On Monday 1st April 2019 (yes, on 1st of April, but this is not a joke J), CoreLogic published data shows Melbourne
- dwelling value dropped by 0.8% in March,
- with house values down by 1.1%,
- over past 12 months, fell by 12.4%.
There were some signs that the price declining was slowing down, though is expanding to the other areas of Australia.
On 2nd April 2019, the first Tuesday of the month, Reserve Bank Australia (RBA) decided to keep interest rate as 1.5% for 29th consecutive months. As economy keeps losing momentum, the possibility of further two rounds of interest cuts is now in people’s discussion.
Now let’s go back further, to the end of March, when we had a meeting with a real estate veteran who has been in industry for more than 35 years. He showed me a picture of Melbourne Long Market Trends, which I felt interested, added some lines onto it and attached below.
If just for a few seconds, let’s focus on the graph itself,
- Line 1 – the price will test the middle line and bounce back in mid of 2019. But given this middle line has been broken twice before, the support will be weak.
- Line 2 & 3 – the price will penetrate the middle line, continue falling and test the bottom line. The bottom line will provide a strong support. After testing the bottom line,
- Line 2 – we may see a strong rebound by the end of 2019 or early 2020; or
- Line 3 – a mild correction from the end of 2019 and may through the whole 2020. Given current economic conditions, I will see Line 3 with more possibilities.
Market is market, it is dynamic, conditions can change, anything can happen.
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