying opportunity. Markets that have already corrected attract a different type of buyer than markets still at their peak.
Whether that view plays out over the next twelve months will be worth watching. For now, the direction of travel nationally is clear.